And so what?

+2 JackRabiit always pays his loans back, no problems at all

JackRabbit paid the loan + interest with no problems at all.

A trustworthy person who kept his end of the deal without issue, I wouldn't hesitate to loan again.

Thanks JackRabbit

Received your PM, coins should be on their way to your acct.

I'll loan you 5 bit coins for 6.

Just give send me the address to send to.

Safely store you bitcoin wallet on Cloud Pixies servers.

Unlimited access (up or down) with 1GiB of storage space, big enough for your bitcoin wallet and a few other files as well.

RAIDz3 SAN used with ZFS nightly snapshots for at least a week worth of history. Cluster based backup servers are used, wholly owned and run by Cloud Pixies Ltd. a UK based registered business.

Access via Windows network share or NFS

0.1BTC per month (~2$ at the moment)

Other options including encryption and setups are available if required.

To buy email me at deano@cloudpixies.com

Depending on expense, i'd look at adding a small XMOS processor to the board. It being transputer in essence was designed to talk other chips like ASICs and other XMOS. The ASIC is left doing its special magic, the XMOS handles everything else (including block submits etc.) and can be easily connected up into massive rigs as required.

As stated earlier, I'm seriously thinking and exploring the idea... As a business man, however the first thing is to have a concrete business plan.

As such that is what I'm doing with now, trying to balance the potential books, how much investment, how to generate profits, share-holders or not?, advantage to users, etc.

Ironically given the current state of main economy banks, banking is all about trust... And that is a hard thing to get, for a bank to succeed, at the beginning it has to inspire confidence that it can keep you money safe and knows how to grew it (for interest and share-holders).

One possibility I've considered is to follow the model of the co-operative banks (AKA building societies) in the UK. On these there are no share-holders or owners except the customers. Your deposit with the bank, entitles you to a dividend each years based on the profits made.

Anybody have an ideas of the VAT situation in UK/EU of BTC to GBP and vice versa?

I will ask the company's tax advisor if I went into it, but just wondering what the view of others are before, as I expect he will look blankly at me for a while...

My gut feeling is that exchanging GBP for BTP is selling (you give me money and I give you BTC codes), so VAT should be paid with VAT receipt. Buying BTC of UK/EU businesses would mean that have to charge VAT and provide a VAT receipt.

Any thoughts?

My first tentative steps into accepting bitcoins as a business...

Hosted on Cloud Pixies backup servers. Cloud Pixies are a UK registered business with happy customers all over the world, lots of space and bandwidth available.

I'm offering 15GB of RAIDz3 protected cloud space (highest available drive protection, can survive three simultaneous drive failures) for 1 BTC a month. Discounts for 6 or 12 months in advance (1 or 2 months free respectively). Other size requirements are also available, ask and I'll work something up.

Very useful to store you BTC wallets or other important data.

You can access your backups with SFTP/SCP (encrypted FTP) or SMB/CIF (aka windows shares) or NFS (unix network mounts).

As I'm not sure of the interest, i haven't set up a web page. But you can see the services (not in bitcoins) at http://cloudpixies.com/backup

If you are interested in paying via BTC, PM me or email deano [AT] cloudpixies.com and mention bitcoins.

Hope its of interest to somebody!

Thanks,
Deano

Okay Bank lending is one aspect of a Bank, which seems doable with some caveats about size of loan and trust but not the only one. The other two personal banking areas are saving and current accounts.

So what does that mean in a Bitcoin bank?

A saving account traditional holds your money in trust returning you an interest rate bonus for doing so. The interest is generated via the bank being able to use your held money for loans, investments etc. The problems are saving guarantees, currently most countries guarantee consumer savings up to some value even if the bank fails, that of course can't happen for bitcoins, so do would we need a guarantee? and if so how would it be achieved?

My approach would be that saver specifies how much of their savings can be used for interest, from this the amount of interest s generated but also is potential lose if Bank closes.
So I save 10BTC and decide to allow 5BTC to be used for a guaranteed interest rate return of 1% per month. So assuming no component interest (could be the savers choice, which pool interest goes into), I earn 0.5BTC interest per month.
A Bank may set a minimum amount to disallow free savers (0 used for interest), on the other hand it might just let it happen (free saving account) as a goodwill / PR thing. I'd also suggest that a 0% interest saver account is really a wallet backup account and may be clearly to call it a backup account rather than savers to show it earns nothing.

A current account, the most used part of a current account is paying bills.

For a BTC current account i'd suggest

Instant transfer internal to the bank and to other banks with a data transfer agreement (A Bank could fast track bitcoin transaction time because it knows both ends, if they are both customers)

Traditional bank to bitcoin bank transfers - probably local country only but transferring money from Cash Bank to and from bitcoin
bank would be safe and cheap for the Banker.

Statements and tracking - allowing you safely see what you have, where you spent it

Secure - you wallet and bitcoins safely stored and protected from local effects

Overdraft - A bank may choose to allow a customer so head room, a predefined loan space...

Fee - A fixed monthly charge would seem to be the simplest and fairest system. The customer pays a small fee per month for the current account to be maintained.

Would anybody find such a thing actually useful?

The first two are secured loans, and require some way of securing which usually is by default local. I can't in country A secure credit in country B using my house/car etc. because they can't get it, if I default (easily).

Secured loans just affect the risk ratio, an easy "takeble" item so lowering the rate you pay interest as collateral.

But take most unsecure loans or a credit card, in those cases essentially they have 3 outcomes
1) You pay
2) You default and they call ballifs to take goods upto the value
3) They wipe it out as bad debt, and make sure you can never get credit again.

3 is for many people what happens, the real reason you want to keep paying your credit bills is so you CAN get credit in future.

As soon as the first bitcoin bank is setup I fully expect a bad debt protocol will come with it, perhaps even a name and shame system (public bad debt record as used in England in the last few centuries).

My thoughts in being a banker, is that I'd accept bad debt will happen sometimes, its part of the business and that risk will be calculated in the interest rates people would pay. Want cheaper interests rates, prove to me your less of a risk (complete loans etc.)

Each bank will have its own risk assessment... reputation, a current account and other details are likely to be the minimum for a loan.

Its no different from the current banking/loan system, Can you prove you are working? Do you have a bad credit history? Have you lived at your current location for several years? Can you show ID?

No loan is going to be given anonymously, as a standard business I can profile a customer quite well based on digital information. As banks grow this profile will likely get better as well.

I'd also expect credit rating agency to appear to track bad credit just as they do now.

Some loans will go bad of course, but that risk factor goes into everybody loans interests rates.

I see this as part of the risk assessment, this is the closest we can probably get at the moment to a security. If U are willing to put some of you money upfront as a security its clearly reduces the risk, its possible to think of other securities but the lack of physical accountability obvious cuts any many of the more traditional ones.

Another way to lower risk would be to have a current account which demonstrates a good constant flow of bitcoins.

Deposit security box is the first thing a bank would do imho, partly to establish trust and confidence in the bank (obviously being a registered business is required but until we have outside auditors of the banks, they have to earn their trust with potential customers.

I do think loans are viable just different from conventional banks. Much closer to the old traditional loan system,

I as the banker have N deposits of bitcoins (my load reserve)
U wants of loan of M bitcoins (M <= N)
U have to provide I with reason to I to loan you the cash, currently that would likely by the existing otp trust system.
If I think your trust worthy I calculate a interest rate on that risk, I loan you that money and you pay a portion of the loan + interest each month.
U default, I did my risk calculation wrong and take the lose.
U are a good customer, U get the loan, I earn interest and your risk ratio (and therefore interest) get better.

Indeed which is why I suggested underneath an agreed fixed amount of saving for investment perhaps as a system to allow interest. Or prehaps not paying interest, instead taking a small fee monthly for the service of keeping it safe, quick access etc.

Finding a banking method that works both for the consumer and the bank is tricky which is why I'm asking what others think.

I'm considering it (I have a registered business already in the process of accepting bitcoins), however for me any bitcoin bank should honour a charter/code thats in line with the bitcoin ethos. Apart from writing the software, this imho is the first thing that needs defining before going into the bitcoin business.

Currently my proposed banking charter would be

• 100% loan backing : Every loan of 1BTC is backed by a reserve of 1 BTC
• Transparency : Real time view of the banks reserves, so as to prove viability
• Saving separate from Loan/investment : Any savings/investment are in a separate reserve which is protected and paid back in case of collapse (no risk to savers)
• Minimum digital protection guarantee : Numbers of copies stored, encryption levels, access rights, etc.
  

However these conditions will make it much less profitable to be a bank than traditional bank, whilst many may see that as an issue it also means its less a 'gold mine' opportunity so likely to develop fast.

Profits on loans are simple and easy, either traditional interest or another scheme fitting those who cannot pay interest (certain religions)
Savers will expect interest BUT a 100% no touch policy would mean no way to generate interest. I'd suggest an agreed use percentage and a interest level based on that. i.e. a saver agrees to allow 20% to be used by the bank and in return gets a 1% interest return on the entire savings... (number plucked out of the air for example only).
For those who just want to use banking current account facilities, perhaps a small monthly fee to covers running costs?
Bank would also be an ideal place to run community investment and loan systems : Peer to peer with the bank offering certain guarantees and escrow services...

Just my ideas so far, would like to hear what others think and what they would want of a bitcoin bank...