Some Questions from my side - first seven "quick questions", and then the most crucial important question at the end:
1.) Will there be an Android App to link to QR scanner, such that I can pay with flexcoins to an outside BTC-Address (like "bitcoin wallet" Android App)?
2.) I do not like that the account is closed after 2 weeks of zero balance. In that case, my flexcoin name would be gone and I would have to open a new account with another name. Very bad idea I would say. Is there at least a protection mechanism, such that I am not allowed to move my balance below 0.00001 Flexcoins or so?
3.) I do not like that 18 month of inactivity leads to closure of the account and loss of all flexcoins. This looks dubious. 18 month can quickly happen, for example if somebody goes to a journey around the world or Himalaya, or a severe disease. And when he comes back, all Flexcoins are gone. I think this period should be extended to 5 years minimum. Could you imagine to extend this period?
4.) Minimum payment of 0.5% or 0.01 BTCs appears a lot. 0.01 BTC = 0.10 USD is already in the order of magnitude of credit card fees, and 0.5% is 50 cent on 100 EUR, which is a lot, too.
5.) Who guarantees me that the terms and conditions do not change against my favour, once I have deposited some BTC funds into the Flexcoin bank? For example increase of fees or shortening of the idle times before the account is closed, etc.?
6.) Are you planning to issue flexcoin credits in the future?
7.) Are you planning to provide interest payments on flexcoin accounts in the future?
8.) You are calling yourself a "bank". Does this mean you are running a fractional reserve system
? The informed reader knows that the main characteristic of a "bank" is that it uses a fractional banking system
. This means, every bank possesses less cash than the sum of the money of all its bank accounts. This means, if every customer of a bank tried to withdraw the whole cash at the same time (a so called "bank run"), the bank could not cash it out - it could only cash out about 2 to 10% of it. (It sounds crazy, but it is no secret, you can read about this everywhere on the internet, even at the web sites of the central banks.) How about the "flexcoin bank"? Are you going to establish a fractional reserve system of Bitcoins with your bank, too? Technically, this would be no problem, because it is highly unlikely that every customer would withdraw his BTC funds from the flexcoin bank at the same time, so some "overbooking" would be possible. This is exactly how the fractional reserve banking system started to develop in banking history of our world. But of course, such banking system would not be desireable, because it means inflating the currency, it would not be limited to 21 Million any more, because there would be more flexcoins then Bitcoins in circulation.
So my question is: If the total number of Bitcoins paid into your bank is, say, 1 Million BTCs, will there be exactly 1 Million Flexcoins in existence, or will there be more then 1 Million Flexcoins? I think a big criticism of the current financial currency system is the fractional reserve
property, because it can create big problems and eventually does so, sooner or later. So for me it would be absolutely crucial that your bank does NOT implement a fractional banking system
, and this would be an absolute Pre-condition before I would use your service, and I guess this is the case for many other informed users, too. So if flexcoin implements a fractional reserve system, Flexcoins are not better than EUROs or USDs in the long term, with all the "diseases" associated to them on the long term.
8.b) If your anwser to quesiton "8.)" is "No, we are NOT going to implement a fractional banking system, there will always be a 1:1 mapping of flexcoins in circulation and Bitcoins deposited in the flexcoin bank"
, then my question is: How will you prove this to the world? There is a possibility to prove it, as described in the following - will you implement it?
Description: For example, you can assign each user a secrete ID or secret nick name (and the user can change this, if he wants), i.e. a nick name that only this user knows himself. And then, you publish on your website (open to be read by everybody) every day (or every hour or so) an up-to-date-list of secret nick names and associated deposited funds. The sum of these funds then amounts to the total number of flexcoins in circulation at this point in time. And everybody can check this. Since the nick names (or IDs) are secret, the list is anonymous, and nobody has to disclose his funds. To anonymize it even further, it is possible that a user defines several
secrete nicknames and distributes his funds over these nicknames as he wishes. Then all these nick names will be listed in the pubic list, such that it would be even harder to track it. And the user could change these nick names at any time. Note that these nicknames are not to be confused with the flexcoin addresses like "coffeeshop"!!
Now, the second part relates to the bitcoins. The Flexicoin bank also would have to publish all Bitcoin addresses (public addresses like "1Msio5Diu3t8jdfg..."), and the associated fund of this address at the time of publishing. This way, every internet user could see for himself (by comparison with data from "blockexplorer") if the amount of funds contained by these BTC-addresses is the same as the sum of all flexcoins, or lower than that. Of course, the flexcoin bank could also list "wrong" Bitcoin addresses in this list, i.e. Bitcoin addresses that they do not actually own. However, this would be dangerous, because if the true owner of this Bitcoin address realizes this, the whole thing would become public and everybody would know that flexcoin uses a fake list to hide the fact that it is actually running a fractional reserve system. In this case, the trust into flexcoin would vanish instantly.
Note that this mechanism I just described is the same as the mechanism that the gold platform BullionVault
is using to prove that the gold that their customers have bought is really existing physically in the vaults. What is the gold in that case is the Bitcoins in our case. And what is the list of funds in the BullionVault case is the list of flexcoins in our case here.
9.) If you are NOT implementing a fractional reserve system, my advise to you would be that you should not call yourself a "bank". Because many people associate the fractional reserve system with a bank (which is correct, because actually this is the crucial thing that "banking" is all about). And this is quite the OPPOSITE OF WHAT THE BITCOIN SYSTEM NEEDS.
9.b) If you do implement a fractional reserve system (i.e. number of Flexcoins > number of Bitcoins deposited in your Flexcoin bank), I have no more to say, other than: "Without me!", and I think it will not be successful, because the Bitcoin users are better informed than the average people in our world, and Bitcoins is exactly the OPPOSITE of the idea of fractional banking.