SC5 founds a Bitcoin Bank

[Zangelbert Bingledack]

So long as the community around bitcoin is only interested in denominating the value of their goods/services/investments in USD instead of BTC bitcoin will remain a penny stock and have no chance of becoming a currency. The deflationary nature is a very bad thing for a currency to have and you are all slowly seeing why (while still not connecting the dots and continuing to think bitcoin will actually be a world currency one day). You're so close to getting it.

You tend to forget that bitcoin is really really young and little in capitalization, hence, it is unstable.
It will stabilize over the years and then it will be more easy to use for a greater variety of day to day transactions.

Gold is deflationary but nobody sees gold as bad!!  

The gold standard was abandoned for a reason?

Yes, of course. Goverments and bankers couldn't confiscate people's belongings via inflation. Don't you agree?

Inflation exists to insure an active economy and is not only a good thing but is entirely necessary for a functioning currency/economy based off of that currency. Out of control inflation can be bad but if your currency gets to pick one nature and your choices are inflation or deflation then the choice is obvious to anyone who doesn't have more conspiracy theories and paranoia than sense. Have you ever taken an economics class or read a paper or book in your entire life?

LOL. You swallowed your government propaganda like a good little schoolboy I can see. If the mainstream understood economics they'd stop being perpetually surprised at every development.

[alexeft]

Can someone explain to me what the use of a bitcoin bank might be?

I mean, why would I want to deposit my bitcoins with a bank if bitcoins don't really exist anywhere else except in the blockchain which is more like a public general ledger.

I would have to trust them with my private key, which, to me, is rather decreasing security.

[moni3z]

Can someone explain to me what the use of a bitcoin bank might be?

I mean, why would I would to deposit my bitcoins with a bank if bitcoins don't really exist anywhere else except in the blockchain which is more like a public general ledger.

I would have to trust them with my private key, which, to me, is rather decreasing security.

To make interest while they loan out your coins, at least according to the press release. They promise a '100% transparent bank' where you will see at all times the amount of funds available in the bank and funds currently loaned out. I see it getting hacked into oblivion or only available to their employees.

[Mosper]

So long as the community around bitcoin is only interested in denominating the value of their goods/services/investments in USD instead of BTC bitcoin will remain a penny stock and have no chance of becoming a currency. The deflationary nature is a very bad thing for a currency to have and you are all slowly seeing why (while still not connecting the dots and continuing to think bitcoin will actually be a world currency one day). You're so close to getting it.

You tend to forget that bitcoin is really really young and little in capitalization, hence, it is unstable.
It will stabilize over the years and then it will be more easy to use for a greater variety of day to day transactions.

Gold is deflationary but nobody sees gold as bad!!  

The gold standard was abandoned for a reason?

Yes, of course. Goverments and bankers couldn't confiscate people's belongings via inflation. Don't you agree?

Inflation exists to insure an active economy and is not only a good thing but is entirely necessary for a functioning currency/economy based off of that currency. Out of control inflation can be bad but if your currency gets to pick one nature and your choices are inflation or deflation then the choice is obvious to anyone who doesn't have more conspiracy theories and paranoia than sense. Have you ever taken an economics class or read a paper or book in your entire life?

LOL. You swallowed your government propaganda like a good little schoolboy I can see. If the mainstream understood economics they'd stop being perpetually surprised at every development.

I don't have to swallow anything because I can read and infer things for myself as I have a functioning reasoning center in my brain. It's unfortunate that you suffer from the tragic libertarian syndrome. Your entire point of view is basically economic slave morality. It's hilarious.

[alexeft]

Can someone explain to me what the use of a bitcoin bank might be?

I mean, why would I would to deposit my bitcoins with a bank if bitcoins don't really exist anywhere else except in the blockchain which is more like a public general ledger.

I would have to trust them with my private key, which, to me, is rather decreasing security.

To make interest while they loan out your coins, at least according to the press release.

This assumes that bitcoin reaches stability, else, this interest would come from borrowers who would have to face huge bitcoin value increases + interest.
Who would get a loan like that before bitcoin stability for the bank to make profit and me to get this interest?

And what about the risk? We are suffering from banks overlending our deposits. Look at Cyprus!

[bb113]

Can someone explain to me what the use of a bitcoin bank might be?

I mean, why would I would to deposit my bitcoins with a bank if bitcoins don't really exist anywhere else except in the blockchain which is more like a public general ledger.

I would have to trust them with my private key, which, to me, is rather decreasing security.

To make interest while they loan out your coins, at least according to the press release.

This assumes that bitcoin reaches stability, else, this interest would come from borrowers who would have to face huge bitcoin value increases + interest.
Who would get a loan like that before bitcoin stability for the bank to make profit and me to get this interest?

And what about the risk? We are suffering from banks overlending our deposits. Look at Cyprus!

Businesses that get paid in bitcoin?

[moni3z]

And what about the risk? We are suffering from banks overlending our deposits. Look at Cyprus!

Read the press release:

Built-in autonomous mechanism for preventing the next bank crisis

The open books resulting from the 100% transparency promise mean that the customers can monitor the health of the bank in realtime. This in turn leads to an autonomous control mechanism. If the bank’s customers at any time regard the bank’s financial health to be below a trustworthy level, they will withdraw their money and the bank will collapse. As a result for the bank to keep on creating shareholder value it needs to stay healthy at all times.

100% transparency promise

All loans granted using the customers’ savings are directly transmitted from the customer Bitcoin accounts to the borrower account. You as a customer know exactly how much of your money is currently lent out.

hmm.. and I guess they will take foreign deposits though I don't know how this is possible with existing banking laws, unless of course this is an April fools joke

April’s special deal: All money moved from Cyprus will be guaranteed a positive interest for lifetime.

[solomon]

Cool stories bros.

Can we confirm/deny the validity of the title of this thread?

[alexeft]

Can someone explain to me what the use of a bitcoin bank might be?

I mean, why would I would to deposit my bitcoins with a bank if bitcoins don't really exist anywhere else except in the blockchain which is more like a public general ledger.

I would have to trust them with my private key, which, to me, is rather decreasing security.

To make interest while they loan out your coins, at least according to the press release.

This assumes that bitcoin reaches stability, else, this interest would come from borrowers who would have to face huge bitcoin value increases + interest.
Who would get a loan like that before bitcoin stability for the bank to make profit and me to get this interest?

And what about the risk? We are suffering from banks overlending our deposits. Look at Cyprus!

Businesses that get paid in bitcoin?

I suppose that's one case, probably the only one. Thanks

[nathanghart]

Pays interest on Bitcoin savings

my skin just jumped off my body and hid under my desk....

[alexeft]

Omg, it will be decades before the banks get their heads around open and freely auditable books with all the money accounted for

 

[herzmeister]

In a free market, that means also in a free currency market, there is no such thing as an inflationary currency or a deflationary currency.

Because there is no currency that will be regulated top-down. We're largely only familiar to planned monetary systems.

In actuality, the differences between currency, commodity, and asset would dissolve.

Once the demand for bitcoins has largely satisfied, it will have to compete with any other asset out there.

It will stop acting deflationary when there are better stocks to invest in. People will put their money there then.

[alexeft]

Let's imagine a bank in a bitcoin environment, meaning the bank and its peers (depositors and debtors) only operate in bitcoin. The roles of the bank would be:

1) A helpdesk for users that need technical help
2) Loan bitcoins to others.

But what happens when a debtor defaults on their loan? Since bitcoins can't be generated out of thin air, either the bank or the depositors take the hit. In essence, the bank becomes a place to risk one's bitcoins rather than a safe haven like the wallet already is. It doesn't really matter that their books are public, someone is going to default anyway at some point. Correct? Wrong? What do you think?

[alexeft]

Hmmmm, it sounds good.

Still, when a loan would be given, actual bitcoins would have to be taken out of the depositors' accounts for the debtor to have them in his own account, unlike the current status quo of fractional reserve banking where depositors and debtors all have all their money in their accounts.

Does that work?

[bb113]

Hmmmm, it sounds good.

Still, when a loan would be given, actual bitcoins would have to be taken out of the depositors' accounts for the debtor to have them in his own account, unlike the current status quo of fractional reserve banking where depositors and debtors all have all their money in their accounts.

Does that work?

I would think the depositors need to be confident that the bank can vet lendees successfully. It could work, pretty cutting edge though.