asking this as somebody who has done zero research
what will loans look like on a bitcoin standard?
Discussion
The way it was always supposed to work. Savings based lending. Not debt based lending.
If someone wants to borrow Bitcoin, they have to borrow it from someone else who saved it. Many stupid things won't be able to be funded, such as 100k student loans to study genders.
The way it's supposed to work. 🫡
Most loan agencies will die and only highly scrutinized applicants will get loans.
Lending will not be profitable (it will always be too risky)
Lending will happen between people who care about each other at 0%
And people will take equity stakes in ventures
is there a possibility of trustless loans somehow?
source: am tarded
No because all loans are promises. They rely on trust to be repaid. They are inherently trust based. The only reason strangers give them to strangers today is because the government and Fed backstop the system. Otherwise it would only be people who actually trusted other people.
what about things like smart contracts?
i mean this between two users
doesn't have to be a user and a bank
hodlhodl kinda does this. lend bitcoin overcollateralized, get stablecoins. it will autoliquidate to the lender if margin hits or doesn't get paid back. each side holds a key and hh holds a key. if hh dies, there is still a way for the 2 keys to unwind the transaction.
I misunderstood nostr:npub1t3ggcd843pnwcu6p4tcsesd02t5jx2aelpvusypu5hk0925nhauqjjl5g4
I was talking about loans denominated in Bitcoin
I don’t think there will be many of those
But Bitcoin used as collateral for other lending? That will definitely continue.
There will be an actual market for loans, with supply and demand and risk level dictating the interest rate and terms. Banks will have to be a VERY attractive place for customers to deposit their funds. They’ll need to offer a level of security and a good interest rate to seem better, or at least easier, than self-custody.
Banks will need to clearly state their level of fractional reserve lending so that customers can make an informed decision.
If the FDIC still exists (doubt it) they will have to operate like a real insurance company and not just print money to bail out the over-leveraged banks. Maybe there will be private FDIC-like insurance companies and the banks will have to pay for their insurance.
had to look up what an FDIC is
today i learned
short and productive. anything else will be financed through equity
Depends on how deep you want to go, I think. For example, if A would loan money to B, A can agree that B will pay back then send coins to B. However there is no enforcement. Maybe B can offer some collateral, so you can make an even trade/escrow. I can imagine that there may be a second blockchain that tracks loans such that one can trade/escrow the coins for a loan-record on that blockchain. Therefore, A now has proof. All of the bookkeeping, enforcing, etc. makes things complicated, but loaning is the traditional loaning that everyone knows.
Mortgages on the other hand are more interesting. These are significant sums, but more importantly, it is known that housing prices went up when higher mortgages got more accessible. So if you want to now translate a mortgage to a "loan in Bitcoin", then you run into an issue with how will housing prices respond now that the accounting tricks that made mortgages more accessible may not be equally translatable.
Not an expert, but this is what comes to mind given your question.
