Banks and bitcoin

[Dabs]

Like someone else said, the manufacturers or banks can also do loans against their own products (such as cars, houses, motorcycles) or do financing with interest. In any case, if you default on your loan they will get back or repossess their item.

Banks could also pro-rate the interests on BTC by making it dependent on one of the fiat currencies. In which case, you basically get a bank still operating on the said fiat currency and BTC is just a medium. As the rates change, your value in the bank changes. That would protect the bank, but then, no one would have an incentive to deposit any BTC with them.

What someone could offer is a deposit service which gains interest that is computed continuously and not a fixed interest rate, sort of like an investment or mutual fund (or stocks.) But again, no one would have an incentive to deposit any BTC with them unless you don't know how to do your own investing, or can live with the really small effective interest rate.

Also, banks or entities attempting to be like a bank would have minimum deposits that will not earn interest, minimum maintaining deposits, minimum deposits that earn interest, or something similar. For example, they will only open an account if you deposit 100 BTC, but you earn no interest until your account has at least 500 BTC.

If you had 500 BTC and didn't know what to do with it, with an annual interest rate of 1% per annum, your account will have 505 BTC after one year.

That really sucks. Real banks operate that way with their savings accounts, so they suck too.

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[Fjordbit]

I think it's more likely that it would start with credit unions. Credit unions don't promise a fixed payout, but they give a payout to the depositors of the lending profits they make in that month. Offering interest might be fine right now while bitcoin is inflationary, but once the rate of inflation falls, it would be hard to actually offer a fixed payout.

[nameface]

Largely I do not see banks survive in a Bitcoin world.

Banks do two things:
1. Store large amounts of money securely.
2. Transfer money.

Bitcoin does both.

Exactly I use coins because I'm tired of banks fucking us over with fees and inflation.

[nameface]

If you want your bitcoin to earn for you, you should invest in something with potential (re: GLBSE, Mpex, etc...).
I don't think a bitcoin will earn interest sitting in a bank. Likewise, they will not become devalued through inflation while sitting in cold storage.
But I do believe the value of bitcoins vs. all other forms of wealth will increase dramatically over the next few years, so holding them in cold storage could earn a HUGE return. Who needs a bank to store BTC?