I'm beginning to think that the normalization of interest bearing loans is the most harmful aspect of any financial system.
Interest mathematically results in slavery under hard or soft money.
Discussion
Interest based lending can exist in a free market though according to Mises
It may exist in a free market, but ethical lending would never involve usury.
If only they wrote about usury in really old books
I think this was written in a book a couple thousand years ago
What's the current interest on borrowing bitcoin? I'm struggling to find this information.
I think there's a company called ledn that does fiat loans backed with btc, but I haven't come across any btc loans yet.
Technically the ETFs can loan out the BTC they are 'holding' but surely that won't be publicly reported.
Thanks. I can borrow fiat money either way. It's how I and anyone gets hold of fiat money and why we have a fiat economy.
I have a credit score and it's great.
Why can't this be done with Bitcoin. Wouldn't that be the first thing a currency would have to allow.
Under a fiat standard interest is charged on debt created out of thin air. This inherently requires the creation of additional money to pay the interest, leading to inflation.
Under a bitcoin standard interest would be charged on a finite asset which causes the debtor to chase an ever growing financial burden.
Neither scenario is conducive to a fair, just, or ethical society.
Both result in money lenders turning the rest of the population into serfs or debt slaves.
The alternative would be to loan bitcoin for a percentage of the enterprise being proposed. This aligns the incentives of the debtor with the debtee and does not result in debt slavery.
No, under fiat you don't need to print extra money for the interest, the debtor just needs to perform some extra economic activity. The interest money comes out of extra cycles in the circulation.
The interest is a consequence of time preference and not a bug of the system.
Inflation rewards keeping money in circulation instead of hoarding it.
Without loans the economy would move incredibly slow. I can get $10k or $20 instantly tomorrow from the bank and much more with some formalities.
If I had to earn the money first it would take a long time.
That the government can lend money into existence is an additional feature in addition to bank loans but not a requirement of the system.
If you can't borrow Bitcoin, people and businesses would have to use what little they have.
Also deflation encourages hoarding which will remove more Bitcoin from circulation which reduces the Bitcoin supply for the economy which causes more deflation in a vicious cycle.
We all understand that and see that bitcoin is doomed from the get-go, in addition to all the implementation problems.
No Bitcoin person has ever attempted to run the tiniest of business. Not even a cafe at the corner. That's where their delusions come from.
Silvio Gesell wrote about all that in The Natural Economic Order.
This is not an argument. Have a good one
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