Ask HN: Why is nobody making a bank for Virtual Currencies? | Hacker News Reader

Ask HN: Why is nobody making a bank for Virtual Currencies?

4 pointstuhin10 comments

I just had this weird idea of having a central bank like place for virtual currency and wondered how come nobody has done it. Is it because of a non standard market or because there is just no market? The closest thing I could find was http://www.vencurrency.com/

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Right now I think noone is building such a thing because it's not clear that the feds won't shut it down as soon as they notice. This isn't a big problem for users of virtual currencies, but people running an exchange market could be prosecuted on money laundering charges at the very least.

If there were legal precedent that virtual currencies are fully legal to exchange with USD, I think you'd find that exchanges would mushroom overnight, and that virtual currency (particularly Bitcoin) would have a huge spike in value.

But "virtual currencies" are fully legal to exchange with USD. Purchase Facebook Credits for cash. And perhaps this could be an exchange for just non-monetary currencies. Credits for Credits.

You're letting your wishful thinking override your critical thinking. You can purchase Facebook Credits with cash just like any good, but you cannot easily convert them back. It's not a currency exchange; it's a purchase.

Unfortunately the law doesn't always make logical sense. The real question is, do you think the government will accept the full use of an untraceable, uncontrollable, hard-to-audit, hard-to-tax alternative currency without any kind of opposition?

I agree. Theres also barriers with banks/exchanges getting in the way and lobbying a startup out of existence.

The big virtual currencies - Facebook credits, cash and coins in Zynga games - don't work like regular currencies. You can't exchange them for cash, you can't send them to other people, and at any time the entity that controls the currency can change the amount you have.

So a third-party bank doesn't make much sense. The companies that created the currencies want to retain control over them.

Very interesting Wednesday morning thought, might take a little while to implement. Let me know if you need any help. Don't know why people "need" to trade virtual currency aside from buyers remorse, money laundering or tax evasion. It could definitely cover a wide variety of digital goods. Virtual currency will be big.

What about BitCoin? http://www.bitcoin.org/

I think one of the more compelling aspects of these virtual currencies is the decentralized nature.

That is the thing. There are so many of them, Bitcoin being the most extreme in the spectrum of being virtual. Others being Facebook credit, Zynga Cash, Playdom Credits etc. With so many forms should not one have a central form to manage and transfer them. I mean it is certainly way ahead of it's time and assumes virtual currency will be big, but still.

You can lose all you Bitcoins if your computer storage is lost or compromised. Maybe a BitBank would be cool.

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