As long as we all keep on HODLing our coins for the profit we get in fiat, there is a need of safe storing. Bitcoin at itself does not need to be hold very long, unless you are saving up for buying a house or something expensive. A simple safe deposit for your cold wallet should do. There is a place to be filled there, banks could step in and provide. But a non central and governed entity would be best, but those are hard to trust at the moment, but look where the trust in banks and governments has gotten us.
But how do you spend those IOU's? Should we create a fake coin that has no value or backup? Should we go back to centralising this fake coin to facilitate our spending needs of our decentralised bitcoin? Should we even use bitcoin and invest in it? I think this idea is one we should all stay away from. Not good for the economy, not good for the bitcoin, not good at all.
Topic: Could bitcoin IOUs replace actual bitcoins? (Read 1146 times)
legendary
Activity: 1302
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Core dev leaves me neg feedback #abuse #political
What makes sense to me is bitcoin banks can store your coins but every depositor has their own address they can watch.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
If you have 2 similar banks / companies - one ready to pay interest on your deposits, and the other where you have to pay a fee to store your bitcoins, which would you prefer? The majority would choose to receive interest. Fractional Reserve banking can't be wished away that easily.
good point but many will take the security of provable reserves. then again, many will be happiest storing the private keys themselves. at least fractional reserve isn't the only option anymore.
What makes sense to me is bitcoin banks can store your coins but every depositor has their own address they can watch.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
If you have 2 similar banks / companies - one ready to pay interest on your deposits, and the other where you have to pay a fee to store your bitcoins, which would you prefer? The majority would choose to receive interest. Fractional Reserve banking can't be wished away that easily.
Is it really difficult to handling a string of two-hundred-fifty-six 0 and 1s? Cast 3 dices 33 times then you have the most secure private key in the world
Currently the address calculation part is still tricky (without address you can not send bitcoin into that perfect key) , once there is a simple way to do that part, average people should be able to understand the whole process without rely on any third party services
Currently the address calculation part is still tricky (without address you can not send bitcoin into that perfect key) , once there is a simple way to do that part, average people should be able to understand the whole process without rely on any third party services
Nice business idea: convince 1,000 people to give you cash and you give them back BTC IOUs. After a while, you just disappear with the cash.
This seems just like what a lot of exchanges did, and are maybe doing.
With multisig and checklocktimeverify or the lightning network we could create temporary and verifiable IOU's where fractional reserve isn't possible.
This is the exact opposite of what Bitcoin is doing 
Nice business idea: convince 1,000 people to give you cash and you give them back BTC IOUs. After a while, you just disappear with the cash.
legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
Cash is a kind of IOU. When you accept IOU instead of the real thing, you will have the fractional reserve problem again. Bitcoin will be easier to use in the future. I think some sort of NFC bitcoin payment system will be available soon.
you're right.
until Bitcoin it wasnt possible to PREVENT fractional reserve, as how do you prove you have the real asset?
Now with bitcoin you can prevent it if desired.
Cash is a kind of IOU. When you accept IOU instead of the real thing, you will have the fractional reserve problem again. Bitcoin will be easier to use in the future. I think some sort of NFC bitcoin payment system will be available soon.
I think there probably will be fractional reserve banking in place with bitcoin, there is also leveraged trading with bitcoin now.
In a perfect world, there wouldn't be any more than the number of mined bitcoins available to spend, but it isn't a perfect world unfortunately.
In a perfect world, there wouldn't be any more than the number of mined bitcoins available to spend, but it isn't a perfect world unfortunately.
However, the implementation of this would be very difficult. This requires huge trust, since the central authority who is storing the coins isn't decentralized. However, if all the addresses containing the coins are publicized, it allows for a lot of transparency to make sure every IOU is backed up.
It is a very good idea, but the huge difficulty is at its implementation.
It is a very good idea, but the huge difficulty is at its implementation.
What is needed is hardware that can be trusted (which no government is keen to support).
So far this has proven to be rather tricky as problems with things like the Trezor project have already been found (there is a topic about how Trezor can be hacked somewhere on this forum).
IMO most people *are* going to trust a bank or similar to hold their BTC for them because if they are insured then that would currently be the least risky way to protect your investment (the fractional reserve problem is another one that perhaps stems from this).
So far this has proven to be rather tricky as problems with things like the Trezor project have already been found (there is a topic about how Trezor can be hacked somewhere on this forum).
IMO most people *are* going to trust a bank or similar to hold their BTC for them because if they are insured then that would currently be the least risky way to protect your investment (the fractional reserve problem is another one that perhaps stems from this).
legendary
Activity: 1302
Merit: 1008
Core dev leaves me neg feedback #abuse #political
What makes sense to me is bitcoin banks can store your coins but every depositor has their own address they can watch.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
the funds are insured and you pay a small maintanence fee for the account. This kind of system would
eliminate all the fractional reserve BS, and once one solid company provided it, nothing less would be
considered acceptable. So that's where I think the future is.
Of course some people will want to store some or all of their own coins and that's fine too.
This happens all the time with hot wallets or storing your bitcoins on exchanges.
Always a risk and concern.
Always a risk and concern.
In a way that sounds similar like a bitcoin bank which will manage the security, transferring, payment including maintenance on your behalf. If your concern is about groups of people having little or poor knowledge about computer security, I think that would be the way to go about trying to overcome the problem.
Yeah something like that.
And before you know fractional reserve appears - once again - to make things "beautiful"
In a way that sounds similar like a bitcoin bank which will manage the security, transferring, payment including maintenance on your behalf. If your concern is about groups of people having little or poor knowledge about computer security, I think that would be the way to go about trying to overcome the problem.
I had considered this as a way of buying bitcoins with credit cards.
You go to the site, you buy your bitcoins with your credit card. But because a purchase can be reversed up to 180 days you would not actually get bitcoins, you would get a token that represents a bitcoin until it "matures" after 180 days. At that point actual bitcoins replace your token.
People could trade these tokens if they wanted to and would likely sell for less than their value before they mature.
Why would anyone do this? Bitcoin drops 20-30% in a few hours and you believe it will bounce back. You don't have any money on any exchange, you don't have any money in your bank account but you have a credit card with a high limit. You buy knowing that in 180 days you can sell those coins or use them at a higher value.
You go to the site, you buy your bitcoins with your credit card. But because a purchase can be reversed up to 180 days you would not actually get bitcoins, you would get a token that represents a bitcoin until it "matures" after 180 days. At that point actual bitcoins replace your token.
People could trade these tokens if they wanted to and would likely sell for less than their value before they mature.
Why would anyone do this? Bitcoin drops 20-30% in a few hours and you believe it will bounce back. You don't have any money on any exchange, you don't have any money in your bank account but you have a credit card with a high limit. You buy knowing that in 180 days you can sell those coins or use them at a higher value.
Ripple?
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