What about a BITCOIN BANK ??

[grtthegreat]

Let's start by saying the first fact every new user comes to know about Bitcoin. "Bitcoin is A Decentralized Digital Cryptocurrency". But my thinking is what about creating a bank which functions the same way as normal banks that trade with fiat currency do but uses only bitcoins as its currency. No, it won't be under any government. It would work itself as an independent organization and would have its headquarters at some country (most probably US) where bitcoin is completely legal. Yeah, it may pay tax to the government. (Sorry, but I am not much aware of the rules. So, any comments would surely be appreciated). I have been seeing the lending and thread and have myself given many loans just to know if this was safe. I mean to say, the banking system that we see in our real lives is completely flawless and clean. It has been established and refined over and over centuries. So, why not put a step forward and initiate a change.

Some things I would like to say which can improve things:

1. Implementing steps like KYC (Know Your Customer) which makes the person mandatory to submit legally verified documents in a case he needs loans.
2. Making things real. The person comes to the office, submits his documents so that his identity is personally and manually verified.

In short, I would like to say that lets build a bank which functions the same way as the traditional banks work but would use bitcoin. Come on guys, its time to convert this virtual currency to real and healthy currency.

PS: Guys, sorry if this looks non-professional or childish, but hey, this is how a discussion starts by corrections and finally a flawless and clean system comes up.

[nerdydev]

It would be nice to have a place to go like this where you could store your bitcoins(in cold storage), borrow bitcoins and exchange coins for fiat but I think a hole bank would not relay be necessary. Banks are often used for transmitting money to and from accounts, bitcoin can do this its self. In my eyes this would basically just be an exchange so what benefit would it add to the community that makes it different form the other exchanges?

Just a thought - Nerdydev.

[vm_mpn]

Haven't used any of these, and there is so much scam out there I would be terrified to even try.

https://haobtc.com
https://deltafinancial.com

[RealKruncha]

This sounds like what you're talking about: https://www.coinfloor.co.uk/

UK approved and based in London, totally legit with tax etc.

EDIT: i know i'm a noobie now (account stolen) - so just want to say, always check out websites thoroughly before depositing coins (or fiat)

K.

[nerdydev]

This sounds like what you're talking about: https://www.coinfloor.co.uk/

UK approved and based in London, totally legit with tax etc.

Shame that they are having to use a polish bank account for a uk buisness, UK banks seem to be petrified of the bitcoin community.

[jonald_fyookball]

inevitable.  not everyone wants to be responsible for all their holdings.

[General_A]

I think in some aspects a bitcoin bank would be more like a traditional bank than any of these modern day 'financial institutions' that go around pretending to be an average business. They're not. As we all know they create the very fabric the money we use and see around us, leading to an unbelievable advantage over all. A bitcoin bank would be going back to basics. Although one would expect fractional reserve lending to be still going on, it wouldn't be in the same monopolistic, ruthless fashion as current financial institutions conduct their businesses. A bitcoin bank would have to be very cautious when approaching lending. There will be no bailouts by governments or money creation available to a bitcoin bank  . You never know banking could become respectable again, but I wouldn't put my bets on it   

[KenJackson]

... what about creating a bank which functions the same way as normal banks that trade with fiat currency do but uses only bitcoins as its currency.

Coinbase offers much of what you're looking for.
You can store your bitcoins there, just like a savings account.
You can exchange currencies (e.g. USD <=> BTC).
You can transfer bitcoin to a merchant, something like a checking or charge account.

About the only thing that's lacking is getting a loan.  I don't know of anywhere you can get a loan directly in bitcoin, and I'm guessing it won't happen until laws catch up so both parties are protected.

Actually, the point of bitcoin is to do away with much of what you need a bank for.

[1Referee]

It would be nice to have a place to go like this where you could store your bitcoins(in cold storage)

That's the same as storing your coins on an exchange.

What's the point of bringing your coins to a bank when you can store them yourself?

[Crypty3]

It would be nice to have a place to go like this where you could store your bitcoins(in cold storage)

That's the same as storing your coins on an exchange.

What's the point of bringing your coins to a bank when you can store them yourself?

People could do the same with money but choose not to.

[philiveyjr]

It would be nice to have a place to go like this where you could store your bitcoins(in cold storage)

That's the same as storing your coins on an exchange.

What's the point of bringing your coins to a bank when you can store them yourself?

So u can be care free if u have big amounts.!! about the hacks n stealing.! Which happens quite a lot these days.!

[bitcoinmining]

We're trying to get rid of the banks and you're saying 'Bitcoin Bank'. There is nothing like independent bank, it's something unreal!

[crazyearner]

We're trying to get rid of the banks and you're saying 'Bitcoin Bank'. There is nothing like independent bank, it's something unreal!

Agreed. I would prefer to keep my own Bitcoin in my own wallet be my own banker and I control what I want when I want not to be in control of someone else like the Banks and give them funds to use elsewhere and then if shit hits the fan to close like a few bank building societys in UK had done in 2012 and 2013 and got screwed so big. Least with Bitcoin you can control it yourself send without the hassle of massive fees like banks charge when sending funds over seas and classing as an exchange fee and administrator fee. Bitcoin done almost instantly and and see progress of it been accepted though the block chain without much hassle.

If everyone started using Bitcoin and removed banks out the factor would be a very moment for banks to close down and BTC to rule and dominate the world for transactions.

[QuestionAuthority]

Haven't we done this already?

[inBitweTrust]

Haven't we done this already?

Yep, and it worked out fantastically, ... for one guy.

In short, I would like to say that lets build a bank which functions the same way as the traditional banks work but would use bitcoin. Come on guys, its time to convert this virtual currency to real and healthy currency.

He is working on a second one if you are interested:

https://bitcointalk.org/index.php?topic=855109.0

[QuestionAuthority]

I knew this had been discussed before.

https://bitcointalk.org/index.php?topic=8601.0

https://bitcointalk.org/index.php?topic=4782.0

https://bitcointalk.org/index.php?topic=2783.0

https://bitcointalk.org/index.php?topic=22553.0

[KenJackson]

I knew this had been discussed before.

And after all, we're only allowed one thread for each topic.  And each person who wants to add to the thread must read through all 2000 previous chit-chat posts.  That's what keeps the forum fun.

[deine mudder]

tl, dr

I'm my own back.

[grtthegreat]

It would be nice to have a place to go like this where you could store your bitcoins(in cold storage)

That's the same as storing your coins on an exchange.

What's the point of bringing your coins to a bank when you can store them yourself?

Everyone can look after their liquid cash too but people do prefer banks. So, it could be better if theres some good bank that would take care of your funds.

Also, the hero members and legendaries who were early comers to the bitcoin scene do own a good amount of bitcoins. And yeah, they definitely know how to safeguard them but there have been many "my bitcoins were stolen" threads. So why not build a bank and store them in its safe.

Its foundation stone can be setup in collaboration with all the highly trusted members here like Vod, Tomatocage, DannyHamilton, CanaryInTheMine, John K., dooglus etc.

[QuestionAuthority]

I knew this had been discussed before.

And after all, we're only allowed one thread for each topic.  And each person who wants to add to the thread must read through all 2000 previous chit-chat posts.  That's what keeps the forum fun.

The great thing about reading old threads is the perspective you get from the people that no longer post here or post infrequently like Gavin. He is in a couple of those threads. That's not to say it can't be discussed again but look at the history of the discussion too. You might find something no one thinks of in the current discussion.

[fryarminer]

You do not really own your bitcoin unless you know your private keys.

A bank would be good for two purposes: getting interest, and getting loans.

I suppose you could set up a way that the bitcoin generates interest as long as it is at the bank, but the individual can withdraw at any time using the private key. That gives the individual the security that they will not lose their bitcoin if the bank folds.

How to secure repayment of loans would be interesting. You would have to create a method of credit.

[grtthegreat]

You do not really own your bitcoin unless you know your private keys.

A bank would be good for two purposes: getting interest, and getting loans.

I suppose you could set up a way that the bitcoin generates interest as long as it is at the bank, but the individual can withdraw at any time using the private key. That gives the individual the security that they will not lose their bitcoin if the bank folds.

How to secure repayment of loans would be interesting. You would have to create a method of credit.

That's what I exactly meant. It would be good to see the bank using multisig address. But it could also be done using cold storage. It can be done by storing priv keys on some offline storage. We can secure repayment by setting up strict KYC (Know Your Customer) norms.

And since the interest rates would be low (around 7-8% per annum), it wouldn't be a HYIP or a ponzi. And if ROI on loans be set at 9.5% per annum, so the bank will also get enough profit (the ROI on loans minus ROI on deposits, approximately around 1.5 to 2.5 %), it would be also easy to run the whole bank.

[1Theodore]

NO NEED BANK FOR BITCOIN

BITCOIN IS ALL ABOUT BE YOUR OWN BANK!!!!!!!!!!!!!!!!!

[grtthegreat]

NO NEED BANK FOR BITCOIN

BITCOIN IS ALL ABOUT BE YOUR OWN BANK!!!!!!!!!!!!!!!!!

Yeah but seems like you haven't understood the essence of this topic. Even if you have cash in your hands, you can be your own bank, then why go to a bank and deposit money there ?

[grtthegreat]

Some Recommendations that can help according to me:

1. A fully filled KYC form should be enough with a complete manual identity verification.
2. Verification of income using salary slip etc.
3. Saving the private keys of the cold storage offline and completely safe.
4. Good interest rates on deposits and loans.
5. Manual sanction of loans and a semi-automatic procedure.

[blg425]

Basically a two way ATM already does this for you, include a big office and personell and you'll be paying for it

[Soros Shorts]

4. Good interest rates on deposits and loans.

Can you beat these rates?

https://bitcointalk.org/index.php?topic=81542.0

[grtthegreat]

4. Good interest rates on deposits and loans.

Can you beat these rates?

https://bitcointalk.org/index.php?topic=81542.0

It was too long. So, I couldn't read it now as I have some other work to do. So, here is what I think are ideal rates per annum.

On Loans
9.5% per annum.

On Savings
7.5% per annum.

Please let me know if it is greater than the rates in the above thread or not.

[Possum577]

This is a great idea and if you have the ability to make it happen you should definitely spend the time. There are only a few Bitcoin banks you'd have to compete with currently - Coinbase is the only one that comes to mind but I know there are others.

[grtthegreat]

This is a great idea and if you have the ability to make it happen you should definitely spend the time. There are only a few Bitcoin banks you'd have to compete with currently - Coinbase is the only one that comes to mind but I know there are others.

But banks don't buy and sell. That's what coinbase does. Also, it is a bitcoin wallet. I am not saying about opening a wallet service. I am saying about opening a bank which will give loans, have deposits made and pays interest on your deposits and takes interest on loans.

The deposits can be of two types:

1. Recurring Deposit - You deposit a fixed amount every month and you get paid after a year with a interest of 8% (can differ) on your total amount.
Ex.: If you deposit one bitcoin every month, you get 12 BTC + 8% = 12.96 BTC at the end of a year. Although the profit is not huge but hey, this is not a ponzi or HYIP.

2. Fixed Deposit - You deposit an amount for a fixed period of time (say 6 months) and you get an interest on it.

So, this is how banks work (atleast, this is how it happens here in India).

[Febo]

But my thinking is what about creating a bank which functions the same way as normal banks that trade with fiat currency do but uses only bitcoins as its currency.

Banks dont trade currencies. Exchanges do that. There are plenty exchanges trading alts with bitcoin as currency.
Banks lend money to businesses and rent money for that. and making profit with the difference of that.

For that would be needed lots of only BTC business. that dont exist yet. Most people would rather lend money in currency they expect will stay at least close to what was when he borrow it.
If i am farmer and breed sheeps. i will take loan to buy 100 sheeps, and in 2 years will return 20% more of it. I plan to make 50% profit in that time, so 20% will go to bank and 30% to me.
Would i risk to take loan in Bitcoin. Price might boost 10 times? So i would have to pay 10 times more i loaned, but my profit was just half of what i borrowed.

[Unbelive]

But my thinking is what about creating a bank which functions the same way as normal banks that trade with fiat currency do but uses only bitcoins as its currency.

Banks dont trade currencies. Exchanges do that. There are plenty exchanges trading alts with bitcoin as currency.
Banks lend money to businesses and rent money for that. and making profit with the difference of that.

For that would be needed lots of only BTC business. that dont exist yet. Most people would rather lend money in currency they expect will stay at least close to what was when he borrow it.
If i am farmer and breed sheeps. i will take loan to buy 100 sheeps, and in 2 years will return 20% more of it. I plan to make 50% profit in that time, so 20% will go to bank and 30% to me.
Would i risk to take loan in Bitcoin. Price might boost 10 times? So i would have to pay 10 times more i loaned, but my profit was just half of what i borrowed.

Exactly. First you need to be able to buy sheep with Bitcoins and also Bitcoin needs to become stable. IT will soon no worries.

[Guido]

be your own bank
that's one of the main reasons for bitcoin and alts

[axel2078]

be your own bank
that's one of the main reasons for bitcoin and alts

Agreed.

[needFREElunch]

4. Good interest rates on deposits and loans.

Can you beat these rates?

https://bitcointalk.org/index.php?topic=81542.0

That was a scam. As were most other bitcoin "banks".

I don't think it will ever be possible for any kind of bank to accept bitcoin deposits on any large scale because the risk of scam is too high. Bitcoin was designed so you control your own private keys

[moriartybitcoin]

Creating a 'bank' for bitcoin is a ridiculous idea .. the whole point of bitcoin to enable individual users to 'be their own bank'

duh