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And here's the thing I really don't get:

The loan is only worth it to the person taking out the loan, if he can earn 60 BTC in today's money from the tolls. If it's been 6 years and deflation in consumer prices was 10% per year, then you have to actually pay back the equivalent of 80 back-then BTC.

Who in the world would take that loan? That is madness.

And, now, imagine deflation is over 10%...

What am I missing here?

f0xr 1y ago

The project might not be a good allocation of resources. Under a sound money standard, that becomes obvious quickly. If it can't produce enough profit from tolls to repay the loan, it's a poor use of resources. The market is telling you that people value something else more than they value the bridge. Maybe adding a second ferry to reduce the wait time is a better allocation of resources?

We've been brainwashed by fiat economics to see any infrastructure or any business that "makes money" as productive. Without the ability to finance those things through inflation by issuing debt, only projects that provide a lot of real value will be able to get financing.

Anything else will have to be paid up front, by someone who values the project for other than purely economic reasons.

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Laeserin 1y ago

That was my point, but it got shot down.

I was like, maybe renovating a church building won't net money, but the people in the church would still be willing to pay for it because they want to be in a building where the roof doesn't leak.

Maybe the town wants to have a nice bridge, for the prestige and to drive more traffic to the town, so that they make money indirectly.

A lot of the stuff people currently get loans to do wouldn't net enough money to make lending profitable, but people could keep doing them.

You can see that on here. We all keep sinking hard money into the development, but nobody is willing to go into debt for it, even under fiat, because you can't make money off of Nostr. But we want to build it all, anyway, so we just swallow the cost and hope for the best.

Imagine if the developers all had to repay the Bitcoin to OpenSats, with interest. 🤢

Laeserin 1y ago

But, again, you're assuming that, if the people who drive over the road won't pay high tolls, then it's a poor use of resources.

But the people building the bridge do not think it's a poor use of resources, that's why they want to pay themselves, to have it built.

Using resources well doesn't always require someone else's willingness to pay me money to do something. Nobody has to be willing to lend me Money to eat a sandwich and I don't need to charge people to watch me eat it, for it to be worth eating. I'm hungry. I want a sandwich. I lose the money on the sandwich, but that is okay because I'd rather lose the money on a sandwich than stay hungry or eat plain bread.

Do I need to prove that a house or a car is worthy of a loan? No, I can just save up money and spend it, building a house or driving a car.

Once you look around, you will see that most things that currently receive loans will no longer receive them. Or so I thought. 🤷‍♀️

Laeserin 1y ago

Almost everything done is for consumption or common use, and not for profit.

Laeserin 1y ago

Even a lot of businesses only exist because the person who owns them or the people who financially back it want it to exist. There is no expectation that the business will turn a profit, often just that the running costs are covered. People just want to have a nice gathering place in the town, a small grocer in the village, a relay everyone can write to, or a school canteen with healthy food for the children.