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But that’s coinbase being a bank, not BTC. There are coins that have loans via smart contracts, but they aren’t BTC. What’s happening here is closer to "An exch

But that’s coinbase being a bank, not BTC. There are coins that have loans via smart contracts, but they aren’t BTC. What’s happening here is closer to "An exchange is offering banking services" which sounds a lot less weird.

notahacker 6y ago
But the real question is why this particular banking service exists? If Bitcoin is the stable currency it was designed to be, then it would be nonsensical for a person already holding it to borrow 30% of its value in USD at 8% APR. The answer of course is that some people are so convinced that BTC will rise in value by more than 8% over the loan duration they're prepared to go into debt to keep large portions of their net worth in it, and some might even fancy buying more BTC with the cash they've borrowed, and maybe borrowing against that too. In this analogy BTC isn't the bank, it's the houses people were taking out the subprime mortgages on (minus the upside of avoiding rental payments)
- deleted 6y ago
  [deleted]
- Semaphor 6y ago
  > If Bitcoin is the stable currency it was designed to be, My impression is, that this is a pretty contentious statement ;)
  - chii 6y ago
    but bitcoin wasn't designed to be stable (or unstable). it was designed to match the properties of gold, but digitally. I think it has somewhat succeeded.
    - maps7 6y ago
      Bitcoin was designed to be a Peer-to-Peer Electronic Cash System
  - anon9001 6y ago
    1 BTC is still worth 1 BTC. Seems pretty stable to me.
    - drdeca 6y ago
      This doesn’t really work as an argument. Obviously the thing to look at is the purchasing power. If the amount of bread, industrial equipment, and land, that you can purchase with a given amount of currency A, varies much more than it does for currency B, then the purchasing power of currency A varies much more over time than that of currency B. This is obvious.
      - uoylj 6y ago
        How exactly does a currency go from a value of zero to trillions (were it to become a major global settlement currency) in a decentralised way while maintaining stable purchasing power? That would imply that since it was worth nothing in 2009/2010 it should remain worthless forever to maintain its purchasing power.
- solotronics 6y ago
  Loans aren't subject to taxation in the US.

notahacker 6y ago

But the real question is why this particular banking service exists? If Bitcoin is the stable currency it was designed to be, then it would be nonsensical for a person already holding it to borrow 30% of its value in USD at 8% APR. The answer of course is that some people are so convinced that BTC will rise in value by more than 8% over the loan duration they're prepared to go into debt to keep large portions of their net worth in it, and some might even fancy buying more BTC with the cash they've borrowed, and maybe borrowing against that too. In this analogy BTC isn't the bank, it's the houses people were taking out the subprime mortgages on (minus the upside of avoiding rental payments)

deleted 6y ago
[deleted]
Semaphor 6y ago
> If Bitcoin is the stable currency it was designed to be, My impression is, that this is a pretty contentious statement ;)
- chii 6y ago
  but bitcoin wasn't designed to be stable (or unstable). it was designed to match the properties of gold, but digitally. I think it has somewhat succeeded.
  - maps7 6y ago
    Bitcoin was designed to be a Peer-to-Peer Electronic Cash System
- anon9001 6y ago
  1 BTC is still worth 1 BTC. Seems pretty stable to me.
  - drdeca 6y ago
    This doesn’t really work as an argument. Obviously the thing to look at is the purchasing power. If the amount of bread, industrial equipment, and land, that you can purchase with a given amount of currency A, varies much more than it does for currency B, then the purchasing power of currency A varies much more over time than that of currency B. This is obvious.
    - uoylj 6y ago
      How exactly does a currency go from a value of zero to trillions (were it to become a major global settlement currency) in a decentralised way while maintaining stable purchasing power? That would imply that since it was worth nothing in 2009/2010 it should remain worthless forever to maintain its purchasing power.
solotronics 6y ago
Loans aren't subject to taxation in the US.