Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

Banks can still make loans simply by offering certificates of deposit. This is the above-board way of loaning out people's money -- you make it absolutely clear that taking it out early has a cost, because the money is locked up in (hopefully) profitable ventures.

Would that be less profitable for the banks? Not really -- they would just adjust their prices to compensate, by charging fees on idle money that's instantly redeemable.

And if you let a secondary market for CDs flower, customers can still get good liquidity. Just in a way that's better subject to market discipline.

Anyway, best bet is to use several exchanges to take advantage of arbitrage opportunities and to distribute the risk.

I'd say Bitstamp has a very good track record, and what's wrong with Slovenia? It's probably about on the level of the Czech Republic in terms of economic freedom, development, level of corruption (relatively low), output, business practices, etc. Would doing business with a Czech company make you nervous?

In business culture, Slovenia looks toward Germany more than toward the former Eastern Block (of which it was never a part).

I mean, Bitstamp's owners are public people. I feel pretty confident that they're not going to run off with their depositors money. Is there something else that you're concerned about?

But I agree, if you want to just buy coins, Coinbase is a good start. And Kraken is looking very good, too, particularly if you're a serious trader (that's who they appear to target).

In that discussion we applied a merkel-sum tree data-structure— a pet datastructure that I'd previously proposed for making compact proofs of blockchain invalidity in Bitcoin (in order to make a future bitcoin world where no one runs full nodes safe from inflation and theft by miners)— to PT's bank fraud proofing application.

You may find the log interesting: https://people.xiph.org/~greg/bitcoin-wizards-fraud-proof.lo...

Search for "auditable off-chain transactions" and "Merkle-sum-tree"

(I left in a lot of unrelated stuff since it makes the meandering conversation make a bit more sense. Though a lot of this continues a long running dialog about cryptographic-wankery that has been going on for years)

Ultimately these schemes require the use of a jamming free broadcast network of some kind... otherwise they run into the same problems certificate transparency has where you can substitute the commitment on the fly. Fortunately, Bitcoin provides a global consensus mechanism which could be used to directly attach the commitment to the coins being spoken for.