What about a BITCOIN BANK ??

[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