We need a bank!

[Daily Anarchist]

This whole process seems horribly inefficient to me. It seems like there would be a lot of opportunity there for someone to create a bank. Savers make deposits. Borrowers get loans from the bank. No need for everybody to air their dirty laundry in public. Also, it would be cool if the bank were set up on .onion or .i2p or something. Just saying.

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[Ashkelon]

wonderful idea, let's confirm to all the naysayers that all we care about is laudering dirty money and hiding from the taxman!


now you've been bashed, please develop, it's actually a good idea

[OgNasty]

This exists.
https://bitcointalk.org/index.php?topic=50822.0

[Daily Anarchist]

This exists.
https://bitcointalk.org/index.php?topic=50822.0

I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.

[miscreanity]

I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.

Think outside the interest rate circle-jerk

[Kluge]

Demand deposits would be difficult to make work profitably using BTC (need many depositors, and likely many limits. Alternately, extremely low interest rates as with demand deposits without a very large # of depositors, you'd need a large reserve or face liquidity problems. Pirate's works by having a minimum balance, and he has a yacht-load of coins which aren't committed. If you withdraw too much, you're out until he wants funds not being given by his big lenders, which is quite possibly forever.), but I'd be interested in seeing it happen.

There's also nothing that needs to be made public. I don't name my depositors, and have a pgp key listed in my OP. If a lender wanted, I wouldn't mind not listing them. I've changed/shortened/not-included names in my "past loans" sheet and "current loans" sheet if the lender would like to remain anonymous or doubly-pseudonymous.

[PatrickHarnett]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

[Daily Anarchist]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

A suppose a nice, fancy website, preferably on Tor, with secure communications, a 100% reserve guarantee, independently audited, and generally more confidence that the bank is not actually a ponzi scheme.

[JusticeForYou]

How about a BTC backed USD account?


Think about it...  Possible to give interest, and guarantee that the value of the USD when put in is what you will get out.

[ShadowAlexey]

How about a BTC backed USD account?


Think about it...  Possible to give interest, and guarantee that the value of the USD when put in is what you will get out.

I doubt that some one can guaranty this because exchange rate can get up and down too much + when we are doing this in btc we are getting people more interesting in it, so we can increase btc popularity.
Banking would be very risky, because you have make some policy and when scammers know it they can easily suit to it.

[PatrickHarnett]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

A suppose a nice, fancy website, preferably on Tor, with secure communications, a 100% reserve guarantee, independently audited, and generally more confidence that the bank is not actually a ponzi scheme.

Making an observation about current dollar banks, they have 5% reserves, are not guaranteed, but do have fancy web sites.  There is also the possibility they are a ponzi in disguise.

So, if I had a nice web page, and someone bothered to visit to audit my accounts (for most people that's a 12+ hour plane trip if not longer), you would be happy ?  (actually DoubleC is probably quite close to where I am, and he would probably fall into the trusted category around the forums - never met him, but I've traded several thousand dollars of coins with him)

Looking a little more closely, I could apply the S&P criteria to the operation I'm running - sure I have some funds in coins, and normally run a reserve for at least one of my largest depositors for on-call withdrawal (around 500 coins), and have other coin reserves available at short notice running 200% of my total deposits.  Besides that, I have on-call cash reserves outside bitcoin many time larger again, but given I am running a private "bank", that level of disclosure is probably not warranted.  If people wanted that, then banking with a secured organisation would cost more as a premium service, and I don't think people are at that stage yet.

Further, I have clients that request privacy, so while I might disclose total deposits (around 2000 coins) and could request a number of people to verify the level of investments I have with them (such as Pirate), additional audit might not provide any real benefit.

Still, thanks for your comments.

post script - while I was writing
I don't worry about exchange rates to currencies like USD because my bitcoin business is in bitcoin.  If people wanted USD accounts, they should go and deal with USD banks.

[JusticeForYou]

How about a BTC backed USD account?


Think about it...  Possible to give interest, and guarantee that the value of the USD when put in is what you will get out.

I doubt that some one can guaranty this because exchange rate can get up and down too much + when we are doing this in btc we are getting people more interesting in it, so we can increase btc popularity.
Banking would be very risky, because you have make some policy and when scammers know it they can easily suit to it.

Yea, bad idea. It would never work.

What's the downside again?  USD is currently backed by nothing. If BTC raised they get more money, minus the banks take. If BTC falls from purchase, the at least get their USD back.

But Yea, bad idea... Just a thought.

[Daily Anarchist]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

A suppose a nice, fancy website, preferably on Tor, with secure communications, a 100% reserve guarantee, independently audited, and generally more confidence that the bank is not actually a ponzi scheme.

Making an observation about current dollar banks, they have 5% reserves, are not guaranteed, but do have fancy web sites.  There is also the possibility they are a ponzi in disguise.

So, if I had a nice web page, and someone bothered to visit to audit my accounts (for most people that's a 12+ hour plane trip if not longer), you would be happy ?  (actually DoubleC is probably quite close to where I am, and he would probably fall into the trusted category around the forums - never met him, but I've traded several thousand dollars of coins with him)

Looking a little more closely, I could apply the S&P criteria to the operation I'm running - sure I have some funds in coins, and normally run a reserve for at least one of my largest depositors for on-call withdrawal (around 500 coins), and have other coin reserves available at short notice running 200% of my total deposits.  Besides that, I have on-call cash reserves outside bitcoin many time larger again, but given I am running a private "bank", that level of disclosure is probably not warranted.  If people wanted that, then banking with a secured organisation would cost more as a premium service, and I don't think people are at that stage yet.

Further, I have clients that request privacy, so while I might disclose total deposits (around 2000 coins) and could request a number of people to verify the level of investments I have with them (such as Pirate), additional audit might not provide any real benefit.

Still, thanks for your comments.

post script - while I was writing
I don't worry about exchange rates to currencies like USD because my bitcoin business is in bitcoin.  If people wanted USD accounts, they should go and deal with USD banks.

Can you link me to your bank topic with all of the details?

[Daily Anarchist]

Never mind, found it.

https://bitcointalk.org/index.php?topic=61262.0

Why does Pirate not have his topic sticky?

[JusticeForYou]

Also, Just pointing out. You basically are a bank.

Rather than take BTC for 3% a week or w/e the varying rates are, take USD pay 3% per Month in USD and pocket the difference.


hmm... thinking about it.

[muyuu]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

A suppose a nice, fancy website, preferably on Tor, with secure communications, a 100% reserve guarantee, independently audited, and generally more confidence that the bank is not actually a ponzi scheme.

These guarantees would also mean that you cannot be anonymous. An audited bank would have to provide this information, and in most countries it wouldn't be even legal anyway.

If you want banks you have to place your trust somewhere. If you cannot entrust your money to anybody then you have to go bankless. In this case you'd be trusting Starfish/Pirate.

[JusticeForYou]

Looking for constructive criticism on the current "banking" functions, what do you actually see that is missing?  I provide loans and take deposits, as do others.  What more are you after?

A suppose a nice, fancy website, preferably on Tor, with secure communications, a 100% reserve guarantee, independently audited, and generally more confidence that the bank is not actually a ponzi scheme.

These guarantees would also mean that you cannot be anonymous. An audited bank would have to provide this information, and in most countries it wouldn't be even legal anyway.

If you want banks you have to place your trust somewhere. If you cannot entrust your money to anybody then you have to go bankless. In this case you'd be trusting Starfish/Pirate.

Agreed,

To offer such a service, anonymity would be lost. However, imagine a bank offering 3%/mo or 36%/yr. You would have to tell customers NO (if honest), we can't have you as a customer now.

Currently people are losing value of their USD dollar accounts. They are not even being maintained at a present value of deposit. Mattresses are looking better and better.

[bulanula]

What about the issue of mybitcoin / people claiming they got hacked and robbed ?

[Daily Anarchist]

This exists.
https://bitcointalk.org/index.php?topic=50822.0

I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.

http://lmgtfy.com/?q=payday+loan

Neat! Thanks!

[Daily Anarchist]

This exists.
https://bitcointalk.org/index.php?topic=50822.0

I'm having a hard time wrapping my head around those interest rates. I understand that the market(supply and demand) set interest rates. I'm just having a hard time understanding WHO would pay the interest rates he must charge in order for him to pay those huge rates back to his depositors.

http://lmgtfy.com/?q=payday+loan

Neat! Thanks!

You're welcome. I was simply trying to point out that an industry exists
out there in meatspace and that when it comes to crazy interest rates,
the bankers on these forums are rank amateurs. The wikipedia page,
in particular, is enlightening.

I just finished reading the Wikipedia page. Are you saying that what seems like exorbitant interest rates charged by the loan sharks here are actually a pittance of what the legal payday lenders charge?