Coming Soon: BitBank

[kjhd456]

BitBank will be a way for all of you people who found something they HAVE to buy, but just can't afford. I will be loaning bitcoins with a fair interest rate.
You must provide several details to get a loan.

Name
PayPal E-mail (Needed to fine people who don't pay back - see below)
Desired Amt.
Links proving your trustworthiness. More links = lower interest rate.

The interest rate will be starting at 10%, and losing 1% for every trust-link. I will also loan to people without links , at 15% penalty rate.
I will fine 5$ every month if you do not pay for 3 months consecutively. If you are unable to pay a loan, contact me and we will work things out.
Payments are monthly
Minimum loan is 10 BTC
Max is 250.

Soon I will be expanding into bonds and bank accounts, and a website will be up soon.

The bank is closed until I finish the infrastructure.

[tomcollins]

BitBank will be a way for all of you people who found something they HAVE to buy, but just can't afford. I will be loaning bitcoins with a fair interest rate.
You must provide several details to get a loan.

Name
PayPal E-mail (Needed to fine people who don't pay back - see below)
Desired Amt.
Links proving your trustworthiness. More links = lower interest rate.

The interest rate will be starting at 10%, and losing 1% for every trust-link. I will also loan to people without links , at 15% penalty rate.
I will fine 5$ every month if you do not pay for 3 months consecutively. If you are unable to pay a loan, contact me and we will work things out.
Payments are monthly
Minimum loan is 10 BTC
Max is 250.

Soon I will be expanding into bonds and bank accounts, and a website will be up soon.

The bank is closed until I finish the infrastructure.

In before bankruptcy.

[Anonymous]

Lending at interest in a deflationary currency is ill-advised.

[marcus_of_augustus]

Lending at interest in a deflationary currency is ill-advised.

Yes, but it could be quite entertaining ... wonder what the depositors will be thinking?

[dust]

"Real" banks have legal means to pursue and collect on clients who fail to pay.  How will you protect yourself from people taking anonymous money and running away?

[jo.bo.co]

I'm new here, and don't claim to be a bitcoin expert... but for what it's worth, I do think this idea has potential. Loans are what drive economies, and without the ability to get a loan in BTC, it would be hard to have a large number of organic, bitcoin through-and-through firms.

But yes, it is hard to manage a lending institution in a highly volatile currency. The fisher equation simply states that banks should set their interest rates at
nominal interest rate=desired interest rate + expected inflation
In bitcoins, the inflation (or, in this case, deflation), is ridiculously hard to predict, so this lending is basically a highly risky betting game.

The advantage of bitcoin is that people expect unexpected things to happen to the exchange rate, so I would argue that a lot of people would be OK if all interest rates were variable.

A bank chooses an indication of inflation (for now, exchange rate relative to some currency might work), and sets a real interest rate. All loans are variable interest rate, found by the fisher equation.

[burtyb]

I will be looking into this, but I think I will be using paypal, if I can force an agreement that lets me take money if they don't pay back. People are also encouraged to prove their trustworthiness, so, while people have no credit rating, I can make on for them.

They might see it as "buying" BTC with PayPal which most likely isn't going to work... Not sure what the rules are for Amazon Payments but I think they allow you to preauth payments.

ChrisB.

[RustyShackleford]

While there is of course no precedent, there is nothing stopping you from taking someone to court if you are both in the same country and there is a contract of some kind. It would make an interesting show for Judge Judy.

In the end, this is the only way a collector can force you to pay them anyway, USD or anything, is to just take you to court for it.

[Xenland]

I suggest you have written contracts that are printed out and signed and then sent to you by mail with a copy of there drivers lisence or id card. With all that info would hold up in court for sure. Although with this method it will probubly be hard for you to gain trust from others what youll do with information and may not even work scince everyone likes beig anonymous to an extent

[SzeChun]

Please do not screw yourself over and look at potential banking laws in your country.
Setting up an un-registered bank is setting yourself up to be filed for money laundering/ponzi schemes etc.

[carbonpenguin]

Maybe set it up as a co-operative bank?
http://cuhistory.blogspot.com/2011/04/bitcoin-natural-experiment-for-credit.html