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1  Bitcoin / Bitcoin Discussion / Re: Do you agree with idea "Bitcoin bank" ? on: February 06, 2017, 05:27:22 AM
Recently, i often see discussion about Bitcoin Bank. More and more people come here and ask about bitcoin bank & surprisingly i see few user agree with this idea.
So, i would like to find out the percentage of user who agreed with this idea.

Honestly, i think this idea is stupid and worst idea that i've seen in my life. What do you think?
p.s. we don't talk about bitcoin debit card OR any centralized service which only ask name and email address.


I can't  figure out the output of having a bitcoin bank.Is it similar from the fiat currency system?  I just wonder if how really it works. 

Banks make loans. They are very good at transforming an ability to generate money over time (a job) into a loan (a mortgage to buy a home).
They have capital and they take risks. That's what they do.

There is no market for this service in bitcoin because no one in his right mind will take out a loan in bitcoin. Bitcoin appreciates too much.

So, no. No bitcoin banks any time soon.
2  Bitcoin / Bitcoin Discussion / Re: Do you agree with idea "Bitcoin bank" ? on: January 09, 2017, 09:07:34 PM
I keep seeing people say things like "I don't understand why you would put your bitcoin in a bank". I think you are misunderstanding what a bank can do for people.

Most people HAVE NO BITCOIN.  Most people do have collateral. A bank is able to judge the credit worthiness of people with collateral and loan them bitcoin. It would be a way to buy a house and have a mortgage denominated in bitcoin.

The value of banks is this ability to judge credit worthiness and give people who have no bitcoin access to bitcoin. The banks are willing to assume the risk. They are willing to pay interest to people who trust them and deposit bitcoin in banks

Obviously, you failed to account for something

Something which will render the whole idea of lending bitcoins unrealistic as of now. And it is not Bitcoin depreciation like what you mean with fiat that will make this idea fail. It is the exact opposite of that. I mean possible Bitcoin appreciation. i.e. its price rising. Let's assume a bank offers Bitcoin deposits at 1% and loans bitcoins at 5% interest rates annually. Now it takes collateral at, say, 120% dollar worth of the current Bitcoin price. Someone takes a loan from the bank and provides real collateral (let it be his house). Then Bitcoin price surges a few times within a year, and the borrower happily defaults on his loan buying a better house instead of his collateralized one and still having some bitcoins left in his pockets. But the bank can sell the house only for a part of the bitcoins it loaned out while it still has to pay interest on Bitcoin deposits it attracted, right? And from where will it get the bitcoins outstanding?

Actually, I completely agree with you. I can't see anyone borrowing in bitcoins any time soon, so the whole point of bitcoin banks is moot.

Still, I think the common sentiment should be 'we wish there were bitcoin banks that make loans to any trustworthy person who needs bitcoin' and of course carry the risk.

By the way, the technical side in a volatile market from the bank's point of view is clear. In case of default, the bank would repossess the collateral and sell it for bitcoin, of course. And just like the current system with home values that go up or down, banks would require the owner to hold plenty of equity in his collateral.

Banks could make a business of this. But, as you said, no one in his right mind would take on a bitcoin loan if his salary is in fiat and bitcoin is on a rising curve.

No banks here.  Nothing to see.  Move along please.
3  Bitcoin / Bitcoin Discussion / Re: Do you agree with idea "Bitcoin bank" ? on: January 09, 2017, 05:46:58 AM
I keep seeing people say things like "I don't understand why you would put your bitcoin in a bank". I think you are misunderstanding what a bank can do for people.

Most people HAVE NO BITCOIN.  Most people do have collateral. A bank is able to judge the credit worthiness of people with collateral and loan them bitcoin. It would be a way to buy a house and have a mortgage denominated in bitcoin.

The value of banks is this ability to judge credit worthiness and give people who have no bitcoin access to bitcoin. The banks are willing to assume the risk. They are willing to pay interest to people who trust them and deposit bitcoin in banks.

Now banks are risky, but that is balanced by enormous value. Consider the biggest risk with banks based on fiat. It is that the central bank will print enough hard currency to debase your money. This can't happen with bitcoin.  Each bitcoin bank has to manage its own risks without the expectation of a bailout from the central bank. I bet bitcoin banks will be much more conservative and trustworthy than fiat banks.

I would think the bitcoin community would welcome banks. They would enormously increase the worldwide use of bitcoin and bitcoin value would rise accordingly.
4  Bitcoin / Bitcoin Discussion / Re: Can Bitcoin make Banks disappear? on: December 29, 2016, 07:28:19 AM
I strongly disagree with what the expert says. We still need bank because business borrow money from them as well as ordinary people to purchase their home or even a car. Bitcoin would only be a type of currency that we use to buy.

I completely agree. Everyone seems to forget that the most important thing a bank does is convert one valuable thing, an ability to generate income over time (ex. a company with good products or a man with a good job), into another valuable thing, money, by giving them loans (new money with fractional reserve banking).

Bitcoin alone cannot do this. We need banks to judge the credibility of the business or the men that want this new money.

By the way, banks can do this with Bitcoin using fractional reserve banking as well. We'd get checking accounts denominated in Bitcoin. This is exactly the same as a Spanish bank in Spain allowing you to open a checking account denominated in dollars. With many such accounts, they would only keep a fraction of their liability in dollars. Fractional reserve banking again.
5  Bitcoin / Bitcoin Discussion / Re: Can Bitcoin make Banks disappear? on: December 21, 2016, 11:37:41 PM
I don't believe the banks can be completely wiped out in a moment but I foresee the banks rather investing in bitcoins and gradually replacing them (their fiat) with bitcoins in the future.

They don't need to invest much in Bitcoin. They issue loans nominally in Bitcoin and hand out checkbooks. They don't have to hold the full amount of the checking accounts in Bitcoins, just a fractional reserve.  And their loans get paid back in real Bitcoins.

Pretty soon they have a lot of Bitcoins.
6  Bitcoin / Bitcoin Discussion / Re: Can Bitcoin make Banks disappear? on: December 13, 2016, 07:32:35 PM
Bitcoin will never make banks disappear. That is impossible. There are only 21 million of bitcoins in the future. That is the maximum amount possible if i am correctly informeted. So if everyone in the world should be paying with bitcoins, we should all have very very very small amounts of bitcoin. That is impossible. I Believe in bitcoin as another value with which you will be able to pay all over the world, as you do with doller, yen, pound, euro or so. All the values will have there own life as now, and nothing is going to disappear.
While I agree that bitcoin is not going to make banks disappear I don't see how the 21 million limit of coins is any problem, does that means the users are going to have very small number of coins? Yes, but bitcoin can be fractioned very easily, after all, it was not long ago someone bought a pizza with tens of thousands of bitcoins.

21 million btc can be broken down into mbtc or satoshi. And if there is a need, it can even be further broken down to meet the rising demand.

Trouble is, as of now, too few people hold most Bitcoin. To have Bitcoin increase in value to the point where it can be broken down sufficiently to be used by most of humanity, we would be giving these few initial holders of Bitcoin most of the wealth of the planet.

Just won't happen.
7  Economy / Service Announcements / Re: [ANN] bitaddress.org Safe JavaScript Bitcoin address/private key on: November 21, 2016, 12:18:17 AM
I got a quick question. Doing cold storage for the first time and wondering if I generate a private key will I have issues such as this individual

https://github.com/keepkey/multibit/issues/661

He apparently created some wallet and sent BTC to it but was never able to actually spend it due to some bug.



Whatever method you use, you need to practice with tiny amounts of bitcoin until you are satisfied you have a good system. Only then create a new wallet and move your other coins into it.
8  Alternate cryptocurrencies / Altcoin Discussion / Re: "Peerless Monetary Framework" as competitor to Bitcoin? on: November 20, 2016, 03:18:44 AM
"By encapsulating ownership, Peerless dispenses with all such third-party registries. This is a huge advantage to Peerless, anticipated to some degree by Bitcoin and the blockchain technology, but with the promise here of being carried to fruition. Peerless removes the need to rely on third parties because the individual can handle the task of reassigning ownership directly without their help."

You dispense with third party registries but you do not show how an individual is kept from double spending.  Since things can be anonymous (good thing), there is no way to even know if a double spend occurred (very bad thing).
9  Bitcoin / Bitcoin Discussion / Re: Is your bitcoin safe in cold wallet? on: December 14, 2015, 06:40:17 PM
Do you think your bitcoin in cold wallet is protected by law of mathematics and also the most powerful computer network in the world? Think again

The recent proposal by Pieter Wuille revealed that core devs can push in a soft fork change that pretty much changes every way bitcoin works, thus hackers can spend your money without your consent

How is that possible? Because bitcoin is essentially an agreement (protocol) among nodes, if majority of the nodes around you agree that your bitcoin is gone, then it is gone! It does not matter how strong ECDSA is, all it takes is a group of nodes around you changed their rules (or so called sybil attack)

Somebody might wonder: Aren't miners suppose to be the honest nodes and stop all this? Unfortunately, in this case, miners or so called most powerful computer network in the world can not do anything about it

Why? Because everything in bitcoin is decided by its agreement among nodes. If the nodes changed their way of calculate blocks, then all the miners will be dropped from the new network, and all those ASICs in large mining farms will just become paperweight

This becomes a real threat when mining has become too centralized, e.g. only a few large pools are doing mining. So, even they are running the original version of bitcoin, if large group of nodes have upgraded to a different version, these miners will just be ignored as minority (new version can easily change the way that miner works). Of course without hash power the new version will worth nothing later on, but I guess the thieves only need to sell their stolen coins before others realize the problem

The critical point that have real financial impact are exchanges and web wallet services. If one of these nodes together with a group of malicious nodes changed their protocol, then they could easily take others' coin, sell on exchange and profit. If you are really paranoid and assume that every exchange might be a potential malicious actor like MTGOX, then they have many ways to profit unethically through a protocol change



As opposed to what?  A single bank deciding you shouldn't have access to your account with them for some crazy reason and freezing you out?

Bitcoin is much more secure than that. The vulnerability you describe is just the probability that all the major players in bitcoin accept a software version that blows up their wealth. Not likely.
10  Economy / Economics / Re: Look at inflation and stop talking taper on: May 19, 2015, 09:49:06 PM

In the end, the problem is that people don't, actually, need more money.  There doesn't seem to be sufficient demand for money, even cheap money, so as to print enough of it to cause inflation.  We come to a point where assets are preferred over money.  QE tries to seduce asset possessors to give them a nice bonus to trade it for (inflating) money.  


You got this wrong. There is too much demand for money, i.e. keeping cash reserves, not too little. The central bank is successfully selling the money (Buying assets) but the recipients are just keeping the cash, not spending it.

Maybe you meant people don't, actually, need more debt. They are not going to banks for more debt and then investing for a positive return. The reason is they look at growth and see none. No one wants to borrow and invest if the economy is stagnant.
11  Bitcoin / Development & Technical Discussion / Observations about Bitcoin Lightning Network on: May 12, 2015, 09:27:15 PM
I have a couple of observations on the Lightning Network.  http://lightning.network/lightning-network-paper-DRAFT-0.5.pdf

1. The random value R used for Hashed Timelock Contracts can be replaced by something selected by the sender.
   a. Alice is sending to Dave through Bob and Carol
   b. Alice has her own secret key, a, and public key, Pa, and looks up Daveís public key, Pd.
   c. Alice uses Diffie Hellman to produce a shared secret, s = H(a[Pd])
   d. Alice generates the public side of the lock, Px = s[Pd], and timelocks the contract
   e. Later Dave (and only Dave) can generate the private side of the lock, x = s*d, where d is Daveís secret and * is the product modulo the order of the curve.
   f. In this variant Px corresponds to H(R) and x corresponds to R, but Dave is NOT involved until he wants to be (to receive the money).
   g. Note that in reality you want s to be unique for each transaction so s = H(a[Pd],m) where m is unique to the transaction. For example the block height.

2. They show transaction graphs with funds being pulled by receiver back up the chain all the way to the sender. A philosophical improvement is to have a protocol that creates a NEW SUB-CHANNEL based on value already locked in the existing channels.
   a. Alice is sending to Dave through Bob and Carol
   b. The first transaction sets up a sub-channel between Alice and Dave UNDER the values in the channels between Alice and Bob, Bob and Carol, and Carol and Dave.
   c. Alice and Dave can now use this sub-channel to transact between themselves (without bothering Bob and Carol) until they decide to close the books and reconcile through the Bob-Carol channels.
   d. In the same way normal channels lock value on the main blockchain to enable the channels, sub-channels lock value in channels to enable the sub-channels to transfer value in a trustless manner.

3. I didnít see any analysis of the limits on total available liquidity that would limit the Lightning Network.
   a. Every Bitcoin channel locks up real liquidity. This is unlike modern credit instruments that create liquidity to match demand.
   b. With 21 million bitcoins, if every user wanted to create a 1 bitcoin channel, we would be limited to 21 million users. Nowhere near the 7 billion shown on the charts.
   c. The only way liquidity can increase is if the value of bitcoin increases, convincing users to lower the values locked in their channels. For example if each channel only locked 3 milli-bits then we could have 7 billion channels.
   d. Iím not sure what the implication to the Bitcoin network would be if most bitcoins were locked in channels.

Interesting stuff to think about.
12  Bitcoin / Bitcoin Discussion / Re: i got a strange payment today, i dunno what from. on: May 12, 2015, 04:48:15 PM
It ties your one address (the one receiving these BTC) to some of your other addresses. This happens when your wallet bundles amounts from your various addresses into one total amount you happen to send.  Transactions with many inputs to form a larger output give whoever wants to look assurance that the same person owns all the input keys.

Like dust sprinkled to make a light beam easier to see, this is just dust sprinkled randomly to make block-chain key ownership analysis easier.
13  Alternate cryptocurrencies / Altcoin Discussion / Re: Proposed New Bitcoin System (Without the hashing) on: May 07, 2015, 06:17:17 PM
How is the VDDB immune to a malicious user that runs 10000000 threads pretending to be 10000000 users with a consensus that is false? He could easily drown out the valid copies of the VDDB.
14  Bitcoin / Mycelium / Re: Mycelium for iOS not working on: May 01, 2015, 09:42:43 PM
Mycelium on the Apple App Store today. Seems to work fine now. I was able to send my coins.

Thanks guys!
15  Bitcoin / Mycelium / Re: Mycelium for iOS not working on: April 23, 2015, 07:50:27 PM
Restart didn't work for me either.

iPhone 6 and Mycelium v1.1
16  Bitcoin / Bitcoin Discussion / Re: Best Bitcoin Android apps and widgets on: April 16, 2015, 05:40:25 PM
Yes I know it's an altcoin app but you can hold and send BTC as easy as a text message to your contacts, what other app does that?

https://play.google.com/store/apps/details?id=org.getgemsmessenger.app&hl=en

Wiper Messenger on the App Store does that for the iPhone. Bitcoin only.

17  Bitcoin / Mycelium / Re: Mycelium Bitcoin Wallet on: April 03, 2015, 02:02:49 AM
Mycelium wallet not currently available on iOS.  Huh
Why do you have an Iphone?
It came with a hug and a kiss from my wife..  Cheesy
18  Economy / Economics / Re: Is deflation truly that bad for an economy? on: April 02, 2015, 04:35:54 PM
The argument for deflation has always been that the holders of cash should be able to claim a fixed fraction of economic output even if that output grows.

With a fixed number of Bitcoins each coin represents 1/21millionths of the whole economy and as the economy grows the holder of 1 Bitcoin still has claim to 1/21millionths of the larger economy. If a home is dropping in value (priced in bitcoin) then this just means it represents a smaller and smaller fraction of the total economy. So maybe it should fall in price in terms of Bitcoin. Same Bitcoin balance buys more.

Some think that's wrong.

This other side of the argument is that a holder of 1 Bitcoin should be able to buy a fixed amount of goods. A crate of apples for example. If the economy grows by 10% and the fraction of value of the total economy that the crate of apples represents falls 10% then so be it. He is still able to buy the crate with his Bitcoin. The economy as a whole requires more Bitcoin over time to account for the extra 10% for this stability in purchasing power to happen.

If one wants his own purchasing power to rise with the economy he should loan his money (and take risk) under an agreement that accounts for inflation, positive or negative. He should not expect to hoard his cash under a mattress and get more goods for them in the future.

In the end we can all agree that instability in Inflation/Deflation is bad. However, absolute inflation vs. zero inflation or deflation, even if stable, is really a choice between a fixed value for your unit of money in the future vs. a fixed fraction of economic output for your money as the economy grows.
19  Economy / Economics / Re: Is deflation truly that bad for an economy? on: April 02, 2015, 04:15:07 PM
Which is a HUGE part of the economy!!!


It is a huge parasite on the economy, yes.  Their true added value is essentially zilch, and they can appropriate them a lot of production, through seigniorage that goes with monetary inflation.


Umm,  production requires credit if you are big business.  Without finance production would massively slow down.

In a mildly deflationary enviroment cost of borrowing is too expensive. People wont afford to buy big ticket things like houses or cars if they had to pay cash.

Yes. You need loans to move the money to the people with the opportunities, the ideas, the drive, the vision. Only in very rare cases do these people have money of their own.

Now with loans the important factor is the stability of the trend. Inflation or deflation that is constant for many years can be accounted for in loan agreements. However, shocks causing inflation or deflation to change can be disruptive, even ruining these people.

 
20  Economy / Economics / Re: Is deflation truly that bad for an economy? on: April 02, 2015, 01:33:30 PM
And they all go down the same % point, so this relative decline makes you at status quo, and you didnt lost anything after all.

=========

And the same for the consumer, yes his wages go down, but the prices of the stuff around him also goes down, so its only an illusion that you lose money , when infact you didnt gain nor loose anything.

Where is the story of sticky wages in this? The one main reason for loss of real output and increase in unemployment during an economic shock and it doesn't show up anywhere in your narrative.

It's never "the same % point" and salaries never drop as fast as they need to, not for the currently employed, so they lose their jobs.
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