Bitcoin-Central, first exchange licensed to operate with a bank. This is HUGE

[grondilu]

http://blog.bitinstant.com/blog/2012/12/10/the-controversy-of-bankhood.html

This seems to be a good article indeed.

About the linux comparison:  GNU/Linux do coexist nowadays with MS Operating systems.  Pretty much in the literal sense of the expression.  Many, many linux newbies started with a so-called double-boot.  And there are also plenty of tools that allow a MS user to get accustomed to GNU tools, such as Cygwin.  In the other way around, there is Wine.  I believe those tools are strategically very important for the success of FOSS, because they provide an easy transition for people who have been educated to work with MS or Apple systems.  Without this, the learning curve would probably be much too steep and fewer people would manage to learn GNU/Linux.

I believe it's pretty much the same with the idea of a bicoin-friendy bank.  Even people who don't want to use something like that should realize the tremendous amount of people this can bring into bitcoins.   Really this can't be bad.

Imagine a very big and famous bank such as Goldman Sachs, Barclay's, BNP-Paribas or whatever started to offer a bitcoin exchange to their customers.  Any of their client could, when accessing his online-bank account, convert some of his money into bitcoins and execute bitcoin transactions, for instance in order to retrieve some of his bitcoins into his local wallet, or in order to pay someone using the bitcoin network .  Would you consider this a bad thing for the bitcoin project?  I would be very surprised if you would.

In other words, imagine the guys from bitcoin-central were not coming from the bitcoin community, but from the banking community.   It would be pretty ironic if one way for evil banksters to hurt us, would be to actually join us, wouldn't it?

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[becoin]

It would be pretty ironic if one way for evil banksters to hurt us, would be to actually join us, wouldn't it?

Ok, let me ask you this question. If you have tied your fortunes to bitcoin and your life depends on the profits you make operating bitcoin based business when will you support transactions in alternative competing criptocurrency and 'interface' your system with theirs?

[davout]

Ok, let me ask you this question. If you have tied your fortunes to bitcoin and your life depends on the profits you make operating bitcoin based business when will you support transactions in alternative competing criptocurrency and 'interface' your system with theirs?

No but you'll fail since you'll be economically inefficient compared to people who do.

[DeathAndTaxes]

At least in the US banks make more money from fees then they do from interest.   Bitcoin is about freedom and freedom means freedom of choice.  If Bitcoin became very popular (say PayPal sized in volume) most users would WANT to put their money in a "bank".  They don't want the responsibility that comes with the freedom Bitcoin offers.  Sure Bitcoin gives you the freedom to bypass the banks but it also gives you the "freedom" to lose your entire life savings as easily as you lost those vacation photos from last year.

No reason a bank couldn't be very very very profitable making fees on overdraft "protection", off blockchain transactions, and currency exchanges.

[davout]

At least in the US banks make more money from fees then they do from interest.

Source ?

[mrvision]

Crina Belododia's answer to that post is AMAZING. WOW!

[mrvision]

At least in the US banks make more money from fees then they do from interest.   Bitcoin is about freedom and freedom means freedom of choice.  If Bitcoin became very popular (say PayPal sized in volume) most users would WANT to put their money in a "bank".  They don't want the responsibility that comes with the freedom Bitcoin offers.  Sure Bitcoin gives you the freedom to bypass the banks but it also gives you the "freedom" to lose your entire life savings as easily as you lost those vacation photos from last year.

No reason a bank couldn't be very very very profitable making fees on overdraft "protection", off blockchain transactions, and currency exchanges.

Do you understand how bitcoin works? Bitcoin is already in a bank, and you owe the private key to your funds. That's it. Your bitcoins are secured in the blockchain.

If you want someone to keep a record of your private password will it make it more secure?

[davout]

Do you understand how bitcoin works? Bitcoin is already in a bank, and you owe the private key to your funds. That's it. Your bitcoins are secured in the blockchain.

If you want someone to keep a record of your private password will it make it more secure?

Maybe not everyone wants to be their own bank...

[Ignore@YourPeril]

Ok, let me ask you this question. If you have tied your fortunes to bitcoin and your life depends on the profits you make operating bitcoin based business when will you support transactions in alternative competing criptocurrency and 'interface' your system with theirs?

No but you'll fail since you'll be economically inefficient compared to people who do.

You are both right. And that makes it easy to pinpoint when bitcoin will really take off: when any bank dealing in bitcoin is blacklisted from the IBAN(?) transfer network, or something to that effect.

[DeathAndTaxes]

At least in the US banks make more money from fees then they do from interest.

Source ?

Here is one example:
http://www.npr.org/blogs/money/2012/08/03/158047349/how-americas-biggest-bank-makes-money

Note the recession and near 0% rate banks can borrow at has reduced the share that fees make up.  In this article Chase "only" generated 35% of revenue from fees.

[grondilu]

Crina Belododia's answer to that post is AMAZING. WOW!

Damned,  she makes some good points indeed.

« Asking for the State to bless Bitcoin businesses in an attempt to induce its birth is not the way to grow adoption. Anyone who is impatient for it to grow needs to be learn patience and write more software, not run to the State to cripple the baby before it is born ».

I'm confused now.  You guys might actually be right.

[DeathAndTaxes]

Do you understand how bitcoin works? Bitcoin is already in a bank, and you owe the private key to your funds. That's it. Your bitcoins are secured in the blockchain.

Yeah I think I might know a little something about how Bitcoin works.  Thanks for asking.

If you want someone to keep a record of your private password will it make it more secure?

For me personally?  No.  However "I" an not the entire planet worth of potential users.  Did you read the post?  Many people will SIMPLY NOT WANT TO BE RESPONSIBLE FOR THEIR MONEY!  The risk of uninsured loss, theft, or robbery is simply too much of a risk. 

I mean lets pretend Warren Buffet had his entire network in Bitcoins.  $40 billion in completely irreversible, untracable funds.  Think that might present a security risk to him?  Think maybe he would want to NOT have direct access to his own funds? 

Many people simply aren't tech savy enough to run their own wallet (securely both against loss and theft).  Do you think your grandmother is likely to install the blockchain, pick out a 12 digit passphrase, keep routine offline backups, ensure the system is free from malware, etc?

[Ignore@YourPeril]

  Do you think your grandmother is likely to install the blockchain, pick out a 12 digit passphrase, keep routine offline backups, ensure the system is free from malware, etc?

Here is my suggestion for distributed bitcoin banking for granny: https://bitcointalk.org/index.php?topic=99921.msg1384968#msg1384968 msg 57. Here I expand on it, with beautiful pics of banknotes to go: https://bitcointalk.org/index.php?topic=92969.600

[davout]

Crina Belododia's answer to that post is AMAZING. WOW!

No, her points are retarded.

She (He?) is completely off the bat when speaking about regulating Bitcoin, no one ever said anything about regulating Bitcoin. I'll go in a little more depth later about our interactions with regulatory bodies, but basically we neither asked permission, nor sought regulation for Bitcoin.

Fiat is regulated : fact.
Bitcoin is not : fact.

Bitcoin exchanges are by definition an interface between these worlds, so I fail to see how it comes as a big surprise to anyone that in order to be sustainable in this business an exchange has to be licensed for the fiat-handling part.

A gummy bears/EUR exchange would probably have had the exact same problems, but probably less stupid fanatics and fanboys running around screaming and calling us heretics to The Cause™.

[MPOE-PR]

The funny part of course is that this exact debate was being discussed on Trilema two months ago.

Bitcoin is about freedom and freedom means freedom of choice.  If Bitcoin became very popular (say PayPal sized in volume) most users would WANT to put their money in a "bank".  They don't want the responsibility that comes with the freedom Bitcoin offers.  Sure Bitcoin gives you the freedom to bypass the banks but it also gives you the "freedom" to lose your entire life savings as easily as you lost those vacation photos from last year.

A much too easily and frequently overlooked point. Bitcoin will never kill banks, it will just transform them into "Bitcoin Wallet Security Providers", much like cars haven't destroyed chariot riding, they've just transformed it into "hansome cab rides".

[thoughtfan]

Crina Belododia's answer to that post is AMAZING. WOW!

Damned,  she makes some good points indeed.

« Asking for the State to bless Bitcoin businesses in an attempt to induce its birth is not the way to grow adoption. Anyone who is impatient for it to grow needs to be learn patience and write more software, not run to the State to cripple the baby before it is born ».

I'm confused now.  You guys might actually be right.

What amused me about that particular comment response, and I think it at least suggests why so many an-caps are getting so het up about all this is I think many of them think they are living in an Ayn Rand novel.  They forget for real people making real decisions in the real world a decision to involve an organisiation that is subject to governmental regulation does not suddenly turn them into a sleazy Rand character who will invariably turn into a monster.  As original as she was, and I do have a lot of respect for what she brought to the table, fortunately real people and the real world, are more complex, more creative, more beautiful and much less cynical than Rand's imagination.  And despite the haughty moral certainty with which Crina Belododia's lengthy response was written a friend should tap him/her on the shoulder and remind them they're not actually John Galt!

[thoughtfan]

...no one (at least at Paymium) ever said anything about regulating Bitcoin. I'll go in a little more depth later about our interactions with regulatory bodies, but basically we neither asked permission, nor sought regulation for Bitcoin.

I wouldn't pay too much attention to this if I were you.  Thinking about what I just posted about some of the an-caps living in an Ayn Rand novel it really explains something I've been puzzling about.  Crina Belododia is not the first to make accusations based on ridiculous assumptions regarding the motives and long-term plans of you, Bitpay and others.  In their simplistic world-view if you have made a decision with which they can see a parallel with one of Ayn Rand's characters, you are that character in their eyes and so they believe their conclusions as to how you will behave in future, stifling all competition, getting into bed with regulators to buy you favours at everybody else's expense etc. are actually justified.

The irony is that many think this way of seeing the world and of judging people is actually objective!!

The knee-jerk reaction that Bitcoin-Central, by involving a partner that is subject to regulation is necessarily commiting some kind of philosophical bad; then jumping through mental hoops to find a way of rationalising the conclusion they'd already come to - including totally unfounded accusations - is not what I'd call being objective.

[Serith]

We've written a blog piece on this fascinating and controversial subject of bankhood...

This is generally a response to the controversy around Paymium's announcement, and more specifically Matonis' Forbes piece yesterday.

http://blog.bitinstant.com/blog/2012/12/10/the-controversy-of-bankhood.html

Integration and easy to use is what people want from Bitcoin and this what makes it easier to become mainstream, and certainly this is where it's all going. But it also demotivates people from creating and using tools to circumvent current laws and the whole system becomes dependent on current regulations. Your blog past has valid arguments and as usual the truth is somewhere in between those two view points, but don't pretend like you know exactly what is the correct thing here in a long term.

[Lethn]

Do you understand how bitcoin works? Bitcoin is already in a bank, and you owe the private key to your funds. That's it. Your bitcoins are secured in the blockchain.

If you want someone to keep a record of your private password will it make it more secure?

Maybe not everyone wants to be their own bank...

Pussy

[davout]

Pussy

No thank you, I had my share for today.