Creating my own bitcoin bank | Bitcointalksearch.org

flower1024

legendary

Activity: 1428

Merit: 1000

Quote from: MPOE-PR on February 09, 2014, 02:10:56 PM

Quote from: James222 on February 08, 2014, 08:34:48 PM

Hi everyone. I'd like to launch my bitcoin bank. Basically, it would work like this:

Investor

|

| (1BTC)

|

Bank

|

| (1BTC)

|

Guy Who Wants A Loan

|

| (1BTC + Interest (10%)

|

Bank

|

| (1BTC + Interest (7%)

|

Investor

Any comments before I start designing the website?

A bank isn't something you start on a whim after drawing a doodle on a napkin, nor does starting it consist of "designing the website". If it's not immediately clear to you why citizen banking is a bad idea in general, I'd suggest paying the first person you can find who can draw a flow chart of themselves, your torso, and a scalpel to perform heart surgery on you; on the off-chance you survive, the recovery time'd make for good reconsidering.

+1
wow, this is the first time i totally agree with you and you've been (somewhat) nice!
just wow... continue that way and it may be that i even like you!

MPOE-PR

hero member

Activity: 756

Merit: 522

Quote from: James222 on February 08, 2014, 08:34:48 PM

Hi everyone. I'd like to launch my bitcoin bank. Basically, it would work like this:

Investor

|

| (1BTC)

|

Bank

|

| (1BTC)

|

Guy Who Wants A Loan

|

| (1BTC + Interest (10%)

|

Bank

|

| (1BTC + Interest (7%)

|

Investor

Any comments before I start designing the website?

A bank isn't something you start on a whim after drawing a doodle on a napkin, nor does starting it consist of "designing the website". If it's not immediately clear to you why citizen banking is a bad idea in general, I'd suggest paying the first person you can find who can draw a flow chart of themselves, your torso, and a scalpel to perform heart surgery on you; on the off-chance you survive, the recovery time'd make for good reconsidering.

James222

member

Activity: 98

Merit: 10

Wassup?

Quote from: Bitnicity on February 09, 2014, 03:00:30 AM

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

too naive kid, this only works when you run a btc exchange, where you could lend your coin to people who want to short the market and vice versa.

who in this world, would deposit 105btc to you in exchange for a 100 btc loan at a cost? they must lost their mind.

think more carefully about your business plan before launching it to the public.

*FACEPALM*

Collateral isn't provided in bitoins. It is usually provided in LTC or any valuable alt coins. And yes, most people give collateral that equals a bit more of the value of the loan

Buffer Overflow

legendary

Activity: 1652

Merit: 1016

Quote from: James222 on February 08, 2014, 08:34:48 PM

Any comments before I start designing the website?

Don't do it. Think of something else.

Bitnicity

newbie

Activity: 56

Merit: 0

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

too naive kid, this only works when you run a btc exchange, where you could lend your coin to people who want to short the market and vice versa.

who in this world, would deposit 105btc to you in exchange for a 100 btc loan at a cost? they must lost their mind.

think more carefully about your business plan before launching it to the public.

flower1024

legendary

Activity: 1428

Merit: 1000

Quote from: Cluster2k on February 08, 2014, 09:22:31 PM

Anyone who takes an interest bearing loan in bitcoins is either stupid or is intending to default. Due to rising difficulty it's always becoming harder to create more bitcoins. Where does the person who got the 1 BTC loan get the 10% interest from? They have to work really hard to get it. In a scenario where difficulty skyrockets due to BFL getting their Monarchs online and other ASIC hardware, it may become extremely difficult to get enough BTC to pay the interest.

What if the debtor is running a shop and trades their way to a profit and can pay off the interest? You have the same problem. Prices in BTC terms are constantly falling for pretty much everything. Have a look at what mining hardware cost a year ago, and what it costs now.

Paying off interest in a currency that's inflating is easy. Paying off interest in a deflationary currency is economic suicide.

see bitfinex for a working btc loan market. difficulty will not always rise (and did not in bitcoins history btw there where times when it got down a little)

the only reason for a btc loan i can imagine is that somebody wants to go short (which is valid).

i found that 105% colleteral quite amusing: if the price goes up by more than 5% you'll loose (and op still didnt answer who suffers the loss: bank or customer?)

also: does the colleteral have to be transferred to the bank before the loan? otherwise it could be cheated.

Cluster2k

legendary

Activity: 1692

Merit: 1018

Anyone who takes an interest bearing loan in bitcoins is either stupid or is intending to default. Due to rising difficulty it's always becoming harder to create more bitcoins. Where does the person who got the 1 BTC loan get the 10% interest from? They have to work really hard to get it. In a scenario where difficulty skyrockets due to BFL getting their Monarchs online and other ASIC hardware, it may become extremely difficult to get enough BTC to pay the interest.

What if the debtor is running a shop and trades their way to a profit and can pay off the interest? You have the same problem. Prices in BTC terms are constantly falling for pretty much everything. Have a look at what mining hardware cost a year ago, and what it costs now.

Paying off interest in a currency that's inflating is easy. Paying off interest in a deflationary currency is economic suicide.

KWH

legendary

Activity: 1904

Merit: 1045

In Collateral I Trust.

Quote from: James222 on February 08, 2014, 08:58:39 PM

Quote from: KWH on February 08, 2014, 08:54:33 PM

Quote from: James222 on February 08, 2014, 08:50:08 PM

Quote from: KWH on February 08, 2014, 08:46:33 PM

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

Keep answering the questions........

By default you mean that if I just run away with the money? I presume so. Well I don't have much to say about why you should trust me. I'm hoping to find investors. After a successfull loan, I hope to get people's trust.

Oversight?

I can list many more reasons why this is a terrible idea but you only need to read the Scam section. I suggest you do that before you start a website.
For starters, an unknown holding collateral AND the loan.
Unknown holding funding for said bank.
Finding investors for an unknown for said bank.
This idea isn't a new one and has been tried many times.

I don't see why that would be a terrible idea. Get away your scamming ideas and then write me a list of why this would be bad. I'm gonna go check this post

I've already started quite a list in 2 posts. You could also get into legal trouble as well. Look for coinlenders in the scam section or do a search.

James222

member

Activity: 98

Merit: 10

Wassup?

Quote from: KWH on February 08, 2014, 08:54:33 PM

Quote from: James222 on February 08, 2014, 08:50:08 PM

Quote from: KWH on February 08, 2014, 08:46:33 PM

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

Keep answering the questions........

By default you mean that if I just run away with the money? I presume so. Well I don't have much to say about why you should trust me. I'm hoping to find investors. After a successfull loan, I hope to get people's trust.

Oversight?

I can list many more reasons why this is a terrible idea but you only need to read the Scam section. I suggest you do that before you start a website.
For starters, an unknown holding collateral AND the loan.
Unknown holding funding for said bank.
Finding investors for an unknown for said bank.
This idea isn't a new one and has been tried many times.

I don't see why that would be a terrible idea. Get away your scamming ideas and then write me a list of why this would be bad. I'm gonna go check this post

KWH

legendary

Activity: 1904

Merit: 1045

In Collateral I Trust.

Quote from: James222 on February 08, 2014, 08:50:08 PM

Quote from: KWH on February 08, 2014, 08:46:33 PM

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

Keep answering the questions........

By default you mean that if I just run away with the money? I presume so. Well I don't have much to say about why you should trust me. I'm hoping to find investors. After a successfull loan, I hope to get people's trust.

Oversight?

I can list many more reasons why this is a terrible idea but you only need to read the Scam section. I suggest you do that before you start a website.
For starters, an unknown holding collateral AND the loan.
Unknown holding funding for said bank.
Finding investors for an unknown for said bank.
This idea isn't a new one and has been tried many times.

James222

member

Activity: 98

Merit: 10

Wassup?

Quote from: KWH on February 08, 2014, 08:46:33 PM

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

Keep answering the questions........

By default you mean that if I just run away with the money? I presume so. Well I don't have much to say about why you should trust me. I'm hoping to find investors. After a successfull loan, I hope to get people's trust.

Oversight?

KWH

legendary

Activity: 1904

Merit: 1045

In Collateral I Trust.

Quote from: James222 on February 08, 2014, 08:45:12 PM

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

Keep answering the questions........

James222

member

Activity: 98

Merit: 10

Wassup?

Quote from: KWH on February 08, 2014, 08:40:47 PM

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

I would only loan with collateral that equals to 105% of loan.

KWH

legendary

Activity: 1904

Merit: 1045

In Collateral I Trust.

Guarantees? Assets? Who will get the ass whipping if you default? Oversight? Full DOX? Collateral? Then all the legal questions...........

flower1024

legendary

Activity: 1428

Merit: 1000

how do you handle defaults?
who suffers from a default?

James222

member

Activity: 98

Merit: 10

Wassup?

Hi everyone. I'd like to launch my bitcoin bank. Basically, it would work like this:

Investor

|

| (1BTC)

|

Bank

|

| (1BTC)

|

Guy Who Wants A Loan

|

| (1BTC + Interest (10%)

|

Bank

|

| (1BTC + Interest (7%)

|

Investor

Any comments before I start designing the website?

Topic: Creating my own bitcoin bank (Read 1449 times)