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Well banks used to use gold as an asset and then give loans on top of that, nothing stopping anyone making Bitcoin IOUs on top of bitcoin holdings. The problem
by yc1010 11y ago
Well banks used to use gold as an asset and then give loans on top of that, nothing stopping anyone making Bitcoin IOUs on top of bitcoin holdings. The problem is the same that was solved by banks hundreds of years ago, why would someone store gold with them instead of storing it at home, replace gold with bitcoin in previous sentence ;)
Anyways this might explain Goldman Sachs involvement, when one puts bitcoin into Circle you do not control the keys (the "gold" is no longer yours) you get a Bitcoin IOU and you put your trust in Circle, down the road once Circle have millions of users they could offer a lending service and/or make it easier for people to get into stocks (and hence Goldman Sachs profit) and other investments
- imaginenore 11y ago> why would someone store gold with them instead of storing it at home 1) Security 2) Insurance There's insured Bitcoin storage already: https://www.elliptic.co https://www.elliptic.co
- jasonisalive 11y agoYou can't send perfectly divisible quantities of gold halfway around the world in seconds. You also can't store gold in your brain and thus move unlimited quantities of gold across national borders undetected. Furthermore, unlike gold, Bitcoin storage and transaction signing needs can and will be satisfied by low-cost dedicated computing units, opening the freedom to store bitcoin to any who wish to use it, and the chance of possessive governments successfully trying to prevent people from doing so is about as likely as governments stamping out smartphone use.
- yc1010 11y agoYou don't need to "sell" bitcoin to me :) I use it almost daily since 2011-2012 ;)
- zhte415 11y agoIndeed. This setup could work well as a repo or stock loan and trying out market making in such a currency agreement.