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    Author Topic: What bitcoin needs is mainstream-like banking institutions  (Read 1347 times)

    • pretendo (OP)
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    March 04, 2013, 09:22:52 PM
     #1
    Before you plot on murdering me and deleting my posts, I'm not talking about the fiat quasi-government banking that we are used to. I am talking about accountable institutions that can manage the currency for people in a way that people rely on.
    http://en.wikipedia.org/wiki/Free_banking

    If bitcoin is ever going to crawl out of the hole that is illegal activity and geekdom, it will need mass adoption. This does not mean the number of adopters, but how deep these people use bitcoin.

    Just like people don't keep all of their money in 100 dollar bills in a safe in their home, do you think the average person is going to be able to psychologically deal with having $30,000 of their savings on some linux partition of a computer? This just is not feasible for basically everyone. Even the nerdiest nerds won't do this, the ones that can actually competently deal with the security ramifications.

    Consistent accessibility and payment is what bitcoin needs for people to deeply invest and adopt it. I feel as though there is a "banking is evil" sentiment in this community, which makes sense concerning some aspects of today's system, but not about the concept of banking in general.

  • DarkBet
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    March 04, 2013, 10:55:09 PM
     #2
    Quote from: pretendo on March 04, 2013, 09:22:52 PM
    Before you plot on murdering me and deleting my posts, I'm not talking about the fiat quasi-government banking that we are used to. I am talking about accountable institutions that can manage the currency for people in a way that people rely on.
    http://en.wikipedia.org/wiki/Free_banking

    If bitcoin is ever going to crawl out of the hole that is illegal activity and geekdom, it will need mass adoption. This does not mean the number of adopters, but how deep these people use bitcoin.

    Just like people don't keep all of their money in 100 dollar bills in a safe in their home, do you think the average person is going to be able to psychologically deal with having $30,000 of their savings on some linux partition of a computer? This just is not feasible for basically everyone. Even the nerdiest nerds won't do this, the ones that can actually competently deal with the security ramifications.

    Consistent accessibility and payment is what bitcoin needs for people to deeply invest and adopt it. I feel as though there is a "banking is evil" sentiment in this community, which makes sense concerning some aspects of today's system, but not about the concept of banking in general.

    I agree.

    Imagine if some banks adopted Bitcoin and allowed users to exchange usd to Bitcoin easily and even recommended Bitcoin for internet purchases. Maybe one day in the distant future Smiley

    If this doesn't happen im convinced there will be pop up some pure internet banks alla neteller that function as any normal banks with added Bitcoin functionality. It would be profitable and imagine some "insurance" type of thing, would make new people way more inclined to buy and store Bitcoins without feeling like its "unsafe" or that they need to understand how everything works

  • Snowfire
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    March 05, 2013, 01:53:40 AM
     #3
    It may be that Bitstamp is trying to be what you describe.
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  • Monster Tent
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    March 05, 2013, 01:56:44 AM
     #4
    Mt Gox recently made a deal with coinbase to transfer all USD to the US so that eventually deposits might become insured by lloyds of london.
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  • Mike Christ
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    March 05, 2013, 02:00:40 AM
     #5
    You have a point, especially considering all the coins that have been lost due to some malfunction or hacker or whatever.  People who don't want to worry about wallet security (at least, security of funds over 100$) will definitely want a bank to handle their funds.

    I actually use a credit union for my fiat; maybe something like that would be good for BTC?
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  • zoinky
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    March 05, 2013, 02:13:41 AM
     #6
    So like a Bitcoin Savings & Trust?

  • DarkBet
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    March 05, 2013, 03:34:29 AM
     #7
    Quote from: zoinky on March 05, 2013, 02:13:41 AM
    So like a Bitcoin Savings & Trust?

    Hehe, I see what you did there Wink

    Well something like that but legit

  • yucca
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    March 05, 2013, 04:28:09 AM
     #8
    I think it will happen in time.

    In time users will walk around and treat a bitcoin card just the same as they do a visa card with a third party (bank) managing the coins.

    As you say this will be prefered by the masses.

    Of course this requires trust in the third party.

    And inevitably the new BTC bank will start loaning BTC out at interest. Loaning the clients BTC out. So back to fractional reserve banking where if every client wants delivery of their BTC then it's a run on the bank. The fractional reserve ratios would increase over time as they always do until joe public could stomach no more.

    It's still better than fiat and fractional reserve though.

    I think a better solution is some very easy to use hardware wallet that is super secure and super easy to use. Don't ask me how exactly   HuhCheesy
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  • Nemesis
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    March 05, 2013, 10:27:36 AM
     #9
    Quote from: Monster Tent on March 05, 2013, 01:56:44 AM
    Mt Gox recently made a deal with coinbase to transfer all USD to the US so that eventually deposits might become insured by lloyds of london.

    Its COINLAB

  • saddambitcoin
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    March 05, 2013, 09:47:07 PM
     #10
    Perhaps not a bank but a very secure data storage service is needed for the future...utilizing multi signature addresses to store funds.

    Perhaps when more people learn about how bitcoin works they will be inspired to take more responsibility for their money. 
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  • Melbustus
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    March 05, 2013, 11:56:33 PM
     #11
    Yup, CoinLab's deal with MtGox is the first step in their stated goal of bringing banking, or more generally, professional asset management to bitcoin. I believe they're specifically talking about robust and transparent security methods, auditing, insurance, regulatory compliance, and more integration into existing banking systems; all with the goal of giving non-geek high-net-worth individuals and institutional investors the confidence they need to hold bitcoin as an investment. http://coinlab.com/storage

    A number of people in the community have expressed various concerns with this development (specifically integrating more into the existing banking infrastructure, with AML, KYC, etc...), but I think that if bitcoin continues to grow, these developments are both inevitable and ultimately positive.
    Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.

  • potato5491
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    March 06, 2013, 12:27:14 AM
     #12
    Quote from: pretendo on March 04, 2013, 09:22:52 PM
    Just like people don't keep all of their money in 100 dollar bills in a safe in their home, do you think the average person is going to be able to psychologically deal with having $30,000 of their savings on some linux partition of a computer? This just is not feasible for basically everyone. Even the nerdiest nerds won't do this, the ones that can actually competently deal with the security ramifications.

    I agree with this, but where are the trusted organisations going to come from?

    Quote from: pretendo on March 04, 2013, 09:22:52 PM
    If bitcoin is ever going to crawl out of the hole that is illegal activity and geekdom, it will need mass adoption.

    I don't agree with this. Why is bitcoin in a hole of illegal activity? It is in the same place as all other currencies - criminals will always use money. Is it easier for your average criminal to launder their drug money through local merchants and banks or by taking geek classes until they can use bit coin?

  • gradient vector
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    March 06, 2013, 12:58:35 AM
     #13
    Quote from: pretendo on March 04, 2013, 09:22:52 PM
    Before you plot on murdering me and deleting my posts, I'm not talking about the fiat quasi-government banking that we are used to. I am talking about accountable institutions that can manage the currency for people in a way that people rely on.
    http://en.wikipedia.org/wiki/Free_banking

    If bitcoin is ever going to crawl out of the hole that is illegal activity and geekdom, it will need mass adoption. This does not mean the number of adopters, but how deep these people use bitcoin.

    Just like people don't keep all of their money in 100 dollar bills in a safe in their home, do you think the average person is going to be able to psychologically deal with having $30,000 of their savings on some linux partition of a computer? This just is not feasible for basically everyone. Even the nerdiest nerds won't do this, the ones that can actually competently deal with the security ramifications.

    Consistent accessibility and payment is what bitcoin needs for people to deeply invest and adopt it. I feel as though there is a "banking is evil" sentiment in this community, which makes sense concerning some aspects of today's system, but not about the concept of banking in general.

    I'm not sure if bank-like institutions are the key but I do think there is a need for accessibility. There are ways to increase accessibility without banks. A local bitcoin trader can link to a mt.gox account and make a market in bitcoin while charging a slighter higher margin. Bitcoin Atms will also work.

  • pretendo (OP)
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    March 06, 2013, 05:46:34 AM
     #14
    Why are people against banks? Just institutions legally obligated to honor their contracts to manage your coins
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