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Author Topic: Open Source Bank  (Read 3230 times)
Anonymous
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November 25, 2010, 02:49:18 PM
 #1

The problems the bitcoin community has been having trying to exchange bitcoin for other currencies makes me think of this question -

What if the internet had its own bank ? Why are all these central bankers controlling everything when banking could be as decentralized and open source as bitcoin?

Imagine taking this idea to kickstarter for example and crowdfunding the worlds first open source bank which anyone could buy a share of. Those shares could be bought with bitcoin  Cheesy

The entire internet would be monitoring the banks processes and procedures so greed and excessive fees charged by normal banks would be discouraged by massive attention. Loans could be decided the same way Kiva does them with person to person loans - why should the bank decide who to lend your deposited funds too without any choice?  The internet has the most eyeballs Smiley .

One of the banks here made $4 billion profit last year on the back of huge fees and charges while providing less and less service.


Does anyone think this idea has legs?


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ribuck
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November 25, 2010, 03:05:37 PM
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An open bank is a fabulous idea, but banking is so heavily regulated that I can't see how it could be done. I'd love to be proven wrong though.
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November 25, 2010, 03:08:53 PM
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With bitcoin, everyone is his own bank.  Therefore I doubt the idea of an iternet open bank would be much different than the bitcoin system.
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November 25, 2010, 03:20:58 PM
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Even with bitcoin, banks will be a necessary evil in the longer run. Storing all of your money in your own PC or somewhere else in your house is not a good idea.

Then again, storing an encrypted wallet is much easier and cheaper than storing tons of gold and valuables, so the competition for banks would certainly change.


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November 25, 2010, 03:36:54 PM
 #5

By definition a "bank" accepts deposits and makes loans at interest.

If an institute does not write loans, it's not a bank, it's a financial services business (FSB).

On the internet we call those services "exchangers" and there are already dozens of them.

If you only want to save your money somewhere safe, we have several trusted bullion banks that are designed to work on-line.

I think this thread is another example of how the language has been warped by the propagandists to hide the truth.

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November 25, 2010, 03:41:12 PM
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From what I remember from history, banks started as simple storage places where people could put their valuables. Pooling the resources and investing/giving out loans started later, and sure, that has now become the defacto meaning of bank..

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November 25, 2010, 05:39:22 PM
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Even with bitcoin, banks will be a necessary evil in the longer run. Storing all of your money in your own PC or somewhere else in your house is not a good idea.

Then again, storing an encrypted wallet is much easier and cheaper than storing tons of gold and valuables, so the competition for banks would certainly change.



People will provide information about keeping your savings wallet encrypted and with you, and stored in a cloud. Banks are dying. Bankers will go down with buggy whip makers in the annals of history.

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November 25, 2010, 05:49:42 PM
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People will provide information about keeping your savings wallet encrypted and with you, and stored in a cloud. Banks are dying. Bankers will go down with buggy whip makers in the annals of history.

Banks, as we know it.

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November 25, 2010, 06:05:18 PM
 #9

See my recent post on Ripple open decentralized finance here:

http://bitcointalk.org/index.php?topic=1923.0
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November 25, 2010, 10:33:31 PM
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+1 for p2p lending with Ripple.

http://www.lendingclub.com/ is another means of doing p2p loans, but it uses a third party to help verify creditworthiness.  They also have a secondary bond market where you can resell your bonds.

But member banks in central banking cartels get deposit insurance and implicit bailout guarantee subsidies, not to mention all the regulatory barriers to entry against their competition, so the deck is pretty stacked against honest challengers at this point.  The obvious way to combat this is to establish a money that is impossible for governments to control, and which doesn't need to be stored in banks (lending institutions) for security and convenience, but I'm sure you all know this already  Wink 
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November 25, 2010, 10:52:23 PM
 #11

Dumb question: Why I should lend bitcoins to somebody who I don't know, when price of bitcoins itself rises due to its deflationary principle? I'm pressed to lend (and invest) when money lose its value by lying on my account, which is not an issue in bitcoin.

It can be profitable only when I lend on high percent (% deflation + % interest). In case of inflation, lending is everytime better than leave money on my account (even if interest < inflation). Am I right?

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November 25, 2010, 11:15:34 PM
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Dumb question: Why I should lend bitcoins to somebody who I don't know, when price of bitcoins itself rises due to its deflationary principle? I'm pressed to lend (and invest) when money lose its value by lying on my account, which is not an issue in bitcoin.

It can be profitable only when I lend on high percent (% deflation + % interest). In case of inflation, lending is everytime better than leave money on my account (even if interest < inflation). Am I right?

Your 1% interest rate become more valuable in a deflationary environment. Your bitcoins will purchase more. So 200 + 1% is more like 215 BTC rather than 202 BTC for example.

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November 26, 2010, 12:27:02 AM
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Dumb question: Why I should lend bitcoins to somebody who I don't know, when price of bitcoins itself rises due to its deflationary principle? I'm pressed to lend (and invest) when money lose its value by lying on my account, which is not an issue in bitcoin.

It can be profitable only when I lend on high percent (% deflation + % interest). In case of inflation, lending is everytime better than leave money on my account (even if interest < inflation). Am I right?

Lending any currency (deflationary or inflationary) at any positive rate of interest is better than simply holding onto it, given zero risk of default.

But you are indeed less pressed to lend a deflationary currency over an inflationary one.  For a bunch of reasons, I don't think this is a problem for overall economic growth and stability, though.
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November 26, 2010, 04:17:51 AM
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Does anyone think this idea has legs?


Yes, and it did when it was a crowdsourced short term Internet savings & loan operation called Prosper.com.  It was a great thing up until it got the attention of the regulators, who then promptly forced the company to become a "real" bank.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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November 26, 2010, 06:19:06 AM
 #15

See my recent post on Ripple open decentralized finance here:

http://bitcointalk.org/index.php?topic=1923.0

+1 for this. eliminate the bank altogether - route credit through web of trust.

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Anonymous
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November 27, 2010, 01:58:26 AM
 #16


Does anyone think this idea has legs?


Yes, and it did when it was a crowdsourced short term Internet savings & loan operation called Prosper.com.  It was a great thing up until it got the attention of the regulators, who then promptly forced the company to become a "real" bank.

Centralisation is deadly.  Smiley

When I say bank I mean those institutions that offer financial services. Those could just as easily be dealt with by a decentralized marketplace with a built in web of trust and the ability to match financial experts with those seeking advice or services.

Together with decentralised credit such a ripple and decentralised currency such as bitcoin and decentralized third party ratings and certification it would be pretty resilient to interference.
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November 27, 2010, 02:58:02 AM
 #17

Why just a bank..we need our very own country..  Grin
Anonymous
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November 27, 2010, 04:34:59 AM
 #18

Why just a bank..we need our very own country..  Grin

Countries are so 19th century. Also see Wirtland - http://www.wirtland.com/





kiba
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November 27, 2010, 04:36:44 AM
 #19

Why just a bank..we need our very own country..  Grin

Countries are so 19th century. Also see Wirtland - http://www.wirtland.com/


Now what we need to do is carve up some physical space as enclaves like Lee's Greater Hong Kong.

Anonymous
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November 27, 2010, 04:59:26 AM
 #20

Why just a bank..we need our very own country..  Grin

Countries are so 19th century. Also see Wirtland - http://www.wirtland.com/


Now what we need to do is carve up some physical space as enclaves like Lee's Greater Hong Kong.

We could buy a piece of the sahara desert Im sure the land is going cheaply.  Smiley
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