Another point to think about, when bitcoin is understood by the masses, it’s likely because they’ve watched their fiat be destroyed by inflation or they’ve witnessed the total collapse of banking due to extreme deflation.
In that world, who wants to own fiat long enough to deposit it in a bank so that the bank can loan it out to a borrower?
In time, I think people live in a bitcoin only world. As it’s not possible for credit to exist on bitcoin, people won’t be able to borrow. Therefore, investments will be made by people that are prepared to lose their own bitcoin. This should hopefully mean less malinvestment overall and the ideas actually benefiting from investment will be making the world a better place
If you want to understand why credit needs to be priced higher for lower scoring people then this should help:
A Credit Risk Analyst’s Journey into Bitcoin https://medium.com/@kris.john.adams/a-credit-risk-analysts-journey-into-bitcoin-c035ec86ba1
This is a dangerous move!!
I tell you what, before I go for a new mortgage, why don’t I just default on all my debts so I can lower my credit score and get a cheaper deal at the expense of a non-defaulter?
If this doesn’t tell you the system is broken then I don’t know what will!
Retail credit will not exist on Bitcoin. Essentially, the Bitcoin protocol, which programmatically created a sound monetary system, will reprogramme the world and how it thinks about money and credit.
Nothing to see here - our financial system is absolutely flourishing 😖
I noticed today that Xapo Bank are offering Lightning payments. I’m on board with this and congratulate them on being the first.
However, I notice they offer 0.1% on your bitcoin deposits. This is not possible on a finite asset like bitcoin unless:
1) they are taking risk with your bitcoin and you stand to lose some or all of it. Hard to quantify without knowing what they are doing behind the scene.
2) they are taking risk with the USD deposits, as normal banks do and they are using any gain to purchase your 0.1% return. In which case your 0.1% is NOT guaranteed!
I’d rather 2) than 1), but because I don’t know which they are doing I would not deposit my bitcoin with them.
People need to be happy with just owning the bitcoin they have. It’s not worth the gamble for more!
In this paper, I try to explain as simply as I can how a bank functions and how they assess your credit risk when making a credit application. I then use this information to try to assess the UK budget from my own perspective as a retail credit risk analyst. Finishing with why I’m buying bitcoin.
In doing so, I hope to give the reader a simple way to assess the credit risk inherent within their own government’s budget.
Caveat: I’m not a writer so I may not have hit the mark…yet!
A Credit Risk Analyst’s Journey into Bitcoin https://medium.com/@kris.john.adams/a-credit-risk-analysts-journey-into-bitcoin-c035ec86ba1
#[0] - in Edinburgh, on our walk to the pub I told you about how I educated my wife on bitcoin with Sunday Cheese and Wine nights. Well I thought I’d go one better and try and educate more people on my journey to bitcoin. Thanks for the inspiration!
A Credit Risk Analyst’s Journey into Bitcoin https://medium.com/@kris.john.adams/a-credit-risk-analysts-journey-into-bitcoin-c035ec86ba1
Can’t get reliable supplies of fruit and veg here in the U.K.
Seems like supply lines might be starting to fall apart.