Topic: Bitcoins interest rates possible? - page 4. (Read 6550 times)
Thats what i mean. What is preventing the Bitcoin economy from becoming the shitty and evil thing our dollar economy is right now?
No do not introduce Interest into the Bitcoin market. The whole concept of interest is what is destroying the real fiat currencies of the world (USD, CAD, etc). It would last for awhile but eventually destroy the whole BTC economy..just look around the real world to see examples of that. Why not just setup the Banksters here too....NOT.
What it is true is that under a deflationary system there is less incentive to go into debt so usually there is less debt in a deflationay system that under a inflationary system. Inflation promotes debt. But there are other factors that influence as well.
How do you figure? In an inflationary system, interest rates are higher. 
I loan you $8, you owe me $10 with interest, you buy a bucket from me for $6, you wash my car, I give you $5, you pay me back $5. Later you wash my car again and I pay you $5, you pay me $5 and the debt is gone. You can have unlimited debt on any amount of base money. There never needed to be more than $8 in this 'economy'
Thank you, I was too lazy to write down the whole example.
What it is true is that under a deflationary system there is less incentive to go into debt so usually there is less debt in a deflationay system that under a inflationary system. Inflation promotes debt. But there are other factors that influence as well.
You don't need to be able to increase the money supply in order to have interest. You can have more debt than money and it can all get paid back. Of course even if you couldn't pay back all debt plus interest without growing the money supply you could still have it, you'd just have defaults.
I loan you $8, you owe me $10 with interest, you buy a bucket from me for $6, you wash my car, I give you $5, you pay me back $5. Later you wash my car again and I pay you $5, you pay me $5 and the debt is gone. You can have unlimited debt on any amount of base money. There never needed to be more than $8 in this 'economy'
I loan you $8, you owe me $10 with interest, you buy a bucket from me for $6, you wash my car, I give you $5, you pay me back $5. Later you wash my car again and I pay you $5, you pay me $5 and the debt is gone. You can have unlimited debt on any amount of base money. There never needed to be more than $8 in this 'economy'
But bitcoin is a currency with deflation. If mtgox takes 500 btc, and returns 500 btc after some time, then it loses money. To compensate for deflation, mtgox should return only 95%-98% of bitcoins, keeping the rest.
Hahaha. No.Whether the currency is deflationary or not, 1 BTC today is always worth more than 1 BTC in a month. Because with 1 BTC today, you can have 1 BTC in a month or you can spend before that. So it has, today, whatever the value of 1 BTC in a month is expected to be plus whatever value there is in being able to spend it before that.
A currency cannot predictably deflate. It's like saying "gold is $1,000/oz today, but we all know it will be $5,000/oz in a year". That's impossible. People who didn't need money immediately would buy up all the gold until its price came very close to $5,000/oz now. Any *predictable* deflation will have already happened and its expected present value will already be bundled into the present cost.
1 BTC today includes the right to sit and hold that bitcoin and watch it appreciate in value. You can, of course, exercise that right by holding it. But you can also sell it to someone else for whatever the fair market value of that right is.
The reason BitCoins have been going up is not because of the deflation built into them but because they have been increasing in popularity, thus increasing the probability they will ever actually experience the deflation built into them.
Yes, there can be interest in bitcoins, and there will be interest in bitcoins.
No, interest are not bad.
No, you dont need inflation to pay for the interest. As an example, you can pay a loan of 1000 bitcoins with a money supply of 600 bitcoins. Money circulates.
No, interest are not bad.
No, you dont need inflation to pay for the interest. As an example, you can pay a loan of 1000 bitcoins with a money supply of 600 bitcoins. Money circulates.
But now one of my friends said, that with Bitcoins its still possible to have a system of banks, that own a lot of Bitcoins and lend them to people for interest rates.
Would you rather have 1 BTC today or 1 BTC tomorrow? Of course, you'd rather have one today. Because with one today, you can either spend one today or have one tomorrow. So if a bank wants 1 BTC from me today, it had better give me more than 1 BTC tomorrow. Otherwise, I'm giving up my opportunity to spend 1 BTC today for nothing. That's wasted value.Quote
There are thousand Bitcoins available. They all belong to the bank, and they lend 500 to a person for 10% of interest. Now the person has to give 550 Bitcoins back. But since the bank still has 500 BTC and he has the other 500 BTC those 50 BTC don t exist. He can t give 50BTC back and without pressing money they will never be there.
But what if he says to the bank, that he can pay the 50 BTC in another trading good like gold or cows or giving the bank owner a massage (service).
Wouldn t this still be as evil as the system we have right now?
There are so many false premises involved in this argument that I have no idea where to start. But what if he says to the bank, that he can pay the 50 BTC in another trading good like gold or cows or giving the bank owner a massage (service).
Wouldn t this still be as evil as the system we have right now?
If mtgox takes 500 btc, and returns 500 btc after some time, then it loses money.
That would only be true if it exchanged the 500 BTC for USD, then after some time (when the loan was due), bought 500 USD worth of bitcoins to repay the loan.
They wouldn't lose a thing if they just held the 500 BTC and then repaid it.
But bitcoin is a currency with deflation. If mtgox takes 500 btc, and returns 500 btc after some time, then it loses money. To compensate for deflation, mtgox should return only 95%-98% of bitcoins, keeping the rest.
Is it evil to rent a house?
Is it evil to rent a car?
...
Is it evil to rent a sum of money?
When you take out a loan, you're just renting, and paying rent to a 'landlord' (the owner of the coins).
That rent can be in any form; If no BTC are available, then pay your rent in massages if that's something you and the owner can agree on.
Is it evil to rent a car?
...
Is it evil to rent a sum of money?
When you take out a loan, you're just renting, and paying rent to a 'landlord' (the owner of the coins).
That rent can be in any form; If no BTC are available, then pay your rent in massages if that's something you and the owner can agree on.
Yesterday i was discussing with friends about Bitcoin and i got to a point, where i need your help.
I was always claiming, that with Bitcoins there is no interest rate possible, since the amount of coins can t be influenced by an evil power like banks.
And no inflation means no interest rates are possible.
And since inflation and interest rates are the tools, to make the world go insane by a constant demand for economy growth i am sure we would live much better without them.
But now one of my friends said, that with Bitcoins its still possible to have a system of banks, that own a lot of Bitcoins and lend them to people for interest rates.
Let me give you an example:
There are thousand Bitcoins available. They all belong to the bank, and they lend 500 to a person for 10% of interest. Now the person has to give 550 Bitcoins back. But since the bank still has 500 BTC and he has the other 500 BTC those 50 BTC don t exist. He can t give 50BTC back and without pressing money they will never be there.
But what if he says to the bank, that he can pay the 50 BTC in another trading good like gold or cows or giving the bank owner a massage (service).
Wouldn t this still be as evil as the system we have right now?
I was always claiming, that with Bitcoins there is no interest rate possible, since the amount of coins can t be influenced by an evil power like banks.
And no inflation means no interest rates are possible.
And since inflation and interest rates are the tools, to make the world go insane by a constant demand for economy growth i am sure we would live much better without them.
But now one of my friends said, that with Bitcoins its still possible to have a system of banks, that own a lot of Bitcoins and lend them to people for interest rates.
Let me give you an example:
There are thousand Bitcoins available. They all belong to the bank, and they lend 500 to a person for 10% of interest. Now the person has to give 550 Bitcoins back. But since the bank still has 500 BTC and he has the other 500 BTC those 50 BTC don t exist. He can t give 50BTC back and without pressing money they will never be there.
But what if he says to the bank, that he can pay the 50 BTC in another trading good like gold or cows or giving the bank owner a massage (service).
Wouldn t this still be as evil as the system we have right now?
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