There's nothing stopping you from loaning, say, 1.0 BTC and asking for 1.1 BTC to be paid back later, but Bitcoin does not have any mechanism to help enforce such loans. There's a forum dedicated to it: https://bitcointalk.org/index.php?board=65.0 Many people are skeptical of Bitcoin loans since the expected rate of return of holding BTC exceeds the rate of return of almost all legitimate businesses.
Many people are skeptical of Bitcoin loans since the expected rate of return of holding BTC exceeds the rate of return of almost all legitimate businesses.
To steal a tptacek line, "I hope to make the starburst of points which follow by implication rather than by explicit statement."
Interest is not only to protect the bank (or lender) against inflation. It's also (one of ) the way that the bank gets paid.
For a moment suppose that there is no inflation, no fraud, no bankrupts and no administrative commissions: If the bank gives you $100 and you pay in total $110 then the profit of the bank is $10.
Interest is just a function of a loan agreement - it is an entirely separate issue from the available supply of the currency in question.
Even if you borrow monopoly money from a specific monopoly set, there can still be interest required on the loan. It may be impossible for you to fulfil your loan obligations if your supply of whatever currencies the lender will accept (which does not necessarily only have to be the original loan currency) is limited, but that's a separate issue.
Think of the "Bitcoin economy" as a border-less sovereign country with a floating, fixed-supply currency. This country would still have interest rates, and those rates would still be a function of everyone else's interest rates in a way fundamentally related to the FX rate (complicated, but not insurmountably, by the lack of a low-risk Bitcoin counterparty, thereby holding back the development of Bitcoin collateral and lending markets).
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I've always wondered, is interest possible on BTC loans? Technically, it should not be, since there's a limited amount of coins.
Are you qualified/classified/stamped/branded/innoculated/whatever to comply with US regulation bullshit?
What's your business model here? Keep a % of the loan?
There's nothing stopping you from loaning, say, 1.0 BTC and asking for 1.1 BTC to be paid back later, but Bitcoin does not have any mechanism to help enforce such loans. There's a forum dedicated to it: https://bitcointalk.org/index.php?board=65.0 Many people are skeptical of Bitcoin loans since the expected rate of return of holding BTC exceeds the rate of return of almost all legitimate businesses.
Many people are skeptical of Bitcoin loans since the expected rate of return of holding BTC exceeds the rate of return of almost all legitimate businesses.
To steal a tptacek line, "I hope to make the starburst of points which follow by implication rather than by explicit statement."
Interest is not only to protect the bank (or lender) against inflation. It's also (one of ) the way that the bank gets paid.
For a moment suppose that there is no inflation, no fraud, no bankrupts and no administrative commissions: If the bank gives you $100 and you pay in total $110 then the profit of the bank is $10.
Interest is just a function of a loan agreement - it is an entirely separate issue from the available supply of the currency in question.
Even if you borrow monopoly money from a specific monopoly set, there can still be interest required on the loan. It may be impossible for you to fulfil your loan obligations if your supply of whatever currencies the lender will accept (which does not necessarily only have to be the original loan currency) is limited, but that's a separate issue.
Think of the "Bitcoin economy" as a border-less sovereign country with a floating, fixed-supply currency. This country would still have interest rates, and those rates would still be a function of everyone else's interest rates in a way fundamentally related to the FX rate (complicated, but not insurmountably, by the lack of a low-risk Bitcoin counterparty, thereby holding back the development of Bitcoin collateral and lending markets).