Ask HN: Sick of your bank? Want to build a open source, non-profit, online bank?
33 comments
>Credit Unions [...] don't offer stuff like checking accounts, atms etc, aren't really open that much, are exceptionally slow at allowing you withdraw and are completely offline. That's just my experience, but I don't think you could actually bank with a credit union, which is what I'm trying to get at.
I'll chime in with a bunch of the other people in the thread and say that none of these things are true of my (US) credit union. Their online banking could use a design refresh, but fulfills all of my needs pretty well.
Plenty of atms and free checking, also a few convenient physical locations in case I need to look someone in the eye. Been with them for 10 years.
edit: branches close at 6, but the drive through is open until 8. Also open on Saturday and Sunday mornings.
I'll chime in with a bunch of the other people in the thread and say that none of these things are true of my (US) credit union. Their online banking could use a design refresh, but fulfills all of my needs pretty well.
Plenty of atms and free checking, also a few convenient physical locations in case I need to look someone in the eye. Been with them for 10 years.
edit: branches close at 6, but the drive through is open until 8. Also open on Saturday and Sunday mornings.
I think like always, the US is a bit different. As I think I mentioned, I'm not thinking of something like a credit union, rather something quite different.
The only differences from my credit union seem to be mobile-first web design and an open API.
I usually deal with my cu through my phone, and I do have to click "Mobile" to get the mobile site - but it doesn't bother me very much.
I usually deal with my cu through my phone, and I do have to click "Mobile" to get the mobile site - but it doesn't bother me very much.
I assume your credit union isn't open source though? It's great that you're happy with your bank, but I suppose what I'm trying to get at is that banks can improve a lot, and just because it you're happy now, doesn't mean we can't try to do better. It's kind of along the lines of Ford's Quote:
“If I had asked people what they wanted, they would have said faster horses.”
“If I had asked people what they wanted, they would have said faster horses.”
There are so-called "sustainable banks". The largest in Europe is Triodos, they also have a British subsidiary. Globally they are networked through the Global Alliance for Banking on Values (http://gabv.org). Key features of those banks are transparency as to how much money is lent to whom (there's a Google Maps based tool on Triodos' website to discover their borrowers), non-financing of certain industries (e.g. weapons), non-participation in food speculation, etc.
I would be very interested in a bank that is open source, radically transparent, and run for the benefit of the community.
The code for the website, backoffice systems, credit scoring, and fraud detection could be open-sourced and continually improved.
Data on credit decisions would be available to any member to scrutinize and challenge, thus reducing fraudulent or unwise loans and identifying opportunities to expand profitable lending.
The bank's individual loans and investments would be public, perhaps lightly scrubbed of personal identifying information. Regulators, journalists, and motivated individuals could see if sweetheart deals are being made at the expense of the membership or the deposit insurance fund.
The bank could publish a public "blockchain" of transactions similar to Bitcoin so financial statements could be reconciled down to the transaction level. This might make it much more difficult to hide fraud and abuse.
Incidents of fraud and default would be published as they occur. The resulting social pressure should reduce the bank's costs, and the data could be used to improve credit and membership decisions.
The code for the website, backoffice systems, credit scoring, and fraud detection could be open-sourced and continually improved.
Data on credit decisions would be available to any member to scrutinize and challenge, thus reducing fraudulent or unwise loans and identifying opportunities to expand profitable lending.
The bank's individual loans and investments would be public, perhaps lightly scrubbed of personal identifying information. Regulators, journalists, and motivated individuals could see if sweetheart deals are being made at the expense of the membership or the deposit insurance fund.
The bank could publish a public "blockchain" of transactions similar to Bitcoin so financial statements could be reconciled down to the transaction level. This might make it much more difficult to hide fraud and abuse.
Incidents of fraud and default would be published as they occur. The resulting social pressure should reduce the bank's costs, and the data could be used to improve credit and membership decisions.
I think you'll need to define "bank" first. What services does a bank offer that you could replicate? Would it offer interest?
I strongly believe that this will go nowhere unless you spec out exactly what you want to accomplish. Just saying "we should make a better bank. Let's talk about it" won't progress much.
I strongly believe that this will go nowhere unless you spec out exactly what you want to accomplish. Just saying "we should make a better bank. Let's talk about it" won't progress much.
Agreed, I think it would make most sense to keep it really simple for now. So like a checking account at heart. No loans or anything like that. I think that's what most people would need - if you need a savings account you don't need an accessible online back.
So what does the bank do with all of this money that people deposit if they don't make loans.
From http://money.howstuffworks.com/personal-finance/banking/bank...: Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively.
From http://money.howstuffworks.com/personal-finance/banking/bank...: Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively.
My Credit Union (in Oregon)
* Offers Checking accounts
* Has ATM's
* Are open as much as most banks are.
* Are exceptionally friendly.
* Have an online presence that... well it's not exceptional, but it's not that bad either as far as these things go.
That's why I've always kept my personal and business accounts there over the past 20 years.
* Offers Checking accounts
* Has ATM's
* Are open as much as most banks are.
* Are exceptionally friendly.
* Have an online presence that... well it's not exceptional, but it's not that bad either as far as these things go.
That's why I've always kept my personal and business accounts there over the past 20 years.
That's cool. Business accounts aswell? CU's seem much more developed in the US. I think if you were to look at the three things I mentioned - online, non profit and open source, non profit is the one I think is least differentiable if that makes any sense. I think an online open source bank is the real innovative part, not the non profit part.
Yes, my business account as well.
I love open source software, but from a bank...I just want them to give me a good deal and be helpful.
I love open source software, but from a bank...I just want them to give me a good deal and be helpful.
interesting. Why would you be against an open source bank? Would you agree that banks aren't exactly cutting edge? If so, wouldn't it be better if they were? (More features, easier experience)? Thanks :)
Most businesses are probably running the majority of their banking through banking software -- so long as the bank integrates with their package of choice (Peachtree, etc), most won't care beyond basic friendly business banking practices.
Banks are not cutting edge in general, at least not in the US. If you look at other markets, like Europe, they adopted a lot of technology must faster than US banks: two-factor auth tokens, sending money via SMS, for example.
Banks are not cutting edge in general, at least not in the US. If you look at other markets, like Europe, they adopted a lot of technology must faster than US banks: two-factor auth tokens, sending money via SMS, for example.
My bank here in Italy has a pretty good web interface, and very easy money transfers with IBAN. Other than that though, I prefer the low fees in the US.
Most credit unions in the US are, but I think situation outside of the US isn't the same. Europe doesn't have credit union alliances like - http://www.allianceone.coop
Same basic idea for my credit union in the Atlanta area. Sure nationwide banks have better mobile apps and on-line features, more branches, and are not regional... but my credit union is still usable as a bank.
I think if you were to look at the three things I mentioned - online, non profit and open source, non profit is the one I think is least differentiable if that makes any sense. I think an online open source bank is the real innovative part, not the non profit part. So I'm not trying to be an alternative to credit unions, I'd prefer to be an option for 20 something year olds who spend most of their life online who want to bank online with a bank that's different to other banks. Not sure CU's have the best online systems (have experience in this)
My credit union (in USA) is awesome. It offers all "other stuff" like checking accounts and atms. They are open "normal business hours" which doesnt matter to me since I live out of state anyway, theyre exceptionally fast at allowing me to withdraw, and are 100% online. I mostly interact with my credit union via my iPhone, and have no problems.
Yes, Im way out of range of my credit union's ATMs. No biggie, they pay me $20 a month to cover any ATM charges! In fact, just yesterday, I got a free $80 long term member award (its been more than a decade).
Basically my credit union kicks all kinds of *ss. If they ever grow huge and get pwned by big bankery, Ill likely change my mind.
Im totally down for the open source non profit bank though.
Yes, Im way out of range of my credit union's ATMs. No biggie, they pay me $20 a month to cover any ATM charges! In fact, just yesterday, I got a free $80 long term member award (its been more than a decade).
Basically my credit union kicks all kinds of *ss. If they ever grow huge and get pwned by big bankery, Ill likely change my mind.
Im totally down for the open source non profit bank though.
As other people mentioned, most of what you described is offered through credit unions. But most credit unions are small and don't have the capacity to offer great online/mobile experiences. I would be interested to see a project to open source a solution for credit unions to customize and use to offer a better user experience.
Interesting.. but I think you can go further.
The US has credit unions, which (generally) address the non-technical things here - they're owned by their depositors and any profits beyond what's needed to operate get returned as dividends. I've had very good experiences thus far with Simple, as well.
I can see why you're linking credit unions with the non profit thing, but I think the non profit thing is there, for me at least, as more of a statement to show aims, so not nessecarily the same reason why a credit union is non profit. My experience with CU's here is that they are even worse than banks (almost impossible to withdraw, no current accounts, no atms, rarely open) is that similar in the US?
Very different here in the States. They have ATMs, are open about the same hours as banks, checking/business accounts, offer credit, mortgages, car loans, etc.
> I'm not thinking of something like a credit union, rather something quite different
I'd guess from reading the comments that US-style credit unions are not common outside the US.
If you came up with a radical new banking product that has the characteristic of, say, reducing fee income, credit unions might be the best place to launch it. As you can see from other comments, transparency tools probably fit this category.
Generally, however, I think there is a lot of potential in organizations outside the "investor owned corporation" sphere. A co-op ISP, for example.
Anywhere there are perverse incentives for investor owned enterprises there is room for different structures.
Adding open source client software and high transparency in operations for a credit union could provide an incremental improvement over the basic idea of depositor-owned banks. But features like a "social investing profile' if that's what you are getting at, would be applicable to any bank's customers.
I'd guess from reading the comments that US-style credit unions are not common outside the US.
If you came up with a radical new banking product that has the characteristic of, say, reducing fee income, credit unions might be the best place to launch it. As you can see from other comments, transparency tools probably fit this category.
Generally, however, I think there is a lot of potential in organizations outside the "investor owned corporation" sphere. A co-op ISP, for example.
Anywhere there are perverse incentives for investor owned enterprises there is room for different structures.
Adding open source client software and high transparency in operations for a credit union could provide an incremental improvement over the basic idea of depositor-owned banks. But features like a "social investing profile' if that's what you are getting at, would be applicable to any bank's customers.
I was just musing about this too (http://domitable.com/content/it-time-protocol-renaissance)
The enabling technology of the outcome you are after will likely be a protocol rather than a service, as a service only succeeds if it can outdo the competition, which leads to more fracturing rather than unity.
Just as HTTP enabled the document Web, the development of a Hyper Payment Transfer Protocol (or Hyperfunds Transfer Protocol, or something along those lines) could enable the financial Web.
Decentralizing transactions and capital is something Ripple and the various cryptocoins hope to achieve, so whether the protocol emerges along those lines or as something that doesn't require a peer-to-peer network, I don't know, only that it's a good conversation to be having right now.
The enabling technology of the outcome you are after will likely be a protocol rather than a service, as a service only succeeds if it can outdo the competition, which leads to more fracturing rather than unity.
Just as HTTP enabled the document Web, the development of a Hyper Payment Transfer Protocol (or Hyperfunds Transfer Protocol, or something along those lines) could enable the financial Web.
Decentralizing transactions and capital is something Ripple and the various cryptocoins hope to achieve, so whether the protocol emerges along those lines or as something that doesn't require a peer-to-peer network, I don't know, only that it's a good conversation to be having right now.
I agree that the protocol is the key. Its quite useful to think of the protocol for transactions to be similar to a transaction in the realworld. A discussion on terms of the deal, a transfer of goods/services, perhaps a lingering of a favour owed. Perhaps in the future every person will have their own "currency", with their own exchange rate with every other person they ever meet or deal with.
There is a new credit card in the US that has crowd sourced policies set by the customer community. The incentive is that the card profit shares.
Article - http://www.businesswire.com/news/home/20120305006339/en/Barc...
Main Site - http://www.barclaycardring.com/
A similar approach may be feasible for an online world bank to generate enough income to pay employees.
Article - http://www.businesswire.com/news/home/20120305006339/en/Barc...
Main Site - http://www.barclaycardring.com/
A similar approach may be feasible for an online world bank to generate enough income to pay employees.
Banks have 2 key functions:
1. Taking deposits and lending them out again. i.e. creating money through the credit creation process.
2. Providing money transfer capabilities.
positvemoney.org runs a policy campaign which makes a compelling argument for a separation of these two functions as a response to the financial crisis. One of the arguments is that when the investments of banks fail, our ability to transact fails with them. Not exactly a resilient system.
There are a number of existing open source projects to create libraries and protocols to generically provide money transfers. http://opencoin.org (disclaimer: I am involved with this project) http://opentransactions.org http://opencoin.com - open source but very much commercial
Those who say bitcoin is addressing these functions are misguided. Bitcoin is arguably a currency tightly integrated with a transaction technology. In theory the bitcoin transaction technology could be re-worked to be useful as a library for money transfers (non-anonymous). I imagine that would be a significant amount of work.
positvemoney.org runs a policy campaign which makes a compelling argument for a separation of these two functions as a response to the financial crisis. One of the arguments is that when the investments of banks fail, our ability to transact fails with them. Not exactly a resilient system.
There are a number of existing open source projects to create libraries and protocols to generically provide money transfers. http://opencoin.org (disclaimer: I am involved with this project) http://opentransactions.org http://opencoin.com - open source but very much commercial
Those who say bitcoin is addressing these functions are misguided. Bitcoin is arguably a currency tightly integrated with a transaction technology. In theory the bitcoin transaction technology could be re-worked to be useful as a library for money transfers (non-anonymous). I imagine that would be a significant amount of work.
I've been reading through this thread and find it very interesting. I really don't know much about banking systems in general but I'm all for an open-source, transparent banking system; one that isn't controlled by a central body that can fail spectacularly and have consequences for everyone around the world. I think what I'm getting at is that we have to stop thinking of this in terms of "my bank does this, my bank does that." This is the current system and one that has proven to be elitest, corruptable and fallible.
As I said, I'm not very knowledgable about the specifics of banking but what do people think about this idea. I was checking out stripe.com and I had the idea: What if everybody was their OWN bank? I have some kind of server that hosts my account, I can accept and make payments and connect with anyone else to do transfers. I can be paid directly from my job etc... I know it sounds a bit like bitcoin but why would it not work with our current currencies? Why do I need to put my money in one of the 'approved' banks? I guess there are standards and such but could we not work toward this kind of system?
I personally think that the problem with banks is that they do so much more than what they are supposed to do. The only thing I need from a bank is a place to "store" my money, and possibly make transactions.
That's all, that's what a bank is supposed to do. Also no interest rate, my dad used to be a member of a group here in the Netherlands who wanted to create a bank of their own too. I never really understood it, I was just 10-12 when it was most active, but what I understood from it was that there would be no interest rates. You might try searching for it on google, it was called CMN. There is a Dutch book about it written by Hank Monrobey. You'll have more chance of finding that than anything else about it.
Here is a link: http://books.google.nl/books?id=2uTzrLOGfGwC&pg=PA104&lpg=PA...
That's all, that's what a bank is supposed to do. Also no interest rate, my dad used to be a member of a group here in the Netherlands who wanted to create a bank of their own too. I never really understood it, I was just 10-12 when it was most active, but what I understood from it was that there would be no interest rates. You might try searching for it on google, it was called CMN. There is a Dutch book about it written by Hank Monrobey. You'll have more chance of finding that than anything else about it.
Here is a link: http://books.google.nl/books?id=2uTzrLOGfGwC&pg=PA104&lpg=PA...
Here's what I would do if my country needed this (Canada has very strong Credit Unions already, that accomplish nearly all of what you want. I actually work for them, on online banking software):
1. Form a credit union, or partner with an existing one. This is a very good structure for a financial institution that is open and non-profit. You don't need any physical branches, you can be online only.
2. Read up on http://en.wikipedia.org/wiki/ISO_8583 , check out a project like http://www.jpos.org/ - this is the standard all financial institutions (and ATMs, debit terminals, etc.) use to talk to each other.
3. You'll also need the actual banking database-of-record software (banking system, banking host software are commons terms). There are some open ones already out there, I can't speak to their quality.
4. If you just want retail banking (ATM cards, current accounts, etc.) you're pretty much done. If you want to offer loans/mortgages, things get a lot more complicated.
1. Form a credit union, or partner with an existing one. This is a very good structure for a financial institution that is open and non-profit. You don't need any physical branches, you can be online only.
2. Read up on http://en.wikipedia.org/wiki/ISO_8583 , check out a project like http://www.jpos.org/ - this is the standard all financial institutions (and ATMs, debit terminals, etc.) use to talk to each other.
3. You'll also need the actual banking database-of-record software (banking system, banking host software are commons terms). There are some open ones already out there, I can't speak to their quality.
4. If you just want retail banking (ATM cards, current accounts, etc.) you're pretty much done. If you want to offer loans/mortgages, things get a lot more complicated.
That's great and all, but I think just starting a new bank is not good enough.
In my opinion if we can combine some of the good ideas behind bitcoin with those in your list. Im not saying bitcoin is the right model. I think we need to think hard about what enables trade, growth and a society that enables not just a good standard of living, but also makes collaboration easier on large (think planet wide) projects. Automatic auditing should be built in from the ground up, transparency will allow trust between parties both private and public. Community voted policies that reflect in specific functions/code that can be made part of the transaction system to collect taxes that we can use to fund schools, infrastructure and other projects communities decide are worth funding.
In my opinion if we can combine some of the good ideas behind bitcoin with those in your list. Im not saying bitcoin is the right model. I think we need to think hard about what enables trade, growth and a society that enables not just a good standard of living, but also makes collaboration easier on large (think planet wide) projects. Automatic auditing should be built in from the ground up, transparency will allow trust between parties both private and public. Community voted policies that reflect in specific functions/code that can be made part of the transaction system to collect taxes that we can use to fund schools, infrastructure and other projects communities decide are worth funding.
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In Italy we have
http://www.bancaetica.it/
it's a 'popular' bank, it means that collects money on the local district to borrow to local/italian entrepreneurs. And it's ehical, it borrows only to projects with high levels of sustainability: green economy, innovation, alternative energies etc.
Now it's quite up also the concept of 'social banking'
http://www.social-banking.org/the-institute/what-is-social-b...
I have a CU in USA an it's pretty good to me so far so I'm satisfy with it.
I can get cash from any participating atm or just cash back at a groceries. I have a saving and a checking account. I had two loans with them. First loan was a 15k one I paid off and currently I have a 25k loan with them. The interest rate is pretty low.
I usually just pay via credit card to get points and use my CU to pay the credit card bill.
I think my CU addresses every single point on your bullet list except for mobile first. But I usually just use a credit card by proxy.
One negative thing about CU is just the fact that they're selective on membership.
I can get cash from any participating atm or just cash back at a groceries. I have a saving and a checking account. I had two loans with them. First loan was a 15k one I paid off and currently I have a 25k loan with them. The interest rate is pretty low.
I usually just pay via credit card to get points and use my CU to pay the credit card bill.
I think my CU addresses every single point on your bullet list except for mobile first. But I usually just use a credit card by proxy.
One negative thing about CU is just the fact that they're selective on membership.
That's pretty nice. Is there some kind of online/mobile setup for adminstering? Also actually, do they do business accounts?
Other people brought this up, but it's strange you don't mention credit unions, since according to the Irish Examiner [0], 75% of Ireland's citizens have a credit union account, which is the greatest proportion of any country [1].
[0] http://www.irishexaminer.com/business/75-of-irish-adults-in-...
[1] http://en.wikipedia.org/wiki/Credit_union#Global_presence
[0] http://www.irishexaminer.com/business/75-of-irish-adults-in-...
[1] http://en.wikipedia.org/wiki/Credit_union#Global_presence
My issue with Credit Unions is that they don't offer stuff like current accounts, atms etc, are really open, are exceptionally slow at allowing you withdraw. That's just my experience, but I don't think you could actually bank with a credit union, which is what I'm trying to get at
I don't understand what you mean by "bank with", then. I put my money in and take it out as needed with my credit union. I have direct deposit, a credit card, checking, and savings. I have web-based tools where I can immediately shuffle money between accounts.
What is missing from that set of use cases?
EDIT: Oxford comma
What is missing from that set of use cases?
EDIT: Oxford comma
I think the US (like always) is maybe a little lucky when it comes to CU's, but copying from my postscript I think if you were to look at the three things I mentioned - online, non profit and open source, non profit is the one I think is least differentiable if that makes any sense. I think an online open source bank is the real innovative part, not the non profit part.
Don't forget, non-profit != not-for-profit.
Credit unions cannot really exist as non-profits; they aren't funded by donations, and they generally do have to operate at a small profit.
Most credit unions are not-for-profit. They must operate at a small surplus in order to guarantee solvency and operational cash. A typical company generates profits for the benefit of owners & shareholders, whereas the credit union not-for-profit generates profit to provide better services, better rates, etc.
(Non-profit status is usually for charities, and banking is not a charitable activity.)
Credit unions cannot really exist as non-profits; they aren't funded by donations, and they generally do have to operate at a small profit.
Most credit unions are not-for-profit. They must operate at a small surplus in order to guarantee solvency and operational cash. A typical company generates profits for the benefit of owners & shareholders, whereas the credit union not-for-profit generates profit to provide better services, better rates, etc.
(Non-profit status is usually for charities, and banking is not a charitable activity.)
In Ireland, Credit Unions are primarily for loans and savings accounts. You don't get web based tools, or credit cards or any of the other practical parts of having a checking account at a bank here.
Those are pretty much all untrue of the credit unions I have experience with in the US, but I don't doubt that things could be very different elsewhere.
What is a 'current account'?
current account = checking account in US terms :)
In the UK a Current Account is basically equivalent to a US checking account. So your average day-to-day account normally with a debit card, cheque book and easy access. It might also offer an overdraft facility. Typically you'll get zero or very little interest on any money in the account.
What Americans call a 'checking account'
+ A nice, well documented, and secure API for developers to create all sort of applications to integrate with the bank.
I'm a software developer, glad to spend some of my time in this project: rodrigosetti [at] gmail [dot] com
I'm a software developer, glad to spend some of my time in this project: rodrigosetti [at] gmail [dot] com
You read my mind :) Was one of the ideas I had. I think that'd be really cool. Will let you know thanks!
This sounds like a US credit union. Many people belong to them, and they are fantastic. That said, I do not know of any credit unions with open source software. It would be very interesting to see.
If you haven't watched "Bank Of Dave" you really should check it out. Basically this guy setup a 'bank' and the show documents all the troubles throughout the process and the hoops he had the jump through to open. Check it out.
http://www.channel4.com/programmes/bank-of-dave
http://www.channel4.com/programmes/bank-of-dave
Will do. Is that setting up a bank from scratch though? Partnering would/should remove a lot of the logisitics.
Yes, I guess he is starting from 'scratch' but the show aligns really well with your ideas and I think it will help you at least see someone go down that path and what comes up and what you might need to get started. Anyways, check it out, pretty interesting.
Looks like the videos are locked by region. How do I get around this? Are the videos hosted somewhere else?
I've heard good things about Simple and Ally, but for myself I find my local podunk bank supplemented by Amex Bluebird is enough.
Simple is still incredibly restrictive to me. Ally or Schwab would be my first choices if I ever moved off my current bank.
I have Simple and I love it! I have a few invites if anyone is interested.
My credit union is in the US and I have 2 checking accounts, savings accounts, auto loans, etc through them. I can use any shared branch ATM for no fee too. I have had several credit unions in the past and they have all offered everything you said they dont in your posting.
That's pretty nice. Is there some kind of online/mobile setup?
Yeah. They have web banking and a mobile app. I can even deposit checks from my phone.
I have to ask though, is this seriously not the case for CU's in Ireland? I think here in the US this is totally common place and nobody would use a CU if they didn't offer these services.
I have to ask though, is this seriously not the case for CU's in Ireland? I think here in the US this is totally common place and nobody would use a CU if they didn't offer these services.
What do you mean by open source? Do you want the banks website to be open source, or all of the back office code that talks to ancient mainframes and proprietary 3rd party applications?
What will draw customers (other then fellow developers) to a bank with open source software?
What will draw customers (other then fellow developers) to a bank with open source software?
Good Question. Lets take the scenario where we are partnering with another bank. So then we have two main applications or systems - 1) Integration with their api (I'm assuming this would be a fairly big thing considering the complexities) and 2) Our API/App i.e what people would actually use. I would see the second one there being open source, but not the first one, for obvious security reasons. Furthermore, apps and other smaller services would be open source. I think if you can portray an image that you are transparant and in a non technical way, have it as part of the brand as such, it might interest people. Get me?
You might be better off by starting to develop open source software for existing banks that align with the other values. just to get started. The regulatory side is hard and expensive.
Banks to look at are Metro (UK), Handelsbanken (Sweden and elsewhere), Triodos.
Banks to look at are Metro (UK), Handelsbanken (Sweden and elsewhere), Triodos.
Isn't Bitcoin already addressing most of your concerns? I think the solution is not open centralization (Open source Banking) but de-centralization, which is what Bitcoin addresses by giving the power and money of the people back to people.
I think 99% of people aren't going to bank with an unregulated, fluctuating currency that they don't understand or control.
..99% of people aren't going to bank with..
People won't "bank" when it comes to Bitcoin - There's no need of a Banking system really. And as per your concern around fluctuating value of Bitcoins, It's just a matter of how you look at it and standardization.
Assuming everyone tomorrow agrees to standardize that Bitcoin is the de-facto currency and decides to transact in BTC only, I don't think anyone will be concerned about fluctuation anymore. Item X which retails for 2BTC, will retail for 2BTC today, tomorrow and day after tomorrow. (Assuming no price change, offcourse)
People won't "bank" when it comes to Bitcoin - There's no need of a Banking system really. And as per your concern around fluctuating value of Bitcoins, It's just a matter of how you look at it and standardization.
Assuming everyone tomorrow agrees to standardize that Bitcoin is the de-facto currency and decides to transact in BTC only, I don't think anyone will be concerned about fluctuation anymore. Item X which retails for 2BTC, will retail for 2BTC today, tomorrow and day after tomorrow. (Assuming no price change, offcourse)
Consider John Doe. John is an ordinary internet user who's heard of bitcoin, but has no iota of how it works and 0 control over it. Will John trust his life savings with it? No. I think that's pretty obvious.
Let's face it 'Assuming everyone tomorrow agrees to standardize that Bitcoin is the de-facto currency and decides to transact in BTC only' is a crazy assumption right now.
Let's face it 'Assuming everyone tomorrow agrees to standardize that Bitcoin is the de-facto currency and decides to transact in BTC only' is a crazy assumption right now.
>Consider John Doe. John is an ordinary internet user who's heard of bitcoin, but has no iota of how it works and 0 control over it. Will John trust his life savings with it? No. I think that's pretty obvious.
err consider John Doe... He doesn't give a damn if his bank is open source or not. John Doe is not your target, people who use BitCoins (and I don't mean lemonade selling girl scouts) are your target.
err consider John Doe... He doesn't give a damn if his bank is open source or not. John Doe is not your target, people who use BitCoins (and I don't mean lemonade selling girl scouts) are your target.
I'm not suggesting anyone to bet their life savings with Bitcoin today. The dream is still decades away, may be years.. My assumption might be a crazy one right now, but remember revolutionary ideas always sound crazy at first.
Electricity, Air travel, Internet? Don't you think these were crazy ideas some day?
With Bitcoin ATM's opening up in Toronto where I live, I see things moving fast than even myself expected. Sure, there will be resistance but it's hard to suppress something as revolutionary & crazy as Crypto currencies.
Electricity, Air travel, Internet? Don't you think these were crazy ideas some day?
With Bitcoin ATM's opening up in Toronto where I live, I see things moving fast than even myself expected. Sure, there will be resistance but it's hard to suppress something as revolutionary & crazy as Crypto currencies.
The same conclusion can be drawn for your Open source bank?
Assume the same John Doe :), ordinary internet user, Never heard of XYZ Open source bank, No idea how it works, 0 control over it. Will John trust his life savings with this Open Source bank?
I'm not trying to de-motivate you or diss you, infact I encourage everything Open Source! It's just that I'm attempting to outline that something out there already exists which solves may be atleast some of the problems you want to solve. Good luck!
Assume the same John Doe :), ordinary internet user, Never heard of XYZ Open source bank, No idea how it works, 0 control over it. Will John trust his life savings with this Open Source bank?
I'm not trying to de-motivate you or diss you, infact I encourage everything Open Source! It's just that I'm attempting to outline that something out there already exists which solves may be atleast some of the problems you want to solve. Good luck!
> People won't "bank" when it comes to Bitcoin - There's no need of a Banking system really.
Banking is about borrowing and lending. The idea that using bitcoin eliminates the need to borrow and lend money is something that could use support.
Banking is about borrowing and lending. The idea that using bitcoin eliminates the need to borrow and lend money is something that could use support.
The whole point of de-centralizing a financial system is to move away from a central source for lending & borrowing. With Crypto currencies, it would be easier than ever for you to lend/borrow money to/from your friends/colleagues/investors etc.
The idea & support for transactions like borrowing, lending, escrow and likely all other transaction types that you can think of are already built into Bitcoin & it's design. They are just not being used as of today.
Infact, I would say it's safer to carry out such transactions using Crypto currencies than with a Bank. Please see this video: http://www.youtube.com/watch?v=mD4L7xDNCmA
Satoshi was clever enough to think of all use-cases and he made sure that the design & eco-system would be solid enough to replace centuries old incumbents like Banks. The features are just sitting and hiding there in the protocol to be made use of when there is enough traction & momentum.
The idea & support for transactions like borrowing, lending, escrow and likely all other transaction types that you can think of are already built into Bitcoin & it's design. They are just not being used as of today.
Infact, I would say it's safer to carry out such transactions using Crypto currencies than with a Bank. Please see this video: http://www.youtube.com/watch?v=mD4L7xDNCmA
Satoshi was clever enough to think of all use-cases and he made sure that the design & eco-system would be solid enough to replace centuries old incumbents like Banks. The features are just sitting and hiding there in the protocol to be made use of when there is enough traction & momentum.
I like bitcoin, but a government has the right to define the currency it's citizens use (i.e what is legal tender and what's not) and I think for a bank targeting ordinary people, you have to deal in legal tender. I don't think a bank for the 0.0001% who use bitcoin is going to be able to revolutionise banking..
You might also want to have a look at this video: http://www.youtube.com/watch?v=JJljgM6TSu8
I really like @photomatt's ideas on this topic from four years ago :)
http://ma.tt/2009/08/starting-a-bank/
http://ma.tt/2009/08/starting-a-bank/
How would this be different from http://www.creditunion.ie/ ?
- Open Source
- Online (no physical presence)
- Available 24/7
- Checking account
- Debit card
I think people have seized on the non profit word here. I think credit unions and this would be non profit in different ways if that makes sense.
I think people have seized on the non profit word here. I think credit unions and this would be non profit in different ways if that makes sense.
some people will tell you bitcoin is going to be that online non-profit open-source bank
I might be one of those people. :P
Isn't this the idea behind bitcoin?
Perhaps its the legislation or financial overseer institutions that make banking pure hell?
Banks are required to for example know their customers before giving them accounts, and can be held responsible for money or shady laundering.
Im all for the idea anyway but lets talk real, how would it work? It has to be for profit else its not a business but a welfare whixh the banks will go to for bailouts next. Owned by all members?
We had such discussions before on hn conclusio was that current laws and requirements dont make that possible.
Banks are required to for example know their customers before giving them accounts, and can be held responsible for money or shady laundering.
Im all for the idea anyway but lets talk real, how would it work? It has to be for profit else its not a business but a welfare whixh the banks will go to for bailouts next. Owned by all members?
We had such discussions before on hn conclusio was that current laws and requirements dont make that possible.
See how simple do it in the US? They've a partner bank, which handles that side of things. I'd be optimistic the same could work.
But then it isn't really "non-profit", it's "doing work for a big shady corporation without making any margin on it"...
I think it's unavoidable to have a partner bank (at least for now) but considering they wouldn't get as much, that would surely be better? I completely get what you mean, and agree in many ways, but is there any other way?
Here's the idea: An open source, upfront, transparant and humane bank driven not by profit but by the passion to simply create a bank that people like and enjoy using.
A few key ideas or keystones might include:
This wouldn't just be a projects for fellow developers. We'd need designers, lawyers, and people involved in banks who are dissatisfied at the current status quo (after all we'll need a partner bank in every country we want to operate in to avoid logistical nightmares). I really think it could be a project anyone could help out in - Think of it as a generation coming together to drag one of the biggest industries in the world into the 21st century.
By partnering with a local bank in each country, it would cut out a lot of issue logistically, making the project a lot easier to implement than just building a new bank from the ground up.
Any thoughts?
By the way, my email address is npaterson1 [at] gmail [dot] com if you're interested/want to know more :) Niall
P.S Regarding Credit Unions, I can see why people are bringing them up but mcuy issue with them is that they don't offer stuff like checking accounts, atms etc, aren't really open that much, are exceptionally slow at allowing you withdraw and are completely offline. That's just my experience, but I don't think you could actually bank with a credit union, which is what I'm trying to get at.
P.P.S I think if you were to look at the three things I mentioned - online, non profit and open source, non profit is the one I think is least differentiable if that makes any sense. I think an online open source bank is the real innovative part, not the non profit part.
EDIT: A lot of people are asking something along the lines of 'well this works when it comes to banking, what else is there to it?'. I think banking is a really really backward system, there's so much you could do, simple tiny things that would make experiences so much more pleasant. Here's an example: Imagine if your bank account had a profile, almost like a social network, and you could go to someone else's profile and quickly see recent transactions you've had with them. I'm not thinking of something like a credit union, rather something quite different, and I really feel there's lots more that can be done with banking from a tech pov. I don't get why we have to assume banking is as advanced as it can be, it's clearly not.