Is Bitcoin the future of loans or just pocket change charity?

[di4biz]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

[john_egbert]

What would the Internet give you if you asked that question right away?

[Z-tight]

The banks are centralized and regulated, and to an extent controlled by the government. There is a central authority in control that runs the business of giving loans to earn profits from the interest upon repayment.

If you understand BTC well enough, how can you think it would replace such a system. There is no central authority in control, so who's going to issue loans or mortgages. In the BTC network you are your own bank, so if you decide to create a system were you loan out your own coins for interest, it is up to you and you bear the risks involved.

[FortuneFollower]

The banks are centralized and regulated, and to an extent controlled by the government. There is a central authority in control that runs the business of giving loans to earn profits from the interest upon repayment.

If you understand BTC well enough, how can you think it would replace such a system. There is no central authority in control, so who's going to issue loans or mortgages. In the BTC network you are your own bank, so if you decide to create a system were you loan out your own coins for interest, it is up to you and you bear the risks involved.

I agree with that.

It would be a P2P loan, so to speak, you are on your own if you do such operations without a mediator.

 

[hyudien]

Bitcoin isn't ideal for traditional loans or mortgages, at least not in the way banks do. Why? First, volatility; with Bitcoin price constantly fluctuating, it's unsuitable for long term, scheduled loans, where predictability is crucial for both lenders and borrowers. Finally Bitcoin can't be controlled by any authority, a unique feature we've been championing for so long. Therefore I can safely say that Bitcoin isn't designed to replace banks in traditional lending.

[Oshosondy]

So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

Bitcoin is an alternative and not a replacement, so are other means of getting loan. They will all be alternatives to fiat and not a replacement because there is nothing that can replace fiat.

I do not think bitcoin is good for loan because someone that loan money is in dept and some people can find it hard to pay such dept back but if the price of bitcoin increases, it will become more difficult to pay. I prefer using fiat for loan but bitcoin can be good when the price is significantly high already.

[Don Pedro Dinero]

So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

No, on the contrary. What is going to be set up, and has already begun, is an entire financial services industry around bitcoin in which you can contribute your bitcoin as collateral to obtain loans (but remember ‘not your keys, not your coins’), just as products such as securities have been created, such as those launched by Strategy, which are a kind of corporate debt to capture market share in financial markets currently occupied by bonds or dividend-paying stocks. So it's all much more complex than you're thinking.

[justinlamode]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

Every loan require some level of assurance that it will be repaid or recovered, that can be in the form of collateral which can be in the form of Bitcoin, other cryptocurrency or something of value that can equate the amount being borrowed. I don't think Bitcoin can be addressed as the future of loans because most people are yet to accept it as collateral due to legalisation challenges and the few countries where Bitcoin can be used as collateral, people prefer physical assets such as real estate to Bitcoin. It will really take a long time and process for people to willingly accept Bitcoin as collateral for loans.  

[Hewlet]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

Does this not look like a newbie question? that the forum does allow for loan does not mean that the whole usefulness of bitcoin for for such purpose and just for whales to make use of. on the forum, before you are eligible to get any loan, the collateral that you must have is being part of an active signature campaign which means that for those that are not in a signature campaign, they can not take up any loan and will have to opt for banks as the option to get the loan from.

bitcoin was never created as a substitute to the the banking system. the population of users that do not have access to the forum and bitcoin in general far outnumbers those that have access to it and so, it is not even reasonable to assume that bitcoin is a replacement to the fiat in terms of using it to take up loans.

[hd49728]

So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

Big players like Do Kwon and Sam Bankman-Fried, do you mean them?

These big players bet big, took super high risk, were stupid with their greedy dreams and they were all imprisoned. It's not worse, and the worse things are these men caused terrible losses to many people who believe in Terra, FTX, and stored their money on Terra, FTX or invest, trade, catch the dead cats when LUNA, UST and FTT tokens fell in their dead spirals.

Bitcoin does not need big players like Do Kwon and SBF.

[BIT-BENDER]

Banks has not yet started accepting Bitcoin into their services on a large scale so for now this is not a popular service that banks offers.
If banks start to adopt Crypto-currency into their system for sure they can offer loans in form of Bitcoin to people, but will that hinder you from not taking a loan? You can take up loans in Fiat and use the Fiat to buy Bitcoin. Although you should know that you should not used borrowed money to invest in Crypto-currency the market can be volatile.

[Bright0515]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

Bitcoin was not made to replace traditional currencies and their banks, governments are responsible to control the traditional currencies and banks because they are centralize but Bitcoin is decentralize and that is why the government can not control it. Bitcoin is not going to replace them in the future or now because Bitcoin is not acceptable in all the countries in the world. Bitcoin is just a digital assets, it get more valuable in the future. Anybody can loan out their Bitcoin as business but it do not mean everybody will do so.

[9ja Amaka]

I agree with that.

It would be a P2P loan, so to speak, you are on your own if you do such operations without a mediator.

 

There are many platforms that offers P2P loan in Bitcoin.

Eventually they have found a way to harness the risk of losing your fund to borrowers. Not it is safe to offer a loan in those platforms, because they wont give the loan out if you dont have an asset or something to be held as a collateral.

[asriloni]

If you understand BTC well enough, how can you think it would replace such a system. There is no central authority in control, so who's going to issue loans or mortgages. In the BTC network you are your own bank, so if you decide to create a system were you loan out your own coins for interest, it is up to you and you bear the risks involved.

You have CEX who will control that. They will pay the interest generated by people who using their borrowed feature to the people who lend their money. I see nothing difference between crypto loan and traditional loan conducted by bank. However, Crypto is much more simple as it requires very simple steps to complete it. 

[SilentEcho]

Bitcoin was not originally designed to replace banks in providing typical loans or mortgages. It’s a decentralized digital money system. However, with new innovations like DeFi (Decentralized Finance) and smart contract–based platforms, peer-to-peer lending has become possible on top of blockchain networks.
For large-scale, long-term loans or mortgages, Bitcoin is still not a full replacement because traditional banking relies on legal frameworks, stability, and regulatory guarantees.
That said, Bitcoin is increasingly being used for small peer-to-peer loans, international remittances, and as collateral in crypto-based lending platforms. So the realistic view is: not yet a direct replacement, but in the future Bitcoin and blockchain could complement or partially substitute banking services.

[daxkie]

I don’t think BTC was built to replace banks in the loan/mortgage space. It’s more suited for peer-to-peer or collateral-backed lending. The “be your own bank” idea works, but not at the scale of traditional loans yet.

[Satofan44]

You are already able to get loans for Bitcoin, just the rates are not that good. Whether the bank provides the loan or some other company, it is not that much different. Probably it is even riskier with these alternative companies in most cases. I do see a future where Bitcoin-backed loans become common but that will require a lot more competition and stabilization. I don't want to risk my Bitcoin at a loan to value ratio of 50% and APR of 10% or higher, it is just absurd. Loan interest rates should be very low these days.

I don’t think BTC was built to replace banks in the loan/mortgage space. It’s more suited for peer-to-peer or collateral-backed lending. The “be your own bank” idea works, but not at the scale of traditional loans yet.

What it was built for is not the only thing that it is used for. As a neutral asset, you can use it for anything you want.

[Obim34]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

IDEAL is a large word because not many will support the idea. Before you get Bitcoin to replace fiat, you need to remove/pass through government. I can cope with short term loans on Bitcoin, but for long term loans, i bet the price will never remain stable as of the time collected.

Practical example:

Loan as of 01/09/2025 to be paid in four years

0.001 BTC ~ 108 USD

Loan after four years, Bitcoin price hiked during this period(let's say X2) ie excluding interest for the four years interval

0.001 BTC ~ 216 as per  (In this case the debtor is repaying high)

But if Bitcoin dips

0.001 BTC ~ somewhere around 87 USD (In this case the lender is at loss)

IMO, Bitcoin isn't fair/ideal for long term loans.

[bitzizzix]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

And the answer will be the same. Bitcoin is unlikely to completely replace fiat currencies and the traditional banking system, but it will likely continue to thrive as an alternative store of value and a means of transaction, and the two will go hand in hand.
Bitcoin is also unsuitable for lending due to its highly volatile nature, which can potentially complicate borrowing, especially when the price rises, as loan repayments are based on the value of Bitcoin.

[Satofan44]

Once again, one more “newbie” question, until you realize an account does not define the person behind it.
So, is BTC really the ideal tool to replace banks in typical loans and mortgages, or is it only designed for big players and small-scale charity "loans" like we usually see in this forum?

IDEAL is a large word because not many will support the idea. Before you get Bitcoin to replace fiat, you need to remove/pass through government. I can cope with short term loans on Bitcoin, but for long term loans, i bet the price will never remain stable as of the time collected.

Practical example:

Loan as of 01/09/2025 to be paid in four years

0.001 BTC ~ 108 USD

Loan after four years, Bitcoin price hiked during this period(let's say X2) ie excluding interest for the four years interval

0.001 BTC ~ 216 as per  (In this case the debtor is repaying high)

But if Bitcoin dips

0.001 BTC ~ somewhere around 87 USD (In this case the lender is at loss)

IMO, Bitcoin isn't fair/ideal for long term loans.

You don't take a loan in a value appreciating asset, that is part of the basics. You should not even take a loan in currency that is foreign to you. You take Bitcoin-backed loans in USD, if your local currency is not available. It already works great for those who can get a good deal.

Bitcoin is also unsuitable for lending due to its highly volatile nature, which can potentially complicate borrowing, especially when the price rises, as loan repayments are based on the value of Bitcoin.

No, they don't have to be.
To get a loan, you need collateral. To use USD collateral to get a Bitcoin loan would be completely stupid, just buy it on the market with the USD. No loan needed, no interest, no issues. If you have BTC collateral, you take out a USD loan and none of the issues that users are describing present.