A possible future use of bitcoin for convenience?

[Peter Lambert]

Today my mother-in-law was explaining a predicament she is in. She will be closing on a house she is buying here in Michigan next week. Her husband is traveling, she is here in Michigan, but their bank is in Illinois. They have been told they need to bring a certified check to the closing, which is happening over the Thanksgiving day holiday, but they do not yet know the exact amount they need to give. She is freaking out because she does not know if they can get the required money to bring to the closing in an acceptable form.

As I was listening to this, I was trying to figure out if using bitcoins could make things easier. (Yes, I know this would require many more people to embrace and accept bitcoins, just imagine with me here.) Using bitcoins would eliminate the weekend and holiday downtime. They know approximately how much they need, so they could have that and some extra in a wallet. Private keys are easy to take with you while traveling or moving across the country. They are as good as a certified check: once you send them, the recipient knows you actually have that amount of money, and there is no way for you to take it back. Assuming that the volatility is more contained in the future, they would not even have to have a set bitcoin amount, the price could be in dollars. They could then show up to the closing, where the final amount is decided upon. The price could be then converted to bitcoins using current exchange value and that amount of bitcoins sent.

So here are the things that need to happen for this future use case:
- More people must be aware of bitcoins, so that it will even be something they think of.
- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.
- Value has to stabilize. A sale or buy of $50,000 should be shrugged off by the market as just normal trading.

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[FreeMoney]

Yeah, eventually Bitcoin is going to be so easy that it will feel like you can simply will your money to dance any way you like. The way money is now will not be believable to future generations (even if bitcoin fails). It's just so bad.

[JusticeForYou]

- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.

Irrelevant.... first whom would give such a designation? If BTC becomes prevalent, banks will accept them. But I am curious as to why you would put them in the "Bank" ( a centralized institution for control and protection of money). The whole purpose it that "Banks" would be useless other than for storing tangible objects.

But if you insist, I will hold onto your BTC and be your "Bank".... and loan out your BTC and the whole mess starts again...

[Immanual Go]

- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.

"Bank" ( a centralized institution for control and protection of money).

I'd put them in a bank for that exact reason.

[JusticeForYou]

- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.

"Bank" ( a centralized institution for control and protection of money).

I'd put them in a bank for that exact reason.

Just want to make sure you know what you are saying....

Currently your BTC is and always be in the Block Chain, as long as you have your key, your BTC is there.

In order for a Bank to accept them, you will have to send them to their account (key) that you would not know, only "some" probably more than 1 person at a bank knows. Imagine a hacker that could get ahold of those customers Keys. Talk about a run on the bank, they could steal everyones money in a matter of seconds.... Now, how is the bank suppose to repay you.... your BTC...

Not discouraging the thought tho.... Banks would have a role to play... but not their current role. And obviously there would need to be many things worked out.

[Shawshank]

So here are the things that need to happen for this future use case:
...
- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.
...

I am glad to tell you that Bitcoins are "not illegal". On the other hand, legal tender issues aside, you can't force anybody into accepting any commodity or currency. Not even Bitcoin :-)

[Peter Lambert]

- Bitcoins must be designated as "not illegal" so that institutions such as banks will accept them.

Irrelevant.... first whom would give such a designation? If BTC becomes prevalent, banks will accept them. But I am curious as to why you would put them in the "Bank" ( a centralized institution for control and protection of money). The whole purpose it that "Banks" would be useless other than for storing tangible objects.

But if you insist, I will hold onto your BTC and be your "Bank".... and loan out your BTC and the whole mess starts again...

The point of the transaction I described is to give money to a bank or some such institution in order to get a house. Who needs to give the designation of "not illegal" - the party who is receiving the funds, so they are willing to take them in the form of bitcoins. How they arrive at that designation will probably be a combination of seeing a large number of people using bitcoins, and some sort of legal case which involves bitcoins.

The point here is not to "put bitcoins in the bank", it is to "pay the bank with bitcoins".

[JusticeForYou]

The point here is not to "put bitcoins in the bank", it is to "pay the bank with bitcoins".

Yes, good point... my apologies...

One would think that for the proper fee.... say 7% they would take them now... as long as the liquidity in the exchange was near instant.

They would be fools not to... especially Greek, Italian, or Spainish banks. It would cover what they have to pay in their Bonds... hehe

[wareen]

This is an interesting question: In the future, when people accept bitcoins as payment, will they give a discount for the security of bitcoins, or will they charge extra to accept payment in bitcoins?

I'd expect that in the medium term these two will cancel each other out nicely.