Topic: Banks- Correct me if I'm wrong. (Read 1315 times)

^ Bingo.

Personally, I'll store mine myself, but I have family members asking me to get them some Casascius coins because they consider that the best way for *them* to store bitcoin (eg, they are not computer people). And I agree - most people are not capable enough to properly store a non-trivial value of bitcoins themselves. A bank for securely storing bitcoin, that insures deposits against theft/loss, would be a great service.

no clever scheme entrusting a second party with your funds is needed. thats the beauty of bitcoin.

especially strangers you only know of online. If you want true security away from your residence and away from the banks the best way is to use a brain wallet.

EG "To my dearest daughter i leave you this note to ensure that after i am gone you will be left without financial worries. please follow these instructions....................."

add the instructions how to redeam the passphrased bitcoin address, seal the note and put it in your Last Will only to be viewed by you, or your next of kin (daughter in this case) should you die.

there are much cleverer ways like using the title to a song that you and your 'better half' or child knows well and will never forget. and using that as the key to your riches. hide it in a cryptic letter. or tell it to your better half on visiting day if your imprisoned for tax evasion.

paper/brain wallets are more secure then third parties that advertise banking services on a forum, promising security.

The need for a BTC Vault is the same need for Private Security Boxes nowadays. Precious metals, important documents, or money are safely stored away from immediate access by the owner. There's a demand for it. With the plus side of the bank not being able to open it and sneak inside.

I'd consider a BTC vault/bank for part of my coins, not all of it, if some criteria were met:

- Away from my immediate access;

- Away from bank's immediate access;

- Some clever scheme where we split a private key, or use a M-to-N transaction everytime I want to make a transfer from my savings account;

- The client cannot lose the client-key (or the coins become inaccessible), but several not so secured copies can be made since physical presence is required;

- The bank cannot lose its bank-key, also (reputation, insurance);

- Neither of the parts can move the funds alone. Just the client or heirs, in any physical branch of the bank; (client-key + bank-key released by physical presence = private key)

- If the bank loses the bank-key, the client can prove that still has the client-key with a signature, and the bank would be accounted (reputation);

- If the client loses his key, the bank can prove with a signature that still has the other part of the key, and can't be accounted for the mishappening. Possibility of insurance resides on the bank's ability to safeguard data. In a disaster scenario for the bank (database leak), the losses would be mitigated by orders of magnitude, since the attacker needs the keys of all the clients in order to transfer funds.

If bitcoin becomes too valuable maybe we will see some kind of this proposed scheme.

none..

bitcoins are never lost because they are always on the blockchain. They cannot be burnt, or damaged. It's just the stupidity to not backup the accesskey (privatekey) which makes people unable to access them. So banks are not required, just a few lessons about triple backing up the private key both digitally and on paper is all that people are required to protect their investments.

giving out coins to scammers is another lesson, but some people never learn that lesson. By them choosing to hand the funds over to a scammer whether the funds were first in a bank or in peoples personal wallet wont change anything. Bank insurance companies will simply say that the 'customer' did not do enough due diligence or it cannot be proved that the receiving address is not also property of the same customer trying to screw over an insurance claim, thus they ill never pay out. Many bank insurance services don't pay out/reimburse if the funds were taken with the customers consent, pin number or with the use of identifiable information (username and password) that only the customer should have but never disclosed.

How many bitcoins have been lost to house fires or other physical incidents ?

The only reason people use a bank is because their employer requires bank account details to pay in a salary and most utility companies take payment via bank transfer. If people were paid direct to their pocket (wallet) and the utility company or retailer accepted direct payment from someone wallet (pocket) then the need and desire for a bank would be negligible. Especially when the interest rates institutional banks offer is so small per year. So the only reason people would pay into a bank savings service is for the same reason people got duped into "bitcoin savings and loans", through promises of high regular interest payments.

Please understand bitcoin is YOUR money that YOU secure, saying that someone else needs to secure your money is absolutely absurd. Never give money to someone 'on trust' that you cannot grab hold of, if they decide to steal your funds. Unless they have a good reason to request your money. such as your unblinded trust or at least some provable legitimate business or product backing them.

If anyone is still tempted that a bank for bitcoin is a good thing then google Pirateat40 Pirate@40

Split the private keys of your saving's account with the bank. Requires physical presence to move funds to Hot Wallet. Nobody gets hurt.

Yes. +1
Insurance on deposits is a service they can provide.

While we have reputable sites like Coinbase.com that will store your Bitcoins for you, we truly need one with actual insurance in case of theft.

You can also mix the virtual and physical systems by storing your bitcoin wallet on an USB key, and putting that key in a safe deposit box in a private bank vault.

You don't need banks to store any of your money. Still, I think bitcoin storage will be big business for banks. I expect most people will leave management of their BTC to a bank at some point. If the price were low enough even I would buy my bitcoins from the bank, store them there, and use their phone app to spend them.

There's already a BTC vault, it's called Truecrypt

Yes, I believe that's right. For example I think this recent comment has a point:


Securing bitcoins properly is not the easiest thing in the world. That means a market probably exists for doing this reliably, and possibly even with insurance.

Hello everyone, I have developed the safest bitcoin vault ever conceived. Just send to 1BitcoinEaterAddressDontSendf59kuE and your BTC are guaranteed safe for the next trillion years!

Why would you need a btc bank, you can just hold the btc yourself? What benefit would they add?

There's nothing wrong with a bank, just banks connected to a federal reserve of some sort?

24/7 private vaults for example is a 100% anonymous bank. 

Why not develope a BTC vault?