I'm going to vote total scam. They have nothing to invest the bitcoins into to get you interest. Selling them for another currency (in an attempt to create interest) would be too risky. I don't see how they can do what they say. I could be wrong.

I thought about doing something like this myself but with loans to, you cant expect people to give you there btc without giving them a chance to trust you.

Guys, there is a simple legit way to generate interest on Bitcoin without risk: borrowing it for shorting.

The bank borrows 100 BTC to some party for a month for 3 BTC. It gives 2.5 BTC to the person depositing the BTC and keeps 0.5 BTC as fee.

Sombody wants to short BTC. It borrows 100 BTC, paying 3 BTC for this privilege to the bank. It sells the 100 BTC. One month later it buys the BTC back (hopefully for a lower price) and gives it back to the bank. The profit covers the commission.

The central banks do this with gold for example, earning interest with zero risk. This assumes no counter-party risk, but this is what contracts are for. Of course, in Bitcoin world everything flies, no contracts needed

I would put money into a site thats run on Wordpress

You could absolutely run a bank, but I would only put my money in it if it did NOT use fractional reserve practices

I.e. there are two types of accounts at this hypothetical bank, one type that is essentially a checking account, generates no interest and the depositor actually pays a small fee to have it sit there (maybe .2% or 10BTC, whichever is less monthly) - The bank then secures the funds, insures the deposit (if the bank gets robbed, the bank is responsible for replacing deposits since protecting them is its primary job here), and collects the fee for holding the money.  This money is NOT lent out.

The other type of account would be the time-deposit account, as described by someone earlier - Basically by depositing your money for a given legnth of time, you are lending it to the bank who pays you interest for it (This could be as high as 10%, depending on competition for investable BTC vs. number of projects/individuals seeking loans), and then the bank lends it out to one or many participants, again for a length of time no longer than the term of the deposit.  The bank charges a higher percentage than it pays the depositor(s), and at the end of the agreement the debter pays back the bank who pays back the borrower with everyone in the chain getting interest for their involvement.   If the loan(s) go bad, the bank takes the hit because their primary role in this capacity is to investigate and vouch for the lenders they loan money to.   This means you wouldn't be able to just ask for a loan and get one, but rather would need to either provide some collateral or have a very established reputation with the bank and a history of paying back on time.

So many of these problems are solved because it is in everyones best interest to make sure things go smoothly - Nobody gets a free lunch, but everybody benefits in a way that reflects real costs.

It's not a scam guys...  I own that site.. we threw up wordpress just to put in a place holder.  It should be up in Beta July first (that's when the SSL Firewall Security) should be tested...  all passwords usernames will be encrypted.. ect ect..

"interest"  is nothing more however than a cluster of servers that are mining... and people that use that as their online wallet IE: online bitcoin bank do get the dividends from it.   It's my way of saying thanks for using the free service.

I want to STRESS ... though we are focusing on security.. it will still be in Alpha Beta for a bit..  I'm trying to build a real company on bitcoins,  so reputation does matter... and it has company backing by Yooter Interactive.. ..   so if you want to test it..  use a small amount of coins...  I'll put a notice on the site when it's out of Beta.

Honestly I think it's the first time a tax paying company is putting up real money to build something for bitcoins.

Enjoy....    (crossing fingers it's secure by July 1st.)

Honestly,  I'm thinking that eventually someone will either 1 ) buy it... or B) it's adopted widely and I can put ads on the site....  I don't intend on charging people.

but I already threw thousands into it.

No worries... dude it's the first freaking bitcoin bank that is paying people "interest"...   everyone's first instinct is that it's a scam until they read that it's from mining that the dividends are being paid.

The profit can come from advertising. Just throw a banner and try to grow your customerbase as large as possible and add as many attractive features as you can to attract eyeballs.