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> people making investments with bitcoin backed loans There already are Bitcoin backed loans offered by both decentralized services (like Aave, Compound, Maker
by gge 6y ago
> people making investments with bitcoin backed loans
There already are Bitcoin backed loans offered by both decentralized services (like Aave, Compound, Maker etc) and centralized services (like BlockFi, Celsius etc). They get real usage. Aave, Compound and Maker have $17B worth of crypto deposited in them as collateral. BlockFi has a $2.85B valuation.
- morpheos137 6y ago>Bitcoin backed >$17B worth of crypto. Ah, so there are Bitcoin "backed" loans but they are denominated and paid in dollars. The supposed "value" of Bitcoin in dollar terms is what serves as collateral for these loans. Here is a hint: price does not equal value, especially when it is as volatile as BTC price is. So essentially these are unbacked loans... If BTC eats the dollar in the future, e.g. under USD hyper inflation, then BTC x USD creditors are still screwed like all other creditors lending dollars. Their debtors will be able to pay the loan back with depreciating dollars.
- gge 6y agoIf you think Bitcoin has no value, why not short it? Bet on your beliefs. I think it has value, which is why I'm long. Skin in the game > debate
- piva00 6y agoBecause the old adage of markets can stay irrational for longer than most people can remain solvent. Betting on a short (even more against BTC) is a very different proposition than staying long on it, they have very different risk and losses profiles.
- gge 6y agoTrue. But in this case the guy doesn't just think that Bitcoin will go down, he thinks it will go down to 0. If you think its literally worthless, shorting could be a pretty good bet.