What functions would/could a Bit bank provide?

[notig]

I was wondering if in the future a bit bank is created what services could it have?   A few examples I was thinking of that might be possible:

A bit bank might just be an easier place to store bitcoins for the average user so they didn't have to worry about losing the coins
A bit bank might be just an "additional signature" to someones wealth. You could store your own wealth how you wanted but you could require some signature from the bank. (not to get off subject but this would be especially useful for preventing bitcoins from being used to kidnap for ransom possibly. If you stored your wealth with a bank that had a policy of not signing wealth over in the event of a ransom then it might thwart that however unlikely scenario)
Would a bit bank also be able to provide "faster" transactions?

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[pinger]

Have you thinked on natural uses of a Bank, loans / mortgages?

[notig]

Well since banks don't lend out depositor money but rather create new money through loans and fractional reserve banking... I didn't think along those lines. I suppose there could be a bank that offers loans with interest rates for bitcoins.

[DannyHamilton]

Well since banks don't lend out depositor money but rather create new money through loans and fractional reserve banking...

I'm not so sure that this is true in personal banking.

[DPony13]

Interest and time deposits


though it would be hard to do that

[CurbsideProphet]

Well since banks don't lend out depositor money but rather create new money through loans and fractional reserve banking... I didn't think along those lines. I suppose there could be a bank that offers loans with interest rates for bitcoins.

Of course they lend out depositor money, where do you think the "reserves" in fractional reserves comes from?

[davout]

I'm not so sure that this is true in personal banking.

Well, it is.

[DannyHamilton]

I'm not so sure that this is true in personal banking.

Well, it is.

Reliable non-tinfoil-hat source backing up your statement?

[wormbog]

How about a bank that stores all deposited money in bitcoin? This bank would:

* allow accounts to be funded with their bitcoin or USD (thinking US-centric for the moment)
* allow deposits and withdrawals in USD or bitcoin
* automatically convert USD deposits to bitcoin, and convert back for USD withdrawals
* instead of paying interest, account holders gain value as bitcoin appreciates
* issue debit cards drawn against the account
* provide a smartphone app for easy direct spending of bitcoins
* charge all fees in bitcoin
* initially use mtgox for conversion of funds, but eventually operate its own exchange (and earn money from the spread in buy/sell)
* provide security and guarantee bitcoin and USD funds from theft
* allow members to set percentage of funds to hold in bitcoin vs USD (risk management)

A bank like that would quickly become my primary bank.

[MichaelBliss]

I'm not so sure that this is true in personal banking.

Well, it is.

Reliable non-tinfoil-hat source backing up your statement?

http://www.youtube.com/watch?v=WKF8XHeQHpU

[DannyHamilton]

I'm not so sure that this is true in personal banking.

Well, it is.

Reliable non-tinfoil-hat source backing up your statement?

http://www.youtube.com/watch?v=WKF8XHeQHpU

That's a cute fairy tale.  I don't see any reason to believe what he is saying is a fact though.

[MatthewLM]

Banks are redundant.

[davout]

Reliable non-tinfoil-hat source backing up your statement?

I have no desire to prove anything or convince you of anything.
If you desire knowledge or proof you will find it.

But I mean, simple question, what does "personal banking" even mean ? Like loans to private individuals ?

[MichaelBliss]

I'm not so sure that this is true in personal banking.

Well, it is.

Reliable non-tinfoil-hat source backing up your statement?

http://www.youtube.com/watch?v=WKF8XHeQHpU

That's a cute fairy tale.  I don't see any reason to believe what he is saying is a fact though.

Max Keiser is an expert in the field of finance (esp financial fraud), and a former insider...hell he invented the algorithms that JP Morgan etc use for their high frequency algorithmic trading scam.   Anyway, do your own research and see if it's true or not.  You asked for a source, you got one, and you call it a fairy tale. 

Of course banks don't have the money they lend out, why do you think we're off the gold standard anyway? 

[DannyHamilton]

But I mean, simple question, what does "personal banking" even mean ? Like loans to private individuals ?

Sorry, I meant retail banking.  As opposed to an "Investment Bank", or "Central Bank".

[creativex]

But I mean, simple question, what does "personal banking" even mean ? Like loans to private individuals ?

Sorry, I meant retail banking.  As opposed to an "Investment Bank", or "Central Bank".

Since the repeal of Glass–Steagall there's little difference. They're casinos with FDIC backing.

[davout]

But I mean, simple question, what does "personal banking" even mean ? Like loans to private individuals ?

Sorry, I meant retail banking.  As opposed to an "Investment Bank", or "Central Bank".

There's this hot topic in Europe right now about separating bank acitivites between "retail" and "investment" banking (advertised as legit vs. casino banking).

There really is no difference between what you call retail and investment banking, banks are allowed, to a certain extent, to balance debt obligations from borrowers with monetary creation, effectively realizing the money-as-debt paradigm, the debt is money, therefore it is perfectly logical to create as much money as people are willing to borrow.

Look at it the intuitive way, do you really think people collectively deposit enough money into banks for all the houses they collectively buy and borrow money for ?

[notig]

Well since banks don't lend out depositor money but rather create new money through loans and fractional reserve banking... I didn't think along those lines. I suppose there could be a bank that offers loans with interest rates for bitcoins.

Of course they lend out depositor money, where do you think the "reserves" in fractional reserves comes from?

From deposits. Reserves are deposits and whatever they lend out is money they create. The fractional reserve originally meant how much gold backs up the money. Now it means how many deposits (which are considered reserves) there are which determines how much new money (through loans) can be given.

If all banks did was lend out other peoples money then there wouldn't be any "fractional reserve" since everything would be a reserve. And............. there wouldn't be any money since that is the mechanism which creates money and if it didn't exist we wouldn't have any.

Of course what this means is that a bitcoin bank that did lend out couldn't lend out in excess of it's reserves. So that automatically limits it's profits as compared to a regular bank that simply creates money and charges interest on that money it creates. But it could still probably be profitable since the way regular banks do it I would consider to be evilly profitable.

[Vernon715]

I think that you should have it set up like a normal bank, but with bitcoins only.

[davout]

I think that you should have it set up like a normal bank, but with bitcoins only.

If it means the same fractional reserve requirements then I'll pass.