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> Please tell me where does person get bitcoin to loan if they do not have it? As that is what is taking loan is. You're mixing up your terms and that makes it
by latchkey 3y ago
> Please tell me where does person get bitcoin to loan if they do not have it? As that is what is taking loan is.
You're mixing up your terms and that makes it very difficult to understand what you're saying... "to loan" != "taking loan".
Try to think and speak in terms like: lending and borrowing.
When you go to a bank, you use your credit score (and possibly your bank balance) as collateral to borrow funds.
With AAVE, you lend what tokens you have and you can then borrow against what you've lent.
The only difference is that with AAVE, you don't need a credit score or ask for permission from the bank. Anyone can do it globally 24/7. It is pretty clear from your previous comments in other threads, that you had no idea that this was even a thing because you stopped looking into it in 2017. Times have changed and things have progressed.
> I have no money. Where do I get bitcoin worth a house
You have no money, so you're not going to get a house, sorry. Your example doesn't work at all and I don't think it is going to be worth responding to.
- Ekaros 3y agoOkay. We can agree that if future was bitcoin. No one would get to buy house if they were not already rich. As there would be no more traditional loaning. Only new fangled pawning.
- latchkey 3y agoBitcoin or not, rich or not, no one would get to buy a house without money. You obviously have a beef with crypto. It isn't for you. That's ok. My point is to clarify the things you are blindly getting wrong.
- karmakurtisaani 3y agoI think the other commenter means that you could walk in a bank, put down 10% of the house value in cash and get the bank to pay the rest. This way you get a house as long as you can pay back what you owe to the bank. To me it seems from your explanation that with Bitcoin loans you can only basically turn a collateral amount into the same value in Bitcoin, but not leverage the collateral. Hence, it's only useful if you already have money.
- latchkey 3y ago> I think the other commenter means that you could walk in a bank, put down 10% of the house value in cash and get the bank to pay the rest. This way you get a house as long as you can pay back what you owe to the bank. Very much US centric and that's essentially because of Fanny/Freddy and credit reports. That's part of what helped fuel 2008. There are DeFi sites that enable leveraged borrowing, DeltaPrime [0] is one of them. They are just very small today as that is a relatively new technology. [0] https://deltaprime.io/ https://deltaprime.io/