Bitcoin Forum

With the debt crises in the eurozone, bitcoiners have been advocating the use of bitcoin in place of fiat. I don't think that will solve the problem on ground, people will always borrow money whether cash or bitcoins. What do you think?

Its much harder to borrow real Bitcoins you can use on blockchain, as you cannot use fraction reserve principes banks using with debt based fiat currencies (loan much more than they actually have). Bitcoin is different from fiat because you can use only what you really have, or you borrowed the Bitcoin from someone who really had it.

So if most switch to Bitcoin in future because Bitcoin really represent what sound money is all about, debt based systems become unsuistable anymore.

It's hard to borrow bitcoins because if you borrow say, a mortgage of 200,000 and bitcoins triple, sure you may have paid 10,000 bit you now owe 590,000 and the house is still not worth anything close to that.

For short-term loans it's fine (depending on the time period) because it's usually fairly predictable in the sense that a normal swing is about 10%. It's when places get hacked or there's a lot of price speculation assuming it's going to go in because of X, Y, and Z, you have issues with repayment.

Now if you loan bitcoins, but based on a USD / Euro amount, you yourself ar at risk because if the prices go up you might as well have just held onto your bitcoins!

Borrowing bitcoins to pay off debts is not advised in the slightest.
That is like taking out a loan from Peter to pay off Paul. It just doesn't and will not work for anyone who is trying to do that in the long run. You will just end up with much more debit in the end. :-[

Yeah you can't pay debt with debt it's just making the scenario worst.  Think of before you are paying 10% per month when you do this kind of strategy, you will pay twice the percentage because the person who lend you money wants interest too.  Better to work for it and be smart when it comes to debt.

depends on the terms.. if loan based on fiat value.. then taking out a 10k btc loan one year you may only have to repay 5k btc the next year, for every negative their is an equal and opposite positive..

as for other people thinking that loans can only happen if fractional reserves occur, thats wrong. credit unions dont fractional reserve their loans, they use account holders funds to hand out loans.

however there would need to be a way to control debtors who do not repay.. because due to fractional reserves. banks can hand out hundreds of thousands of "credit" because the real cost is only pennies on the dollar. so they have spare profitability to chase debtors, even if they cant get it all back. or even sell the debt out to other agencies. banks will never lose out.

credit unions only hand out smaller amounts and do it locally to reduce the risk/cost of debtor collections.

without a fractional reserve, i do not see "mortgage" size loans being justified. but small daily/weekly expense loans with locals (reduce transport/admin costs) could possibly work, with the right administration and rules inplace to make it efficient and workable

yes because u can see where the money went and

why it didnt come back,

I hate how debt has made the world the way it is.
Bitcoin should be the savior to help take people out of it not make more of it.  :-\

Bitcoin isn't here to pay loans that people couldn't afford neither is it here to pay loans given without any guarantees...

I totally agree with you with that!
Loans are loans and should not be taken out from people who don't have the sufficent amount to pay it back. Or they will just forget about it and default on those loans. :-\

yes because with Bitcoins bad lenders ;) will soon realise something

THEY CAN'T PRINT BITCOIN

Nothing can stop bad debts because usually bad debts are debts taken from people with bad intentions of not paying it back or without being in the position to have a chance to pay it back. Bitcoin cannot change that as bitcoin is still money no matter a perfect kind of money it still cannot remove or stop bad debts. That is something that has got to do with the people rather than bitcoin as form of payment. This will stop when people will know that they can pay back this X amount and only apply to get the X amount and not an Y amount which they know they can't pay back.

It is better to work for it and be smart when it comes to debt. Think before you pay 1 % per month when you do this type of strategy, you will pay twice the percentage for those who lend
money you want flowers too . It is better to work for it and be smart when it comes to debt.

This is kinda complicated, first bitcoin isn't free, so they need to buy it.  Second, debt is debt, you need  to pay it no matter what currency you are using.  And third, it is true, people will borrow money if they need them, irrelevant to what they are using, bitcoin or fiat money.  I think the situation will not change.  Debt still  debt even after using bitcoin.

This forum loan service helps a lot people and offers a good interest. Sure there are several people lending and taking the risks around the lending market, but there are people honest really paying a fee for some loan here, soo sure bitcoin is a powerfull tool, it may help as long you repay your loan.

Yeah right before i loan here and its really help if i need an emergency after few days or 1 week i repay them.. even its a small amount of interest they are happy that we are paying after loan..
Also here in my country we have now loan no need collateral but they need to clarify if you are real human and giving your monthly payslip for yor job before they check and if you are qualified you will receive your loan bitcoin to your wallet coins.ph wallet..

Debts will be always present, including bad ones and Bitcoin can't stop this. But Bitcoin maybe gives some alternative that should be easier available to the people who can now avoid strict conditions and high interests given by the banks and get more affordable loans. On the other side, there is Bitcoins volatility that could get you even in the deeper debt when the price gets high up.

People take loans on this forum, what is stopping banks from giving bitcoins loans in the future only to discover those people can't pay back? Bitcoin is money too you know.

Borrowing bitcoins to pay debts is a really bad idea i think because one day borrowed bitcoins should also have to be returned and in that case if bitcoin price rises too much which is expected then the borrower will be in real trouble and in more and more debts.

Oh yes, it solves many things ... https://www.youtube.com/watch?v=joITmEr4SjY

it was just a stupid action or a game that actually makes you fall when there is no way to cover your debts that have accumulated with great interest.

the point with fractional reserve is important and a big one. This makes it harder for banks to loan money. i see a big problem though, since the banks could not give loans so freely away.
this would mean that some people, who know get a loan to pay back another, could get in trouble by not getting new loans and losing all.

the fact the will only be a limited supply of bitcoin makes a massive differance between bitcoin and fiat.

Well bitcoin would limite all the places where politician could steal money, soo the bitcoin system wouldnt never work, its an amazing video content worth to watch and think about it, the gold limit in the past were really amazing, but there were fees being paid in gold, maybe before the printed money came to live.
The thing is bitcoin can let anyone to get and earn an extra income soo, people could easy pay their debits, but they wont do.

Bitcoin could be used as a store of value if fiat has high inflation or the banks have a risk of closing. In this way, it can be beneficial for countries with financial issues.

not all people borrows money or borrows bitcoin, and i think if people not just borrows money and bitcoin, they can exchange their bitcoin if they have much into their money currency so they can start to saving. like my friends, he started on business with bitcoin, he buy and sell bitcoin, and while he get much bitcoin and the rate bitcoin-usd is high, he sell his bitcoin and he do saving on his banks, and now he can build home for his family.

Bitcoin can't stop the debts, you must need to understand about your word. debt's about the someone needs. and that is natural. if you wanna stopping debts maybe you can offer your bitcoin for free into the people is need a money and your will prevent them to asking about debts.

Bitcoin is just another type of currency or payment option and it cannot change human behavior. The world economy are being fueled and stimulated by debt, and the governments knows this. They are building a fake empire on a bunch of debt, and this foundation will soon collapse, bringing the whole economy down with it.

They can shift this debt to Bitcoin based technologies too, without having to make too many changes to the Blockchain, and if they do, we would be in the exact same place. ^hmmmm^

bitcoin may not stop bad debt ,but habits can stop bad debt , it is common for bitcoin or fiat or any currency , if you are on debt first control the spending . and also you need to work for some jobs to get rid of that . first thing is to clear the debt with which are having high interest rate .Calculate income and outcome .

I think bitcoin can help people to feel secure and their money in their hand. And with bitcoin they don't have to depend upon banks security or other bullshits those banks ask about your transactions. But i don't think bitcoin can stop bad debts.

I have encountered quite a few who have defaulted on their loans and have their names blacklisted from other financial institutions. I wonder if bitcoin existed earlier, would the world have caught up with it faster? Or is it because of technology limitations, that we are being held back from widespread use of bitcoin, both as currency and investment?

There's no crises, Euro is fiat, they can just make a shit load of it, and they are doing it, Euro is being pumped into the eurozone economy like there's no tomorrow, debt is at its highest and things are getting better.

Sovereign debt means nothing, they can always make more money.

Of course it is not realistic to assume that Bitcoin will end bad debts, because Bitcoin won't change human behavior. People / governments will still try to live beyond their means if they find "investors" that will lend them more money. However Bitcoin makes debt service harder, because it makes currency devaluation impossible and therefore might discourage excessive lending.


The advantages of Bitcoin compared to fiat are clear: Bitcoin is not subject to inflation through excessive money creation. Any holder of Bitcoin will profit from this.

ya.ya.yo!

There's no bad in borrowing money. It depends on how you will handle it. BTC or cash because you can pay back those you borrowed in time if you have hardwork and you make you borrowed cash or BTC in a productive way like investing and trading. the profit you earn can be the payment for the one you borrowed.

I think so too. Whether its bitcoin or fiat, people will still borrow it because you can purchase goods whether its fiat or bitcoin. Well bitcoin may still need to be converted to fiat to buy the things that they need but nevertheless it is still money so it will not stop bad debt. What people need is money management and it does not matter whether its digital or fiat money because both can be use for spending, investing, or saving.

borrowing money is not bad, but with bitcoin you really have to have the money that you want to borrow. i can not write you on a paper that you have x bitcoin. i have to have them and then give them to you.
today banks operate in a way, that they do not have the money that they borrow you. they just make the money up out of thin air by simply adding it to your account.
that is quite a difference.

Actually, the basic principle is quite the same. Even when a bank creates the non existing money and add it to your account, you can still withdraw it in cash form since the bank in question has enough cash reserves to do so. What's the difference if you place a Bitcoin exchange in the same situation? They can also just create non existing Bitcoins and add them to your account. But with enough cash (Bitcoins in this case) reserves, the exchange can still pay you out by sending the coins to your wallet. The main difference is that banks have a "backdoor" to the government in which they can basically borrow endless amounts of money. With Bitcoin, the exchange acting as bank will run out of coins.

two things.
1. i was under the impression that an exchange (serious ones, not those who want to scam you) has the actual bitcoins they store fore the costumer. maybe in cold storage or some place else, but they could pay every costumer in the event of a "bankrun".
2. an exchange has no possibility to create new bitcoin, like the banks can create money. an exchange could "create" bitcoin by just writing some amount down in a costumers account, but this does not create new bitcoin, this would only create some digital "i owe you" which would be worthless, since another exchange would give you nothing (or at least no bitcoins) for it.
a banks "i owe you" is worth the actual amount and another bank would pay it out for you.

   

With Bitcoins capability of being used anonymous this can actually increase bad debts. Just look at the lending section, how many defaulted loan because they thought it will not have a direct affect in their real life credit score. if you are earning in Bitcoins as a side job maybe yes it can help but not thoroughly eliminate or help bad debts.

I think it has the potential to change the world and the idea of debt based economy itself, it might not be so good in person to person lending but on broader aspect I think it would change the way the economy looks.

There`s no way that bitcoin or any other currency can stop bad debts.

Bad gebts have nothing to do with bitcoin and btc is not the solution for this problem.

The european economy needs to start growing.

If its people debts then they must earn for it too. It is the same with fiat if they owe the government or the bank money then they will get a job to pay it.
There is no exception in bitcoin. To pay is to work for it. But if are saying paying through bitcoin then why not just cash it out or exchange it to fiat. It will also be the same.

stupid action? in my opinion bitcoin cannot stop the debts and such stuff until our whole financial system wont fall

Bitcoin can help anybody to negotiate with the bad debit, sure it wont fix those issue for sure. Bitcoin allows anyone to get an extra source of income, but if you arent able to deal with your debit, for sure bitcoin isnt the answer to your problems.