They would need to charge at least 75% per annum in interest on the debt, to even have a chance of breaking even.
Which means you loan them 100 BTC and they pay you back 1641 BTC after 5 years, and you have no profits.
Try to find someone dumb enough to agree to take that loan.
You're like wow, these stupid religious people don't understand how great interest-bearing credit is. Why should they change that under Bitcoinization, just cuz their faith makes them totally regarded?
No, you are not willing to do the math. Bitcoin determines what form of financing makes sense and it is the anti-credit money. If you want to offer credit, then you will have to do it in a softer money. But why would the workers and suppliers accept your soft money, when some other group is like, Yo, we'll pay you 100 Bitcoin!
Yes, the people who offer Bitcoin will always have the advantage. Cry harder.
essentially, a hard credit system depends on people having savings, and keeping savings depends on the money not being inflationary
so, if you have a system with a non-inflationary money, you can't toy with credit unless you have high confidence and a big reserve to back your ass up when your bet goes south
we'd get rid of the entire VC fluff and endless makework and people wasting their time on highly speculative bets if we had hard money, and that would result in ... more results, instead of people getting paid to do something nobody is ever going to pay for
this is amply elaborated in Mises' book Human Action by the way
savings are an essential part of a healthy economy and with fiat money there is none, and so it's brittle and unstable, and ultimately unproductive
I'm well aware.
How an individual chooses to use their hard-money savings is up to them, including loaning it to others with an agreed-upon interest rate in a free-banking system.
Interest payments are merely the price of the "service" of acquiring access to capital (real, saved, hard money) sooner rather than later.
Yeah, you know people contributing 10 BTC aren't going to be passive, indifferent investors. They will be construction site tourists. They will expect regular tours and published accounting, monthly meetups to track progress and find out what the next steps are or what difficulty is underway.
People who invest their own hard-earned money really care. And that is the way it should be. We should not all be holding ETFs full of shares from companies we've never heard of that build stuff we don't care about.
Stock market circus and derivatives nightmare over.
and we are seeing this play out with nostr development, it's a beautiful thing
💯 Everyone who is funding or working on projects is highly invested in the development here, which is why so many of the most-popular accounts here are dev accounts. People want to hear about the new button or how you fixed the menu item bug and added some new feature.
People pay real money here. They ain't playin.
Compound interest enslaves people - pure and simple.
If you can't afford it...save the money, then buy it.
But DON'T take out a loan, and pay interest on it...
(And don't get me started on fractional banking--which relies on interest bearing notes)
Fr. Maybe you just can't afford a cathedral and you need to get over it.
Or you need to build one out of wood, cuz it's way cheaper.
Or you just get a chapel, and that is also nice.
Live within your budget, instead of pulling income forward with interest. That is spending future income that may never exist.
In a hard-money, free market system, the money represents real resources (this is a good thing. we agree).
In order to loan someone money, you would have had to save it first, representing a a deferment on claiming the real resources (this is what savings is). The monetary supply is unchanged throughout this process. We're not getting anywhere near fractional banking, don't worry.
"If you can't afford it, save first" sure, this is a choice someone can make. And a fine one.
But so is "the timing matters to my enterprise and I suspect I can do even better if I start today with a loan. If I start _now_, my expected revenue will more than cover the interest payment".
Why are you so insistent that an individual shouldn't make that choice for himself and his business?
The only "Bitcoin loans" we've had so far were unbacked. They just sold the Bitcoin, traded altcoins, and then tried (and sometimes failed) to get back into Bitcoin when the loan came due.
One collapse after another.
Wait what
These are the sort of "returns" you have to beat with your investment. It's possible, but highly unlikely.
Here, you go, five years. Beat 484% increase. Have fun. 😅
This entire debate is pointless. Hardly anyone can beat Bitcoin saving in returns. Nvidia, maybe, and that only once. Not 5-year span after 5-year span after 5-year span after...
bitcoin is a demonstration of what a hard currency can do
it's better than the best speculative investments
the biggest lie of fiat economists is that having a stable baseline metric doesn't help people make better decisions
and this is also the exact same thing with morality
build your wibbly wobbly church on opinions and consensus and you are screwed, long term
I bet Nvidia stonk was money laundering crypto gains 💯
Everyone who isn't hodling Bitcoin is going nuts, trying to keep up.
If you could generate enough profit within 5 years, to cover a loan that big, then you still wouldn't need a loan or equity sales. Just promise people part of the profits and they'll chase you down in the street, trying to get a contract.
Try changing the chart to compare bitcoin to boitcoin. then we can stop getting distracted by this tangential chart and return to the actual conversation: the ethics of lending.
That would eliminate the rise in purchasing power of the Bitcoin over the term of the loan.
The rise in purchasing power of Bitcoin **with respect to the Euro**. lol, right! That's my whole point.
You're just making an argument about sound money vs fiat bullshit. If that's your only point, we simply agree. But you've somehow taken that point and wrapped it in a false argument about lending. Either you are making an argument about lending itself (in which case you should pick a single monetary context and stay within it), or you are merely re-stating the sound money thesis in an irrelevant costume (lending).
Like I said. You think Bitcoin purchasing power will only increase against a fiat currency, and that it is not a core aspect of the currency, that the new supply unlocked steadily shrinks, while the economic activity covered expands, causing a steady rise in purchasing power, for the rest of our lifetimes.
You are completely misunderstanding and misrepresenting me.
I'm not endorsing fiat money or fractional-reserve banking.
I'm endorsing free banking on a free market with real, hard money (Bitcoin). In free banking, individuals can choose to save or choose to take loans (which are other people's _actual_ savings - real claims on real resources) + interest for the service of acquiring resources sooner rather than later.
You disagree about the **ethics** of interest. That's all. It's completely disingenuous for you and nostr:npub1fjqqy4a93z5zsjwsfxqhc2764kvykfdyttvldkkkdera8dr78vhsmmleku to start to insinuate that I'm a proponent of fiat banking.
Also, you are basing your lending argument on comparing Bitcoin to fiat. That's then not an argument about "lending" itself (in a hard-money context), nor the ethics of interest, it's just pointing to the fact we all already accept: hard money is better than fake money.
Yes, great, agreed. That's not what we were debating... You've veered this into a weird territory and those not paying careful attention are getting the wrong idea.
free banking, fiat banking, same stupid game
it's not the ethics of interest... islamic halal loans and jewish kosher loans are contracts
terms are set in stone, until the escape clause is triggered
any variable interest rate destroys that and incentivises one party to base their offers on contracts that put them in control of that rate, and then they can never lose
that is the problem, and if you don't understand how fundamental that is to the fallacy of fractional reserve banking there's not much more for me to say except think about it a bit more
Fine. What about a fixed interest rate? Do you have a problem with that?
if it's in the contract, and it can't be changed without bilateral agreement, the interest is fine, it's baked into the deal, it's essential to the economics
you defer future gains to give someone a chance to produce better gains than you estimate you can make
that's a halal contract, and that's not what any kind of fiat money finance is about
But that (fixed interest rate loans) is all I've been talking about.
Yet you and nostr:npub1m4ny6hjqzepn4rxknuq94c2gpqzr29ufkkw7ttcxyak7v43n6vvsajc2jl have been shifting the goalposts and straw manning like crazy to make me out to be a fiat lunatic.
If you agree there is nothing wrong with freely-agreed upon fixed rate loans, then we agree and we can finally shut up. The issue started when nostr:npub1m4ny6hjqzepn4rxknuq94c2gpqzr29ufkkw7ttcxyak7v43n6vvsajc2jl seemed to allude that "any interest rate == usury"
fixed interest rates are fine, did i say they were not?
just the reneging is not ok, and that's the essence of what usury means, it's a form of theft
Nobody said that we consider them usury. We're neither Jewish nor Muslim.
I picked the building of a major road with a bridge, to illustrate the sort of project that would be difficult to finance by private interest-bearing loans. In the near past, they were financed by the state and the money was simply pressed out of the populace through taxation or through cheap loans to the private builders that were supported by inflation.
That said, full-recourse loans (as opposed to something backed by collateral) are a form of indentured servitude, if they cannot easily discharge the debt. Mortgages (except the ones that allow you to walk away and leave the key) and US student loans are typical non-dischargeable, full-recourse loans.
I did not say that. I wrote an entire wiki article describing what usury is and said that I am generally against charging interest. That is because fixing the interest and then fiddling with the monetary supply, so that inflation/deflation effects the returns, is how they get out of the clause through a back door.
They can't do that as easily with Bitcoin. So, tell me how that makes sense in a rapidly deflating currency on a mid-term or long-term contract?
Obviously, it is possible for a week. Maybe a month, for a small loan.
But... 1 year? 5 years? 10 years?
No. It is economic nonsense.
I think aside from her moral beliefs, Laeserin's mathematical point is you can't denominate loan interest in Bitcoin because it's so deflationary and you can't really expect profit on loans under the early years of a Bitcoin standard for the same reason. Equity investment might be profitable but lending becomes a charitable act while there's such a deflationary currency available. Anyone borrowing 10 BTC will have a hard time returning 10 BTC while each Satoshi is gaining value faster than the rest of the economy's assets.
this is something that modern people barely even understand
until you have worked for a few asshole employers, then you learn a nice and important fact about contracts
unilateral binding in contracts is a violation of contract law
that is, if the asset being handled is not bilaterally handled, it is slavery
this is why at any point in an employment contract you can just walk out and sign off and trigger the escape clause
what fiat and free banking fractional reserve contracts do is make it so that one party does not have the right to cancel the contract when the other party changes the terms
that is a violation of contract law, it is not honoring your word and it is essentially deceit
You are trying to explain why the hardest money ever invented can be used to create a system of interest-bearing loans. Yes, it can. People can do anything they want.
Why don't you go set up a Bitcoin bank that lends out the principle for large projects and receives the principle+interest back and consistently beats hodling? Show us how its done.
Doesn't make practical sense while fiat money is still so broadly accepted. Because as you point out, the gains of "just holding" are better.
But that won't always be the case. On a Bitcoin standard, those "nosebleed" gains will disappear.
And you will once again have people seeking investment for projects they don't have the savings to start on the day they want to start it.
The core disagreement between the two of you seems to be over how deflationary Bitcoin is under a Bitcoin standard
To you, the Bitcoin standard hasn't started until we finish the wave of adoption driving value to increase
To Laeserin, we're already in the early days of the Bitcoin standard
No, we are disagreeing about whether Bitcoin is even a deflationary currency. Even a rate of 20% would make almost all lending unprofitable.
Couldn't deflation get below 20% someday though? I'd imagine it stabilizing someday to deflate by as much as gold and silver inflate, maybe times two for lost keys, that's still probably less than 10% a year
Yes, humans could die out so fast that BTC deflation slowed or even reversed.
Or a competing currency could take part of the monetary demand. A gold coin or CBDC, or a US treasury bond giving 40% rates in WW3, or whatever. That's what they're trying to do, now. Take away demand for Bitcoin with an inflationary money, to make interest-bearing credit great again.
Sorry but if humans are dying out we're gonna have algorithms printing money and posting new all time high trades on those tickers on the outsides of the buildings on wall street just like when life signs could be detected in new york city
I humans were dying out that rapidly, there wouldn't be any point in investing, as goods and resources would just be lying around, waiting to be used. People would revert to scavenging and most advanced civilization would decay.
Not the way things are headed. It's simple statistics, everyone is moving out of New York because it's becoming such a police state and corporations are taking over. If you graph the trend out into the future it projects that the last 100 people in Manhattan will be a tribe of NYPD officers answering to a mayor chat bot that has them drink Kool aid after all the server racks have been moved to the top floors for sea level rise
Hahahahahhaaha
As a friendly thought experiment, how would you make a profit in lending bitcoin given a 20% deflation rate? If you were tasked to do such a thing, how would you achieve it?
Lend to the US government at 21%. They always get their money.
why wouldn't I just loan to a well-positioned startup at 21%?
you're saying that 21% is effectively 1%, right?
Because you risk the loss of the principle and the principle is tied up for X years, for a measly 1% return. That does not cover the risk premium.
You need some nearly-guaranteed returns, like the US government can give because they have the monopoly on violence.
So charge 27%?
Haven't you just redefined the base rate?
No because she's not a central bank so even if she's guessing right she can't guarantee profits for herself and her cronies by changing it again on a whim
If I'm getting what she's saying
Like, with no party running the circle of monetary flow, no debt system can really be stable
"[...] This division of labor benefits the saver by delegating to the bank the task of successful forecasting – in which the saver may have no skill or desire to perform. Delegating the lending to the bank would in most cases provide the customer with a more secure investment than if he were to lend the money out himself on the basis of his own judgments of entrepreneurial success
...
Interest payments primarily are paid for the service of acquiring access to capital sooner rather than later
...
Bob has deposited money in a bank that will invest it in projects for him. it promises 5% interest.
Joe acquires a loan for 100 dollars + 10 percent interest from this bank. [after some time]
Joe has responsibly paid the bank the principal of his loan (one hundred dollars) along with the ten percent interest (ten dollars). The following month, Bob arrives to collect his investment, at which point in time, the bank may return to Bob his principal and interest or offer to keep the funds and renew the lending agreement. Even if Bob refuses the offer to continue and decides to collect his funds, both parties benefit as both parties become five dollars richer. Even Joe the borrower benefited by gaining access to capital needed to start his small business sooner as opposed to his waiting later. Perhaps starting the business at that current point of time was crucial to its success"
Who did anything about guaranteed profits? No profits are ever guaranteed. That's what separated the successful from the successful and insured society is benefitting from people's endeavours.
🏦
Wow sorry, billions of typos! Fixed:
"Who said anything about guaranteed profits? No profits are ever guaranteed in a truly free market. That's what separates the successful from the unsuccessful and insures value is delivered to society from the efforts of the successful"
Banks are just gonna prefer equity for a while I'd bet
