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Author Topic: BitBank is now in Beta  (Read 2789 times)
Fiyasko
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May 18, 2011, 04:34:51 AM
 #21

We should lock this thread

http://bitcoin-otc.com/viewratingdetail.php?nick=DingoRabiit&sign=ANY&type=RECV <-My Ratings
https://bitcointalk.org/index.php?topic=857670.0 GAWminers and associated things are not to be trusted, Especially the "mineral" exchange
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rebuilder
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May 18, 2011, 07:20:53 AM
 #22

You seem to be unable to understand that I cannot give out loans without any funding. I also would like to note that one bitcent for ten bit coins is a very low rate (0.1%) and does not apply to values less than 10BTC

Since you all seem so pessimistic, here's an incentive:
If you deposit at least 50 bitcents, than you will get a discount when loans go live.

I'm still working out the JavaScript, but a site will be up soon with accounts and so on.

I understand perfectly well you want us to finance your business. I just don't see why I'd want to. I don't want a loan. If  you can't loan to others, that's your problem. I see no profit in giving you money, so I won't.

Selling out to advertisers shows you respect neither yourself nor the rest of us.
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Too many low-quality posts? Mods not keeping things clean enough? Self-moderated threads let you keep signature spammers and trolls out!
kiba
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May 18, 2011, 07:33:46 AM
 #23

We should lock this thread

Nobody in their mind will do business with this man unless he offer something of value. Losing bitcoin in a bitcoin ewallet is not something that most people call valuable.

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May 18, 2011, 07:36:45 AM
 #24


This is basically the perfect summary of this thread.
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May 18, 2011, 07:57:07 AM
 #25

Do we know that MyBitcoin is not fractional reserve?

Have you ever seen people loaning bitcoins enough to make a fractionate reserve anywhere? Smiley

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May 18, 2011, 08:06:12 AM
 #26

Do we know that MyBitcoin is not fractional reserve?

Have you ever seen people loaning bitcoins enough to make a fractionate reserve anywhere? Smiley

It would be straightforward for MyBitcoin folks to exchange 50% of their reserves for USD, then invest it in questionable, high-yield securities (or even a trip to Vegas).

DustinEwan
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May 18, 2011, 08:31:26 AM
 #27

My question is, what would stop a client from taking out a loan and never paying it back?

Bank's IRL can take legal action against those who don't pay back their loans... how would this be handled in the bitcoin world?
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May 18, 2011, 09:30:29 AM
 #28

It would be straightforward for MyBitcoin folks to exchange 50% of their reserves for USD, then invest it in questionable, high-yield securities (or even a trip to Vegas).

Bitcoin volatility would make it extremely risky to do so with investment goals. And just spending the money like that is quite dangerous...

On the other hand, it is true that they charge nothing and the last time I saw they had no ads... you have a point there, they could be financing themselves with a chunk of people's money. That would be fraud, since it's not advertised as such. But, if they just spend a small percentage, they might get away with it for a long while.

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Nesetalis
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May 18, 2011, 01:57:28 PM
 #29

the flaw... is not "not trying to trick and deceive"
the flaw is you have not created a system of value to the end user.

To any person who put money in your 'bank', it is practically a scam. They recieve absolutely no value, and spend money to do it.
if you want some one to spend 1% of their money on you, give them a reason, and in this much, bitbank has failed miserably. So miserably infact, that i suspect a very low intelligence score. Tongue

ZOMG Moo!
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May 18, 2011, 02:32:48 PM
 #30

bitdragon
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May 18, 2011, 02:43:34 PM
 #31

You need to reward deposits by paying them.
And you pay the depositors less than the % you charge on loans.

Charging depositors does not make any sense at all-

GLBSE seems to provide exactly this opportunity by the way for someone wishing to raise funds-

SgtSpike
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May 18, 2011, 03:43:49 PM
 #32

Quote
What happens if I deposit 9.99 BTC... a lot of times... ?

That's called being a smartass.



You could also notice that bit-bank does not try to trick and deceive you, like most banks.
However, since this seems to not be a very good idea, I'll work this out to still be profitable, and make you more likely to lend.
I originally made this bank because I kept seeing threads on people loaning bitcoins, and it got annoying.
If you want the bank to work, you have to do something along these lines:
- Pay depositors 10% annual interest on their bitcoins
- Make loans for for borrowers at 20% annual interest on their bitcoins
- You take home the difference between the loan interest and the depositor interest, less any expenses for losses on loans not repaid.

The biggest issue, as several people have pointed out already, is that a bitcoin bank would have no recourse to go after someone who doesn't pay their loan back.  So there is an extraordinarily high risk that a borrower will not repay anything, and you would have to eat all of that cost.  An interest rate must be found that allows you to eat that cost on x% of loans, and still turn a profit.

You could always operate it like one of those "payday loan" shops, where you charge 20% interest every 2 weeks.  Shocked
Anonymous
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May 18, 2011, 03:55:09 PM
 #33

You need to reward deposits by paying them.
And you pay the depositors less than the % you charge on loans.

Charging depositors does not make any sense at all-

GLBSE seems to provide exactly this opportunity by the way for someone wishing to raise funds-

Thats what it's there for.  Smiley
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