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Author Topic: DC Bitcoin Bank  (Read 1081 times)
keewee
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October 14, 2013, 12:03:35 AM
 #1

Just saw this on Reddit (dcbitcoinbank.org) but I can't see how it can work  Huh

Surely any withdrawals of the (high) interest must ultimately be paid from other depositor's bitcoins because the 4% deposit fee is going to be eaten up within 4 days. Ponzi?

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joesmoe2012
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October 14, 2013, 04:14:44 AM
 #2

365% interest...not sure how that could possible be sustainable...

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October 14, 2013, 11:33:30 AM
 #3

Pretty suspicious about a bitcoin bank paying out interest.  The bank runs on Cyclos open source banking software, which I have programmed in before, and the site presentation looks like effort was put into it. 
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October 14, 2013, 12:47:38 PM
 #4

Ponzi?
Yes.

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October 15, 2013, 08:05:29 AM
 #5

365% interest...not sure how that could possible be sustainable...


It's 26% p.a. so not 1% per day.  So less likely to be a Ponzi scheme?

This is the way I see it - please correct me if I'm wrong  Smiley  If you read the how it works then your bitcoins are converted to USD and you receive the interest on the USD amount and then that is converted back to BTC to pay you out.  I.e if the bitcoins price  increased by more than 26% p.a. then you would lose out in USD terms.  On the other hand if the BTC/USD price did not increase by more than 26% or even fell then you win.  So the actual USD gain is 26% p.a. minus the BTC/USD gain p.a.  Their example shows the BTC price falling which demonstrates that you receive more bitcoin 1.89 (from a 1 BTC investment) and a 26% p.a.  increase in USD terms.   If you do the maths where the BTC price rises to $200 over 12 months then you still get a 26% gain in USD terms but you get back .945 BTC. 

(Clearly this gives DC Bitcoin Bank the option to actually trade BTC for profit which makes them financially more viable if they get the trading right!. I would like to see self regulation to prevent this)

This scheme is pretty much giving you a choice between keeping your BTC as an investment for capital gains against the USD or investing in DC Bitcoin Bank and betting that BTC/USD will not increase by more than 26% p.a. over the term you pick. 

Only problem I have is that the website does not show the sort of information that I would normally expect to see for an investment institution and therefore demonstrate how they might pay you back if their investments went against them.
keewee
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October 15, 2013, 08:12:58 PM
 #6

365% interest...not sure how that could possible be sustainable...


It's 26% p.a. so not 1% per day.  So less likely to be a Ponzi scheme?


The website has been changed since my original post. The original offer was for 1% daily. The link I followed on reddit was titled "DC Bitcoin Bank pays 1% interest Daily, Invest, Buy and Sell, Grow" posted by user "dcbitcoinbank" http://www.reddit.com/r/Bitcoin/comments/1odx09/dc_bitcoin_bank_pays_1_interest_daily_invest_buy/

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October 16, 2013, 01:10:20 AM
 #7

365% interest...not sure how that could possible be sustainable...


It's actually 34.8 % interest per year. If not compounding.
keewee
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October 16, 2013, 01:23:02 AM
 #8

365% interest...not sure how that could possible be sustainable...


It's actually 34.8 % interest per year. If not compounding.

It is now. See my post above. When the website launched it was clearly stating 1% daily interest. The fact that it has suddenly changed makes it all the more dubious I reckon

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October 16, 2013, 01:33:40 AM
 #9

Created an account, login doesn't work, just refreshes the screen, also would not let me set a password longer then 12 characters, so if did deposit i'd want a bit more security then just my 12 character password!
Feels a bit scammy :/



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keewee
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October 16, 2013, 01:38:12 AM
Last edit: October 16, 2013, 01:48:40 AM by keewee
 #10

Amazingly, they've done a good job of removing all traces of the 1% daily offer. The results still show in a Google search but all the pages have vanished. Found this posted on Facebook though:


And this:

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justmyname
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October 16, 2013, 02:28:59 AM
 #11

More likely a 100% loss than a 34.8% gain.  Cheesy
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October 18, 2013, 09:33:21 AM
 #12

http://dcbitcoinbank.org/?nr=0
and it's gone.

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