Topic: A New wallet which helps against volatility and to some extent Govt Regulation. (Read 934 times)
January 11, 2014, 11:17:23 PM
Wallets can also come under the purview of banks. They have the security infra to protect them.
January 11, 2014, 11:12:40 PM
Um, nope it doesn't protect against the volatility of btc. While it might protect you from loosing money if and when the price crashes. It will loose money when btc appreciates from the holding price. When you re-convert you loose btc in such cases.
That is what i meant. This cannot be treated as investment. What i meant was you will not lose fiat value if the btc rates went down.
That kind of fluctuation is everywhere when you convert one currency to other. take USD to INR and vice versa.
In 2008, 1 USD was worth Rs 44.00 INR. But later USD appreciated and today 1 USD is worth Rs 62.00
I can see a day when banks and other financial institutions using these kinds of apps to do a money transfer across the world.
I feel this might one day replace wire transfer with some additional modifications.
Banks always love fiat and they would love to hold their balance in fiat as against btc for all the compliance purposes.
At the same time, money transfer becomes so much easier and less costlier when they do it through btc as against conventional wire-transfer.
And nope, banks wont use these kind of apps for a simple reason - they charge a premium/commission for the options and forward swaps. If banks do accept btc in future, they would rather sell options/swaps than use such apps.
I know about options and swaps. That is one way of protecting against volatility.
Regarding banks not using btc. Search for a whitepaper by JP Morgan Chase.
They published a white paper with the methodology exactly similar to bitcoin (but never mentioned bitcoin in their whitepaper).
They plan to come up with their own algo and probably a different coin which is closed loop and available within the chase bank networks.
They have even applied for a patent for this in USA as well. If you see, chase is the intermediary bank for almost all the wire transfers originating from USA and this number is huge so why not use bitcoin like system rather than the old wire transfer system and even charge customers for it.
They will make more money by reducing their costs while they still charge customers. Customers need not know that they are using crypto behind the scenes (similar to this wallet) because customers always see their balance in fiat. And since they will have their own method and used within their bank networks (which i presume they will come up with their own coin) there is no question of volatility. They might even fix a rate like 1 Chase coin = 1 USD.
Source :
http://gettoknowbitcoin.com/chase-ing-bitcoin-is-jpm-preparing-to-unveil-its-own-electronic-currency/
http://www.itnews.com.au/News/367188,jpmorgan-patents-bitcoin-like-payments-system.aspx
Link to Patent : http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=20130317984&OS=20130317984&RS=20130317984
And pray tell me, where did I say banks not using btc or cryptos? Let me repeat in case it was unclear first time around "if banks use crptos or btc, they would rather sell options or swaps than offer walllets."
Please do read about mark to market balancing too.
If you still think wallets like these have any use in future, I can simply shake my head and say all the power to you.
January 10, 2014, 08:53:06 AM
Um, nope it doesn't protect against the volatility of btc. While it might protect you from loosing money if and when the price crashes. It will loose money when btc appreciates from the holding price. When you re-convert you loose btc in such cases.
That is what i meant. This cannot be treated as investment. What i meant was you will not lose fiat value if the btc rates went down.
That kind of fluctuation is everywhere when you convert one currency to other. take USD to INR and vice versa.
In 2008, 1 USD was worth Rs 44.00 INR. But later USD appreciated and today 1 USD is worth Rs 62.00
I can see a day when banks and other financial institutions using these kinds of apps to do a money transfer across the world.
I feel this might one day replace wire transfer with some additional modifications.
Banks always love fiat and they would love to hold their balance in fiat as against btc for all the compliance purposes.
At the same time, money transfer becomes so much easier and less costlier when they do it through btc as against conventional wire-transfer.
And nope, banks wont use these kind of apps for a simple reason - they charge a premium/commission for the options and forward swaps. If banks do accept btc in future, they would rather sell options/swaps than use such apps.
I know about options and swaps. That is one way of protecting against volatility.
Regarding banks not using btc. Search for a whitepaper by JP Morgan Chase.
They published a white paper with the methodology exactly similar to bitcoin (but never mentioned bitcoin in their whitepaper).
They plan to come up with their own algo and probably a different coin which is closed loop and available within the chase bank networks.
They have even applied for a patent for this in USA as well. If you see, chase is the intermediary bank for almost all the wire transfers originating from USA and this number is huge so why not use bitcoin like system rather than the old wire transfer system and even charge customers for it.
They will make more money by reducing their costs while they still charge customers. Customers need not know that they are using crypto behind the scenes (similar to this wallet) because customers always see their balance in fiat. And since they will have their own method and used within their bank networks (which i presume they will come up with their own coin) there is no question of volatility. They might even fix a rate like 1 Chase coin = 1 USD.
Source :
http://gettoknowbitcoin.com/chase-ing-bitcoin-is-jpm-preparing-to-unveil-its-own-electronic-currency/
http://www.itnews.com.au/News/367188,jpmorgan-patents-bitcoin-like-payments-system.aspx
Link to Patent : http://appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=1&f=G&l=50&co1=AND&d=PG01&s1=20130317984&OS=20130317984&RS=20130317984
January 10, 2014, 01:26:58 AM
Very similar to what monetas are doing. 
January 09, 2014, 11:54:29 PM
Um, nope it doesn't protect against the volatility of btc. While it might protect you from loosing money if and when the price crashes. It will loose money when btc appreciates from the holding price. When you re-convert you loose btc in such cases.
That is what i meant. This cannot be treated as investment. What i meant was you will not lose fiat value if the btc rates went down.
That kind of fluctuation is everywhere when you convert one currency to other. take USD to INR and vice versa.
In 2008, 1 USD was worth Rs 44.00 INR. But later USD appreciated and today 1 USD is worth Rs 62.00
I can see a day when banks and other financial institutions using these kinds of apps to do a money transfer across the world.
I feel this might one day replace wire transfer with some additional modifications.
Banks always love fiat and they would love to hold their balance in fiat as against btc for all the compliance purposes.
At the same time, money transfer becomes so much easier and less costlier when they do it through btc as against conventional wire-transfer.
And nope, banks wont use these kind of apps for a simple reason - they charge a premium/commission for the options and forward swaps. If banks do accept btc in future, they would rather sell options/swaps than use such apps.
January 09, 2014, 10:55:01 AM
Monetas are building on Open Transactions.
http://monetas.net/
Awesome stuff. It is the next level in crypto.
http://monetas.net/
Awesome stuff. It is the next level in crypto.
Sweet.
January 09, 2014, 10:19:36 AM
Monetas are building on Open Transactions.
http://monetas.net/
Awesome stuff. It is the next level in crypto.
http://monetas.net/
Awesome stuff. It is the next level in crypto.
January 09, 2014, 08:44:09 AM
Very interesting model. But is this not a distant cousin of fractional banking?
You will still lose Bitcoins if BTC value goes up against the Euro.
This may make sense as a processor rather than a store of value.
Very similar to what monetas are doing.
You will still lose Bitcoins if BTC value goes up against the Euro.
This may make sense as a processor rather than a store of value.
Very similar to what monetas are doing.
Yes. I agree. Am sure of monetas though. What do they do.?
Um, nope it doesn't protect against the volatility of btc. While it might protect you from loosing money if and when the price crashes. It will loose money when btc appreciates from the holding price. When you re-convert you loose btc in such cases.
That is what i meant. This cannot be treated as investment. What i meant was you will not lose fiat value if the btc rates went down.
That kind of fluctuation is everywhere when you convert one currency to other. take USD to INR and vice versa.
In 2008, 1 USD was worth Rs 44.00 INR. But later USD appreciated and today 1 USD is worth Rs 62.00
I can see a day when banks and other financial institutions using these kinds of apps to do a money transfer across the world.
I feel this might one day replace wire transfer with some additional modifications.
Banks always love fiat and they would love to hold their balance in fiat as against btc for all the compliance purposes.
At the same time, money transfer becomes so much easier and less costlier when they do it through btc as against conventional wire-transfer.
January 09, 2014, 05:51:43 AM
Um, nope it doesn't protect against the volatility of btc. While it might protect you from loosing money if and when the price crashes. It will loose money when btc appreciates from the holding price. When you re-convert you loose btc in such cases.
January 08, 2014, 11:27:22 PM
Very interesting model. But is this not a distant cousin of fractional banking?
You will still lose Bitcoins if BTC value goes up against the Euro.
This may make sense as a processor rather than a store of value.
Very similar to what monetas are doing.
You will still lose Bitcoins if BTC value goes up against the Euro.
This may make sense as a processor rather than a store of value.
Very similar to what monetas are doing.
January 08, 2014, 03:39:01 PM
I came across this wallet which is quite different from others (atleast the ones i know).
What it does is whenever you send or receive btc's, it converts it to fiat and holds the appropriate amount of fiat (Euro) in your wallet.
When you try to send, it app converts the amount to btc at the prevalent rates and sends it to the recipient.
I feel this is good for 1 reasons:
1) If there is a huge crash, you won;t end up losing money in your wallet. This can help people to laymen to adopt into bitcoins who always cry about volatility. You can take advantage of the benefits of bitcoin like instant transfer, less transaction fee etc. However, this is not a good wallet for making money by holding either.
2) Government Regulation : I somehow feel, by doing so this might get approval from regulators as the wallet is held in fiat rather than bitcoin. Only the process of fund transfer happens in bitcoin similar to wire transfer however in this case we need not pay intermediary bank fee and other allied bank fees and the best part is it is instantaneous.
https://www.bridgewalkerapp.com/
What it does is whenever you send or receive btc's, it converts it to fiat and holds the appropriate amount of fiat (Euro) in your wallet.
When you try to send, it app converts the amount to btc at the prevalent rates and sends it to the recipient.
I feel this is good for 1 reasons:
1) If there is a huge crash, you won;t end up losing money in your wallet. This can help people to laymen to adopt into bitcoins who always cry about volatility. You can take advantage of the benefits of bitcoin like instant transfer, less transaction fee etc. However, this is not a good wallet for making money by holding either.
2) Government Regulation : I somehow feel, by doing so this might get approval from regulators as the wallet is held in fiat rather than bitcoin. Only the process of fund transfer happens in bitcoin similar to wire transfer however in this case we need not pay intermediary bank fee and other allied bank fees and the best part is it is instantaneous.
https://www.bridgewalkerapp.com/
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