Post
Topic
Board Bitcoin Discussion
Re: Bitcoin Bank pays interest ? O.o
by
lemonginger
on 23/06/2011, 20:53:54 UTC
Of course, in Bitcoin world everything flies, no contracts needed Smiley

I keep hearing variations on this theme -- like no contracts or security or regulation is possible with bitcoins. It is, and I imagine many transactions eventually being kept in a regulated and insured bitcoin bank for example or very detailed legally binding contracts written between involved parties. There is nothing about bitcoin that prevents such legally binding contracts from being formed and enforced.

As far as a bitcoin bank, there are a variety of ways such a bank could generate an interest rate. Certainly speculating in other markets could be part of it and there is a possibility that the bank could take a loss. Same with lending bitcoins out at interest but having enough total capital to cover a "bank run". I would not entrust my coins in a bitcoin bank unless it was clear what our legal arrangement would be and what their liability would be in case of loss of my funds and how that would be enforced though.