Banks as Gateways

[thehedgemon]

I'd like to get get peoples thoughts on what it would take for banks to become gateways.

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[franky1]

i was having this very discussion myself with my bank manager this week. Banks love their fiat, and its not a impossibility that they wont take on bitcoin in the future, much like they offer services for foreign exchange. but right now their business is sticking to the legal tenders of their own country and of partnering countries.

everyone says the bank notes are just as tainted with drug residue as the bitcoin is. but right now legal tender is a product owned by government and licensed to be used by its citizens, with a 99.9% usage from retail and employment legally and a small percentage actually used in crimes.

bitcoin has not reached an acceptable mainstreaming level to counter out the silk road taint.

i know some one will reply with their youtube researched *cough* facts *cough* that bank notes have a much higher drug residue taint then 0.1%. but those facts have to be put into perspective.

EG a university full of students experimenting with drugs will always be shaking hands, sharing meals etc making the pool of cash flow in a university campus have alot higher residue count compared to bank notes found in the purses of soccer moms that have husbands that work on wall street that get money straight from an ATM and spend it at high end retailers.

so take the university residue results into perspective.

banks see bitcoin as a higher legal risk still. my bank manager loves bitcoin and loves the fact that i offer it to customers because i have been honest about taking customer details and knowing roughly the intended destination of the bitcoin, based on the business model and advertising i do, which grabs customers from more of the tourist/mining/retail community instead of strangers on the darkweb. but until bitcoin becomes proper mainstream, used more publicly for every day items. banks wont see much benefit in offering it as a service, due to the risks

[knight22]

Of course banks love their fiat. They can print it out of debt.

[thehedgemon]

i was having this very discussion myself with my bank manager this week. Banks love their fiat, and its not a impossibility that they wont take on bitcoin in the future, much like they offer services for foreign exchange. but right now their business is sticking to the legal tenders of their own country and of partnering countries.

everyone says the bank notes are just as tainted with drug residue as the bitcoin is. but right now legal tender is a product owned by government and licensed to be used by its citizens, with a 99.9% usage from retail and employment legally and a small percentage actually used in crimes.

bitcoin has not reached an acceptable mainstreaming level to counter out the silk road taint.

i know some one will reply with their youtube researched *cough* facts *cough* that bank notes have a much higher drug residue taint then 0.1%. but those facts have to be put into perspective.

EG a university full of students experimenting with drugs will always be shaking hands, sharing meals etc making the pool of cash flow in a university campus have alot higher residue count compared to bank notes found in the purses of soccer moms that have husbands that work on wall street that get money straight from an ATM and spend it at high end retailers.

so take the university residue results into perspective.

banks see bitcoin as a higher legal risk still. my bank manager loves bitcoin and loves the fact that i offer it to customers because i have been honest about taking customer details and knowing roughly the intended destination of the bitcoin, based on the business model and advertising i do, which grabs customers from more of the tourist/mining/retail community instead of strangers on the darkweb. but until bitcoin becomes proper mainstream, used more publicly for every day items. banks wont see much benefit in offering it as a service, due to the risks

when does that high risk ever end though? when is the decision made that it has become low risk? Is it when more businesses accept bitcoin as payment? Perhaps if ripple becomes mainstream? I'm assuming that you work at a bank and I'm wondering if you have any clue what would constitute bitcoin as low risk.

[misterbigg]

For a bank to operate as a Bitcoin exchange (i.e. buy and sell bitcoins using the money in your checking account) or to operate as a Ripple gateway, they would have to have the entire source code audited by a company of their choosing to make absolutely certain that it is robust and reliable (think FIPS).

If there was ever a new version of the code, this auditing would have to take place all over again.

[thehedgemon]

For a bank to operate as a Bitcoin exchange (i.e. buy and sell bitcoins using the money in your checking account) or to operate as a Ripple gateway, they would have to have the entire source code audited by a company of their choosing to make absolutely certain that it is robust and reliable (think FIPS).

If there was ever a new version of the code, this auditing would have to take place all over again.

I first want to say I'm glad that you commented misterbigg. I have read a hell of a lot of your responses across this forum and you always seem to present things in a clear and unbiased manner. Regarding your response however, do you know how often auditing happens now? I mean how difficult would it be for a company to deem the entire source code reliable? In your opinion at least..........

[misterbigg]

I first want to say I'm glad that you commented misterbigg. I have read a hell of a lot of your responses across this forum and you always seem to present things in a clear and unbiased manner.

Thanks

do you know how often auditing happens now? I mean how difficult would it be for a company to deem the entire source code reliable? In your opinion at least..........

Banks are notoriously slow at innovation. Almost all online banking websites suck, they had to be dragged into the Internet age. If you look at the terminals that a lot of tellers use...they are 80x24 line displays connecting to a mainframe! WTF? It is because they don't want to take risks on new software.

Once they have gone through all of the hoops to get a system audited and verified they don't want to change it because that takes a lot of time and comes at great expense. So there is a lot of incentive to just leave it at what is working.

How difficult would it be to determine that the entire Bitcoin code base is reliable? I think it's just a matter of spending money and having security consultants audit the code. There are lots of top tier companies that provide these services. And the U.S. Federal Government publishes standards. Some examples here.

I think that for Bitcoin it is a very well known quantity and shouldn't be particularly difficult. It would probably be easier if the core was separated from the wallet / interface / RPC server (perhaps that has happened already?). This way there is less code to study.

For Ripple, that's another story. Likely a lot more expensive since there is much more code and it also does a lot more. And Ripple hasn't had 4+ years of getting beat on by teenage Russian hackers.

[QuantPlus]

For a bank to operate as a Bitcoin exchange (i.e. buy and sell bitcoins using the money in your checking account) or to operate as a Ripple gateway, they would have to have the entire source code audited by a company of their choosing to make absolutely certain that it is robust and reliable (think FIPS).

If there was ever a new version of the code, this auditing would have to take place all over again.

Ripple gateways will not be US banks...
They will be Panama, Slovenia, Malta, etc.

"entire source code audited by a company of their choosing
to make absolutely certain that it is robust and reliable"

You can't possibly be an engineer...
And make comical over-the-top claims like this.

Virtually all commercial software used by banks...
Is proprietary and there is no source code to "audit"...
Replace "Ripple" with "Windows" to get my point.

LOL, complex leading edge systems like Ripple...
Are coded and tested by Rock Star engineers...
They cannot be effectively "audited" drones working in banks.

[thehedgemon]

How difficult would it be to determine that the entire Bitcoin code base is reliable? I think it's just a matter of spending money and having security consultants audit the code. There are lots of top tier companies that provide these services. And the U.S. Federal Government publishes standards. Some examples here.

Obviously banks play it safe beyond belief, but wouldn't you think that the price it would take to "audit" such a system would be completely eclipsed by sheer profit margin on the business bitcoin could bring in?? I realize this is wishful thinking, but if banks were to adopt it....... so would the masses.

[Este Nuno]

For a bank to operate as a Bitcoin exchange (i.e. buy and sell bitcoins using the money in your checking account) or to operate as a Ripple gateway, they would have to have the entire source code audited by a company of their choosing to make absolutely certain that it is robust and reliable (think FIPS).

If there was ever a new version of the code, this auditing would have to take place all over again.

Ripple gateways will not be US banks...
They will be Panama, Slovenia, Malta, etc.

"entire source code audited by a company of their choosing
to make absolutely certain that it is robust and reliable"

You can't possibly be an engineer...
And make comical over-the-top claims like this.

Virtually all commercial software used by banks...
Is proprietary and there is no source code to "audit"...
Replace "Ripple" with "Windows" to get my point.

LOL, complex leading edge systems like Ripple...
Are coded and tested by Rock Star engineers...
They cannot be effectively "audited" drones working in banks.

If you don't realise it yet...
then you and others...
are not familiar with my...
Doomsday Vision.