Bitcoin Forum
October 21, 2017, 01:30:45 AM *
News: Latest stable version of Bitcoin Core: 0.15.0.1  [Torrent]. (New!)
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2] 3 »  All
  Print  
Author Topic: There is a need for a Bitcoin Bank  (Read 5332 times)
gamer4156
Sr. Member
****
Offline Offline

Activity: 379


View Profile
November 03, 2013, 01:34:08 PM
 #21

What bitcoin needs is some brick and mortar locations. A place where I can go and drop off $100,000 in cash and get my bitcoins before I leave. Require multiple forms of ID maybe even a handprint. Require more informoration than banks and follow all the rules. Give them zero reason to shut it down.  I have been thinking about this for a bit now and reading up on the financial rules and regulations. This would be the moment bitcoin hits mainstream. Right now it is too hard to get bitcoins for USD. I have been trying for about 8 days now just to get a few coins. If people could fly into a major city and deposit cash and walk out with their coins, bitcoins would take off in price.
1508549445
Hero Member
*
Offline Offline

Posts: 1508549445

View Profile Personal Message (Offline)

Ignore
1508549445
Reply with quote  #2

1508549445
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1508549445
Hero Member
*
Offline Offline

Posts: 1508549445

View Profile Personal Message (Offline)

Ignore
1508549445
Reply with quote  #2

1508549445
Report to moderator
Golph
Full Member
***
Offline Offline

Activity: 154


View Profile
November 03, 2013, 01:56:59 PM
 #22

Yes we need a bank that can create out of thin air unlimited amounts of bitcoins each month  Wink

The problem is you can't do that with Bitcoins, same with gold Smiley

Get Daily Free SIGNs before too late. SyeED5YaZeVPows6Zx9z1hJ7twNJrKLrJB
coinft
Full Member
***
Offline Offline

Activity: 187



View Profile
November 03, 2013, 02:29:20 PM
 #23


A fractional reserve bitcoin bank is quite impossible, because no one would be able to insure deposits given the tremendous upward potential. 

An uninsured fractional reserve bank is just another risky investment vehicle, and doesn't provide the benefits you are aiming for.

A full reserve bank is possible, but has no way to make a profit or pay interest from this banking business.

That leaves various forms of accidental bitcoin account/wallet providers, who make a profit by being exchanges, advertising or gambling. Exactly what we already have.
crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 03, 2013, 02:59:49 PM
 #24


A fractional reserve bitcoin bank is quite impossible, because no one would be able to insure deposits given the tremendous upward potential.  

An uninsured fractional reserve bank is just another risky investment vehicle, and doesn't provide the benefits you are aiming for.

A full reserve bank is possible, but has no way to make a profit or pay interest from this banking business.

That leaves various forms of accidental bitcoin account/wallet providers, who make a profit by being exchanges, advertising or gambling. Exactly what we already have.


"Do we need bitcoin banking" is a difficult question, but "do we have fractional reserve banking?" is ridiculously simple:
Uninsured fractional reserve banking did, does & will continue to exist in bitcoin.

Think back to Pirateat40 Savings & Loan.  Think of the various "insured" passthroughs (Patrick/Starfish).  Fast-forward to all of the Ukyo stuff.
Fractional reserve lending is profitable, that's how it came into being & that's why it exists.
Enlightened self-interest, free market & the invisible hand worked in consort to establish it as the central pillar of the modern financial system.
Enjoy Smiley
coinft
Full Member
***
Offline Offline

Activity: 187



View Profile
November 03, 2013, 03:40:18 PM
 #25


A fractional reserve bitcoin bank is quite impossible, because no one would be able to insure deposits given the tremendous upward potential.  

An uninsured fractional reserve bank is just another risky investment vehicle, and doesn't provide the benefits you are aiming for.

A full reserve bank is possible, but has no way to make a profit or pay interest from this banking business.

That leaves various forms of accidental bitcoin account/wallet providers, who make a profit by being exchanges, advertising or gambling. Exactly what we already have.


"Do we need bitcoin banking" is a difficult question, but "do we have fractional reserve banking?" is ridiculously simple:
Uninsured fractional reserve banking did, does & will continue to exist in bitcoin.

Think back to Pirateat40 Savings & Loan.  Think of the various "insured" passthroughs (Patrick/Starfish).  Fast-forward to all of the Ukyo stuff.
Fractional reserve lending is profitable, that's how it came into being & that's why it exists.
Enlightened self-interest, free market & the invisible hand worked in consort to establish it as the central pillar of the modern financial system.
Enjoy Smiley


My point is that the insurance schemes of the past did not work. People should have learned it never will with bitcoin, at least not while still growing exponentially. Some of your examples are ludicrous, no one has ever checked or just seen the collateral pirateat40 or Patrick was supposed to have. That's not insurance, that's just plain lies to get people on a ponzi.

In the so called modern financial world central banks have the ability to insure arbitrary losses by just printing new money. This is the reason people still trust banks with their (small) deposits despite the constant news.

This is not possible with bitcoin. Hence a deposit in a fractional reserve bitcoin bank must be seen as high risk investment, in particular more risky than just holding bitcoin. That's not what most people wish for when asking for banking services. And that's why I dispute calling them banks at all, and claim traditional banks are not viable with bitcoins yet. This may change when the market saturation is much higher.
crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 03, 2013, 04:04:14 PM
 #26


A fractional reserve bitcoin bank is quite impossible, because no one would be able to insure deposits given the tremendous upward potential.  

An uninsured fractional reserve bank is just another risky investment vehicle, and doesn't provide the benefits you are aiming for.

A full reserve bank is possible, but has no way to make a profit or pay interest from this banking business.

That leaves various forms of accidental bitcoin account/wallet providers, who make a profit by being exchanges, advertising or gambling. Exactly what we already have.


"Do we need bitcoin banking" is a difficult question, but "do we have fractional reserve banking?" is ridiculously simple:
Uninsured fractional reserve banking did, does & will continue to exist in bitcoin.

Think back to Pirateat40 Savings & Loan.  Think of the various "insured" passthroughs (Patrick/Starfish).  Fast-forward to all of the Ukyo stuff.
Fractional reserve lending is profitable, that's how it came into being & that's why it exists.
Enlightened self-interest, free market & the invisible hand worked in consort to establish it as the central pillar of the modern financial system.
Enjoy Smiley


My point is that the insurance schemes of the past did not work. People should have learned it never will with bitcoin, at least not while still growing exponentially. Some of your examples are ludicrous, no one has ever checked or just seen the collateral pirateat40 or Patrick was supposed to have. That's not insurance, that's just plain lies to get people on a ponzi.

The passthroughs were billed as being secure, and people invested in them as such.  To be honest, i haven't bothered to check the financials of my bank before depositing money either, though most folks on this forum insist that fiat is a ponzi also.

Quote
In the so called modern financial world central banks have the ability to insure arbitrary losses by just printing new money. This is the reason people still trust banks with their (small) deposits despite the constant news.

This is not possible with bitcoin. Hence a deposit in a fractional reserve bitcoin bank must be seen as high risk investment, in particular more risky than just holding bitcoin. That's not what most people wish for when asking for banking services. And that's why I dispute calling them banks at all, and claim traditional banks are not viable with bitcoins yet. This may change when the market saturation is much higher.

I agree that it's riskier to invest money than to hold it, and technically the coin deposited in uninsured bitcoin banks is more accurately described as an investment rather than a deposit, but the distinction is pretty vague.  Insured banks are a relatively new development, and a central authority/entity/lender of last resort is not necessary for fractional reserve banking.  Bitcoin bankers could follow in the footsteps of conventional bankers, forming conglomerates/peer contracts/guild regulations to create a p2p insurance scheme.

The creepy thing is the very same schemes invented by mainstream bankers, the very ones which necessitated regulation, are being rediscovered/reanimated by bitcoin's new banker elite.  Both curious & disheartening to watch.

theonewhowaskazu
Sr. Member
****
Offline Offline

Activity: 448


View Profile
November 03, 2013, 07:49:11 PM
 #27

Its like nobody in this entire thread even bothered to read my OP.

Clearly "normal" banking (everybody trusts a central authority to hold their money, and then this central authority tries to effectively siphon off as much wealth as possible without anybody noticing) isn't necessary for Bitcoin because a wallet is a way of storing your coins without any counterparty risk.

That's now what banking has to be, and that's not what I was talking about. There are other purposes of banks, other than the above. Banks help markets run by providing liquidity and credit. In other words, there's banking as an investment, too, not just banking as a store of value. Bitcoin does need banking as an investment, because those investments do useful things for an economy, and help Bitcoin run smoothly. Bitcoin doesn't need banking as a store of value, because Bitcoin already is a store of value. Bitcoin might need banking as a easy way of transferring money in small quantities (offchain transactions).

You guys seem to entirely ignore all facets of Banking other than store of value, which clearly Bitcoin obsoletes, even though I didn't even mention that outdated form of banking in the OP and was specifically talking about banking as an investment to allow a real credit market to exist.

crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 03, 2013, 08:10:02 PM
 #28

...
You guys seem to entirely ignore all facets of Banking other than store of value, which clearly Bitcoin obsoletes, even though I didn't even mention that outdated form of banking in the OP and was specifically talking about banking as an investment to allow a real credit market to exist.

Have you read the four posts directly above yours?
theonewhowaskazu
Sr. Member
****
Offline Offline

Activity: 448


View Profile
November 03, 2013, 08:40:54 PM
 #29

...
You guys seem to entirely ignore all facets of Banking other than store of value, which clearly Bitcoin obsoletes, even though I didn't even mention that outdated form of banking in the OP and was specifically talking about banking as an investment to allow a real credit market to exist.

Have you read the four posts directly above yours?
Indeed I have. They all focus on banking as a store of value - you say that uninsured bitcoin banks are risky and may lose value - rather than the fact that they could help set up a much needed credit market.

crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 03, 2013, 09:04:12 PM
 #30

...
You guys seem to entirely ignore all facets of Banking other than store of value, which clearly Bitcoin obsoletes, even though I didn't even mention that outdated form of banking in the OP and was specifically talking about banking as an investment to allow a real credit market to exist.

Have you read the four posts directly above yours?
Indeed I have. They all focus on banking as a store of value - you say that uninsured bitcoin banks are risky and may lose value - rather than the fact that they could help set up a much needed credit market.

Quite the contrary.  We're discussing banks as lending institutions, which have been with bitcoin for quite a while.  Pirateat40 presented his scheme as a bank, which, like all other banks, didn't simply "put coin in the vault for safekeeping," but *invested* the money or *loaned* it at a higher rate of interest.  Simple. Edit: Unless the bank does *something* with deposit money, it can't afford to pay interest now, can it?

So yeah, banks as sources of credit are addressed, and shown to be (thus far) sources of much moaning and gnashing of teeth in the world of bitcoin.  I even offered a plausible p2p fractional reserve lending insurance scheme  Smiley

Edit:  The Lending sub-forum, where usury and theft are pitted against each other in an eternal battle of greedz, is a fine example of banking every enterprising young fellow could do in his spare time.
btceic
Sr. Member
****
Offline Offline

Activity: 392


♫ A wave came crashing like a fist to the jaw ♫


View Profile WWW
November 03, 2013, 09:33:32 PM
 #31

Personally I think we need a bitcoin bank for the majority of people with little or no system security knowledge.

Bank as in safely secures my deposits and perhaps something like FDIC for deposits.

♫ This situation, which side are you on? Are you getting out? Are you dropping bombs? Have you heard of diplomatic resolve? ♫ How To Run A Cheap Full Bitcoin Node For $19 A Year ♫ If I knew where it was, I would take you there. There’s much more than this. ♫ Track Your Bitcoins Value
gweedo
Legendary
*
Offline Offline

Activity: 1246


Java, PHP, HTML/CSS Programmer for Hire!


View Profile WWW
November 03, 2013, 09:51:20 PM
 #32

Personally I think we need a bitcoin bank for the majority of people with little or no system security knowledge.

Bank as in safely secures my deposits and perhaps something like FDIC for deposits.

FDIC on deposits? So basically just take your bitcoins, transfer them to FIAT, and you get those features today. Bank are not safe, they are just keep a very small amount of money in the vault and risk all your other savings by loaning or investing in stocks/ businesses. You can do the same thing for your self, put 90% in an online wallet, and invest it. Put 10% on a paper wallet. There you are now a bank.

Want to earn 2500 SATOSHIS per hour? Come Chat and Chill in https://goseemybits.com/lobby
smoothie
Legendary
*
Offline Offline

Activity: 2058


LEALANA Monero Physical Silver Coins


View Profile
November 03, 2013, 10:16:21 PM
 #33

I disagree.

Bitcoin "bank" implies centralization in my view. Centralization implies single-point of failure which implies regulation etc etc etc.

Bitcoin enables you to be your own central bank and to protect your own net worth without it being someone else's counter-party risk.

███████████████████████████████████████

            ,╓p@@███████@╗╖,           
        ,p████████████████████N,       
      d█████████████████████████b     
    d██████████████████████████████æ   
  ,████²█████████████████████████████, 
 ,█████  ╙████████████████████╨  █████y
 ██████    `████████████████`    ██████
║██████       Ñ███████████`      ███████
███████         ╩██████Ñ         ███████
███████    ▐▄     ²██╩     a▌    ███████
╢██████    ▐▓█▄          ▄█▓▌    ███████
 ██████    ▐▓▓▓▓▌,     ▄█▓▓▓▌    ██████─
           ▐▓▓▓▓▓▓█,,▄▓▓▓▓▓▓▌          
           ▐▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▌          
    ▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓─  
     ²▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓╩    
        ▀▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▓▀       
           ²▀▀▓▓▓▓▓▓▓▓▓▓▓▓▀▀`          
                   ²²²                 
███████████████████████████████████████

. ★☆ WWW.LEALANA.COM        My PGP fingerprint is A764D833.        SMOOTHIE'S HEALTH AND FITNESS JOURNAL          History of Monero development Visualization ★☆ .
LEALANA  PHYSICAL MONERO COINS 999 FINE SILVER.
 
btceic
Sr. Member
****
Offline Offline

Activity: 392


♫ A wave came crashing like a fist to the jaw ♫


View Profile WWW
November 03, 2013, 10:38:58 PM
 #34

Personally I think we need a bitcoin bank for the majority of people with little or no system security knowledge.

Bank as in safely secures my deposits and perhaps something like FDIC for deposits.

FDIC on deposits? So basically just take your bitcoins, transfer them to FIAT, and you get those features today. Bank are not safe, they are just keep a very small amount of money in the vault and risk all your other savings by loaning or investing in stocks/ businesses. You can do the same thing for your self, put 90% in an online wallet, and invest it. Put 10% on a paper wallet. There you are now a bank.

Not good enough for 99% of the rest of world, you and I are IT people most are not and don't have the first clue about system security and wouldn't feel comfortable doing so anyway.

♫ This situation, which side are you on? Are you getting out? Are you dropping bombs? Have you heard of diplomatic resolve? ♫ How To Run A Cheap Full Bitcoin Node For $19 A Year ♫ If I knew where it was, I would take you there. There’s much more than this. ♫ Track Your Bitcoins Value
gweedo
Legendary
*
Offline Offline

Activity: 1246


Java, PHP, HTML/CSS Programmer for Hire!


View Profile WWW
November 03, 2013, 10:49:24 PM
 #35

Personally I think we need a bitcoin bank for the majority of people with little or no system security knowledge.

Bank as in safely secures my deposits and perhaps something like FDIC for deposits.

FDIC on deposits? So basically just take your bitcoins, transfer them to FIAT, and you get those features today. Bank are not safe, they are just keep a very small amount of money in the vault and risk all your other savings by loaning or investing in stocks/ businesses. You can do the same thing for your self, put 90% in an online wallet, and invest it. Put 10% on a paper wallet. There you are now a bank.

Not good enough for 99% of the rest of world, you and I are IT people most are not and don't have the first clue about system security and wouldn't feel comfortable doing so anyway.

How hard is it to create a paper wallet?

Want to earn 2500 SATOSHIS per hour? Come Chat and Chill in https://goseemybits.com/lobby
crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 03, 2013, 10:55:05 PM
 #36

I disagree.

Bitcoin "bank" implies centralization in my view. Centralization implies single-point of failure which implies regulation etc etc etc.

Bitcoin enables you to be your own central bank and to protect your own net worth without it being someone else's counter-party risk.

Central banks aren't intrinsic to banking.  There were once many independent banks, issuing their own currencies, loosely regulated by the states in US.  They existed in parallel with the Banks of the United States & printed their own paper.  Then the regulations were loosened up, and banks started failing.

OP has a valid point -- banks are needed to fund large projects like building ... really big things.  It's pretty inconvenient to have to crowd-source everything.  Having to solicit funds from the great unwashed stymies industry (which may or may not be a bad thing).
To raise capital without banks, one needs to be a great salesman on top of being a great builder/entrepreneur/warmonger etc., etc.

If you want, a bank is just a local loan shark -- who pays you interest when you lend him money, and lends out your money at a higher interest.
He's pretty much a bare-bones full-reserve bank. Smiley
indianplayers
Member
**
Offline Offline

Activity: 113


View Profile
November 04, 2013, 03:42:44 PM
 #37

There's a site called "co!nb@se.c0m" that does this already.
freedomno1
Legendary
*
Offline Offline

Activity: 1344


Activity: 9001 == OP


View Profile WWW
November 04, 2013, 07:46:07 PM
 #38

I disagree.

Bitcoin "bank" implies centralization in my view. Centralization implies single-point of failure which implies regulation etc etc etc.

Bitcoin enables you to be your own central bank and to protect your own net worth without it being someone else's counter-party risk.

The problem is that some people can't be bothered to protect their own wallet and want someone else to do it, for those people the idea of a bank may be a better idea, the solution is not that their should be a bank but how can we design one that isn't evil Smiley

petersiddle98
Sr. Member
****
Offline Offline

Activity: 279


View Profile
November 05, 2013, 02:17:06 AM
 #39

There is already a bank for Bitcoin, MCXNOW is one...

crumbs
Full Member
***
Offline Offline

Activity: 210



View Profile
November 05, 2013, 12:51:09 PM
 #40

Bank reeks of centralisation which is something we should be wary of

Trouble is BTC forces us to take personal responsibility - many of us are not used to that - takes us out of our comfort zones

Many of us are not used to digging ditches -- that's why we have ditch-diggers.
Many of us are not used to building cars -- that's why we have auto manufacturers.
Many of us are not used to doing surgery -- that's why we have surgeons.

Centralization starts kicking in as soon as life gets past single-cell organisms.  Man, for instance, has brain cells that do braining, lung cells that do the lunging, and ass cells that do assing.  All specialized, all centralized.  Every thing more complex than mold works that way.
Pages: « 1 [2] 3 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!