BitCoin Bank - page 4. | Bitcointalksearch.org

tomcollins

full member

Activity: 182

Merit: 101

Quote from: Pixie on May 18, 2011, 01:44:20 PM

Each bank will have its own risk assessment... reputation, a current account and other details are likely to be the minimum for a loan.

Its no different from the current banking/loan system, Can you prove you are working? Do you have a bad credit history? Have you lived at your current location for several years? Can you show ID?

No loan is going to be given anonymously, as a standard business I can profile a customer quite well based on digital information. As banks grow this profile will likely get better as well.

I'd also expect credit rating agency to appear to track bad credit just as they do now.

Some loans will go bad of course, but that risk factor goes into everybody loans interests rates.

It's much different than the current system. If I default on my car loan, they take my car. If I default on my mortgage, they take my house. If I default on my credit card, they come after me for it and can win a judgment against me.

Pixie

newbie

Activity: 17

Merit: 0

Each bank will have its own risk assessment... reputation, a current account and other details are likely to be the minimum for a loan.

Its no different from the current banking/loan system, Can you prove you are working? Do you have a bad credit history? Have you lived at your current location for several years? Can you show ID?

No loan is going to be given anonymously, as a standard business I can profile a customer quite well based on digital information. As banks grow this profile will likely get better as well.

I'd also expect credit rating agency to appear to track bad credit just as they do now.

Some loans will go bad of course, but that risk factor goes into everybody loans interests rates.

Nesetalis

sr. member

Activity: 420

Merit: 250

i meant its less important due to the the distribution of bitcoin users.. only a certain few could use that bank regularly...
Its hard to say if a bank would want to do buisness with an individual in another country.. the inter-country laws are sticky. but for the moment lets assume that each country gets its own bitcoin bank (or 30)... which i think would be the most awesome thing ever mind you Tongue

this would probably be a good model..
however, i was under the impression people were starting banks as external entities as bitcoins are.

tomcollins

full member

Activity: 182

Merit: 101

Quote from: Alex Beckenham on May 18, 2011, 12:20:42 PM

Quote from: Nesetalis on May 18, 2011, 12:10:12 PM

if its not an international bank, then its of less importance..

Perhaps, but an Australian bitcoin bank could still be mighty handy for Australians, regardless of whether or not other countries have them too.

And the banks could do business with each other based on reputation.

Alex Beckenham

full member

Activity: 154

Merit: 100

Quote from: Nesetalis on May 18, 2011, 12:10:12 PM

if its not an international bank, then its of less importance..

Perhaps, but an Australian bitcoin bank could still be mighty handy for Australians, regardless of whether or not other countries have them too.

Nesetalis

sr. member

Activity: 420

Merit: 250

if its not an international bank, then its of less importance..
if it is an international bank... then they are going to have alot of hurdles to overcome.

Alex Beckenham

full member

Activity: 154

Merit: 100

Quote from: Nesetalis on May 18, 2011, 11:47:24 AM

seeing that bitcoin is international... using an existing legal system is going to be a severe pain in the ass...
and reputation is hardly a danger for many people, new name, new face... the internet is anonymous.. and bitcoin is semi-anonymous.

Just because bitcoin is 'anonymous' doesn't mean the institutions that utilise it need to be.

You could set up a bank exactly like any other cash bank is set up now... domestically.

Why does a bitcoin bank have to automatically be international?

For security you could put up title to your house or land, just like when people take out loans for fiat.

Nesetalis

sr. member

Activity: 420

Merit: 250

seeing that bitcoin is international... using an existing legal system is going to be a severe pain in the ass...
and reputation is hardly a danger for many people, new name, new face... the internet is anonymous.. and bitcoin is semi-anonymous.

tomcollins

full member

Activity: 182

Merit: 101

Quote from: Nesetalis on May 18, 2011, 11:32:13 AM

exactly, and what is a bitcoin bank going to use as collateral?

There's no reason to think this couldn't be done with the existing legal system. Reputation is also collateral in some respect (or could be). If you don't pay your debt, your reputation is smeared and no one will do business with you.

Nesetalis

sr. member

Activity: 420

Merit: 250

exactly, and what is a bitcoin bank going to use as collateral?

speeder

hero member

Activity: 966

Merit: 501

PredX - AI-Powered Prediction Market

Quote from: Nesetalis on May 18, 2011, 10:05:29 AM

has anyone asked the question yet... how do you enforce a loan?
say i put in bogus information.. i'm anonymous.. i take out a 10btc loan... then I go and decided to forget that account, email, whatever... suddenly you have no way to force me to pay back 10BTC.... even if you had my information, going to court for it would be really really tough.

This is why ancient banks based on gold asked for guarantees (ie: stuff you do not need right now, but that are valuable, like cars, jewels, etc...)

vuce

sr. member

Activity: 476

Merit: 250

Quote from: Nesetalis on May 18, 2011, 10:05:29 AM

has anyone asked the question yet... how do you enforce a loan?
say i put in bogus information.. i'm anonymous.. i take out a 10btc loan... then I go and decided to forget that account, email, whatever... suddenly you have no way to force me to pay back 10BTC.... even if you had my information, going to court for it would be really really tough.

That's why i think bitcoin bank will never work...

Nesetalis

sr. member

Activity: 420

Merit: 250

has anyone asked the question yet... how do you enforce a loan?
say i put in bogus information.. i'm anonymous.. i take out a 10btc loan... then I go and decided to forget that account, email, whatever... suddenly you have no way to force me to pay back 10BTC.... even if you had my information, going to court for it would be really really tough.

caston

hero member

Activity: 756

Merit: 500

A portion of the fiat loan could also be used to buy more bitcoins and as those coins increase in value they then can be used to pay back the loan. E.g. you may borrow 100k and you use 80k to buy a house
and 20k to buy bitcoins. You reduce each monthly payment but are then liable for a balloon. When your balloon is due you sell your bitcoins to pay off the balloon and and use the remainder for anything you like. e.g. go on holiday, take a sabbatical, start a new company, get married and start a family or so on.

Pixie

newbie

Activity: 17

Merit: 0

Quote from: caston on May 18, 2011, 06:21:53 AM

You could possibly use a bitcoin deposit for a fiat money loan. If the bank needs to make a margin call or you late with a payment they have the option of dipping into your deposit. Once the loan is paid off you get your bitcoins back or you can take out another loan.

I see this as part of the risk assessment, this is the closest we can probably get at the moment to a security. If U are willing to put some of you money upfront as a security its clearly reduces the risk, its possible to think of other securities but the lack of physical accountability obvious cuts any many of the more traditional ones.

Another way to lower risk would be to have a current account which demonstrates a good constant flow of bitcoins.

caston

hero member

Activity: 756

Merit: 500

You could possibly use a bitcoin deposit for a fiat money loan. If the bank needs to make a margin call or you late with a payment they have the option of dipping into your deposit. Once the loan is paid off you get your bitcoins back or you can take out another loan.

Pixie

newbie

Activity: 17

Merit: 0

Quote from: HolyMoly on May 18, 2011, 05:37:46 AM

The banking part of bitcoins sounds interesting but I am new to this so I can only speculate, sorry if any of this sounds really dumb but I am learning about this and its going to help to think this through...

It looks like there is no rule of law so perhaps its going to be very difficult to do something like loans. The bank right now shouldn't be much more than accepting deposits and charging a security fee to the depositor. People are scared anyway of something happening to their computer, like a virus or whatever, so perhaps there is a way to alleviate that fear. Good old fashioned bitcoin safe deposit box.

Deposit security box is the first thing a bank would do imho, partly to establish trust and confidence in the bank (obviously being a registered business is required but until we have outside auditors of the banks, they have to earn their trust with potential customers.

I do think loans are viable just different from conventional banks. Much closer to the old traditional loan system,

I as the banker have N deposits of bitcoins (my load reserve)
U wants of loan of M bitcoins (M <= N)
U have to provide I with reason to I to loan you the cash, currently that would likely by the existing otp trust system.
If I think your trust worthy I calculate a interest rate on that risk, I loan you that money and you pay a portion of the loan + interest each month.
U default, I did my risk calculation wrong and take the lose.
U are a good customer, U get the loan, I earn interest and your risk ratio (and therefore interest) get better.

HolyMoly

newbie

Activity: 2

Merit: 0

The banking part of bitcoins sounds interesting but I am new to this so I can only speculate, sorry if any of this sounds really dumb but I am learning about this and its going to help to think this through...

It looks like there is no rule of law so perhaps its going to be very difficult to do something like loans. The bank right now shouldn't be much more than accepting deposits and charging a security fee to the depositor. People are scared anyway of something happening to their computer, like a virus or whatever, so perhaps there is a way to alleviate that fear. Good old fashioned bitcoin safe deposit box.

davout

legendary

Activity: 1372

Merit: 1007

1davout

Quote from: Pixie on May 18, 2011, 05:04:01 AM

Finding a banking method that works both for the consumer and the bank is tricky which is why I'm asking what others think.

IMO lending for interest can work in a sustainable way with a deflationary currency.

Pixie

newbie

Activity: 17

Merit: 0

Quote from: Alex Beckenham on May 18, 2011, 04:54:31 AM

Quote from: Pixie on May 18, 2011, 04:49:07 AM

Saving separate from Loan/investment : Any savings/investment are in a separate reserve which is protected and paid back in case of collapse (no risk to savers)

What would be the point of paying interest on people's savings, if you can't use their deposits to earn interest yourself (via lending)?

Indeed which is why I suggested underneath an agreed fixed amount of saving for investment perhaps as a system to allow interest. Or prehaps not paying interest, instead taking a small fee monthly for the service of keeping it safe, quick access etc.

Finding a banking method that works both for the consumer and the bank is tricky which is why I'm asking what others think.

Topic: BitCoin Bank - page 4. (Read 10005 times)