Here we go again, and the Vault issues certificates as a receipt for said BTC's right.
Because Bitcoin is entirely digital, this might offer the possibility of organized bank runs to keep the banks honest.
or least we would expect real-time auditing ... running totals of total BTC on account and total claims on thse funds ... no reason not to and if BTC addresses are supplied it could be publically auditable by third party.
... modern banks would hate a hard currency cause they can't just paper over the leaky cracks they live off for free. They have to go back to being vaults and nothing else. Financiers on the other hand may get a new lease on life, true entrepreneurs and risk takers.
Transparency would be key, and built in from the get-go. Like I said in one of my earlier posts, this banks charter would be designed to restrain it from all actions besides that which it is explicitly intended for (so no mission creep), because any concentration of value like that is inherently dangerous.
Here we go again, and the Vault issues certificates as a receipt for said BTC's right.
If 'notes' were issued in any form, they would be 100% backed and waiting for withdrawl, which is vastly different than the current banking meme of exponential leverage using deposits as investment capital, and then making sure anything that fails, does so in a spectacular way so as to encourage the government to pick up the tab (lest there be a 'crisis'). Maybe we should just call this
Whole Money Banking for simplicity sake.
Here we go again, and the Vault issues certificates as a receipt for said BTC's right.
Because Bitcoin is entirely digital, this might offer the possibility of organized bank runs to keep the banks honest.
or least we would expect real-time auditing ... running totals of total BTC on account and total claims on thse funds ... no reason not to and if BTC addresses are supplied it could be publically auditable by third party.
... modern banks would hate a hard currency cause they can't just paper over the leaky cracks they live off for free. They have to go back to being vaults and nothing else. Financiers on the other hand may get a new lease on life, true entrepreneurs and risk takers.
A world without mandatory, "free" deposit insurance, and general government babysitting would keep ALL banks honest, because the ones that aren't won't have the blank check of taxpayer support, or the mea culpa of "Well, even if the bank goes out of business from all these dumb things we're doing, you as a depositor will feel no pain and thus have no reason to even care what we as a bank do with your money". Failures need to fail.
The smaller modern banks will probably reconfigure to this model eventually, because it is in their best interest. The bigger banks? They're basically the Marketing division of the Cirius Cybernetics Corporation - And we all know what happened to them.
2) Timed Deposit Accounts - This is basically you making a loan to the bank where you give them say 100 bitcoins and agree to not withdraw them for 30, 90 days or longer, and in exchange the bank pays you a rate of return relative to the amount of time the deposit is for (1 month - 2% 3, month 5%, 6 month 7% etc.), the bank then looks at various projects and people who need loans, determines which ones are benificial and have a good chance of succeeding and therefore paying back the loan,
I very seriously considered offering TD's (Term Deposits) back in late Jan when i first found out about BC and joined the forum...back when BC was about 0.80 cents to the USD...lucky for me i didn't because with the subsequent exchange rate blow out i would of been in big trouble having to come up with the USD to buy BC to cover the interest payments.
There is a reason I'm talking concepts and best practices on this now rather than setting it up myself - Timed Deposits require either the exchange rate to mostly stabilize OR for a pure BTC economy to emerge (even a small niche would be big enough to justify it by being involved and selective about where the loans will be spent. The market isn't developed enough yet for most financial products, and frankly I hope it never is for some of it - I see lots of ideas coming over from real world markets and the flat reality is that not all of them are good - High Frequency Trading will do very bad things to BTC markets, just as they've destroyed USD markets. I think there are potential futures where BitCoin exchanges are the black sheep used only for day trading, and most economic action comes from the BTC Eeconomy.
2%, 3%, 7% per annum is laughable for a CD. I realize that's what they are typically nowadays, but that's not what they used to be.
The reality is nobody knows what interest rates SHOULD be - We just know they're wrong now, and not telling us what interest rates are supposed to tell us - "How Risky Is This Thing I'm Doing".
The numbers I threw out there were off the top of my head, but I think they're more realistic than what you see in USD markets.
Personally, I'm betting on hyperinflation more than the Fed hiking interest from .5% to 20%, which is pretty much what would need to happen to fix the inflation we're at the beginning of.
