Topic: Debt and Crypto? (Read 935 times)

I agree with you banks will switch to lending cryptocurrency one of the options is shown
https://bitcointalksearch.org/topic/m.54966182
The proposed project has a solution for lending cryptocurrencies backed by smart contract tokens without fear of losing financial assets in the event of negative market volatility.

i dont think it can because theres so many countries that ban bitcoin but if let say all countries are now legalizing btc i still dont think that banks will be closed because bitcoin supply is not unlimited but money printing can be and banks are the only one that can do that . about debt , it can always happen to most of us that are in tight situation  but debts cant make the price rise because people are going to have a hard time buying a coin if they have debt and they are also going to sell thier coin for cash to pay the debt .

If ever Bitcoin in the near future will become a world currency, I guess in your statement you were right that all bank companies in  the whole world will be gone for sure. Because ever payment options will be based on Bitcoin transaction. And about debt, I don't know actually, if that happens, but one thing for sure I know is that Bitcoin will really be spike for sure in the future.

That happens when loans/debts are taken without prior planning of how you should return it and what are your plans on using the money you took to get something extra out of it. If you see you would earn less than the interest you will pay then obviously don't take a loan.

Don't mind me saying but that is the worst attitude, not having backup and taking loan to buy a car is like
'let's enjoy today , what happens tomorrow, I don't care!'

You are lucky that you came out of this because it is nearly impossible when you don't have earnings and you spend like a king without thinking of future consequences.

Of course, if only relying on payments and receiving payments will not make the bank grow and become a bank with very much wealth, the bank must increase its use to get a lot of money, by providing credit, loan, capital and other offers, essentially giving money to them. customers with a few percent interest, well the bank will benefit from a percentage of the interest.

It seems that even now payment transactions and payment acceptance are not the main source of income for modern banks, so I think the idea of a threat to the banking sector coming from cryptocurrencies looks a little far-fetched. There are payment services for such things, and that's where you can look for potential conflicts of interest. Banks, as financial organizations that accumulate financial resources and issue the necessary amount to their customers, remain afloat and, if allowed by regulatory state organizations, will also lend cryptocurrencies.

I'm seeing banks as not completely dying once bitcoin gains traction over mainstream media but wiuld take measures to integrate themselves to the new world. Like what the OP stated, they can set a buy crypto with us now, pay it later scheme to help investors jumpstart or boost their portfolios while still keeping their commerce alive. They wouldn't be easy to go down especially if we consider the fact that most banks have been here before our grandmas were born. Not that it's a good thing, but not a bad thing either. So unless we create or discover a complete replacement for banks, this is what I assume will be the case for the years to come.

That is the great thing about defis that I am very much in love with nowadays, they have created a blockchain that could actually represent people like banks without the need of authority and centralization. One day we are going to have something that is so decentralized and in a way that does everything a bank does that people will stop needing banks and I think that will be the day when we are actually doing awesome.

Banks are the only reason why I got involved with crypto and it is going to stay that way, I am using a digital bank now and I do not have any physical space for my bank, and that was a big improvement for me, if I can stop with that and move fully towards having a decentralized situation without any banks but still able to use my money everywhere I go? That would be insane.

I agree with you that banks are not really evil because these central organizations are the ones behind why the economy of each country is still intact. Without banks, many countries would collapse because majority relies on the debts.

Debts aren’t necessarily bad. It just depends on how the debtor manages and allocate the money he borrowed from the banks. There are good debts and bad debts. The bad debts are those that does not bring income and are just spent over expensive and non-essential things or projects. On the other hand, good debts are those that generate income and are spent over important things, projects, and programs so that the citizens can benefit.

In crypto world, I think there’s already existing some sort of process like those of banks where they could borrow certain crypto. I’ve read a thread in marketplace perhaps where the users here can borrow any as long as their account has reputable history such as good no negative tags, much better if it has trust, and is already at high rank (been in crypto world for a long time). In addition, the user must post in the thread how much he wants to borrow, the span of time he can repay, and of course a collateral so that it’s guaranteed to be paid by the borrower.

The banking system has to be treated separately when we talk about crypto. Because it is a system that is being replaced little by little by the defis. In these cases of uses the bank does not participate. There are already debit cards loaded with crypto designed especially for users, there are loans whose support that users have are cryptos. The bank would have to take a big step to offer its users traditional crypto-backed services.

This matter I have been thinking for a long time and I have come to my conclusion. I think that due to the lack of transparency and the lack of headquarters, lending online will also be very difficult. Obviously, those businesses cannot recover debtors who don't want to pay off debt
In addition, due to legal issues in each country, Cryptocurrency cannot easily be operated comfortably.
Those are the great challenges that no government has the best solution to that problem. So lending Bitcoin is not possible at the moment and I believe that Bitcoin is not yet able to replace banks.

Crypto is not a banking system, it is not compared to what you can do with credit cards or loans or anything like that, you do not get mortgage to buy a house from "dollar", that is the thing you use to buy and not place where you get the loan. Crypto is equal to dollars in this example, or if you want gold, because we call it digital gold for its limited nature, and you do not care about debt of your dollar and how you will pay it back to anything related to dollar itself, you do it towards banks that gave you that loan.

It means, if one day we move towards a lot more crypto world, you could always have banks that issue crypto loans. Why do we not have proper crypto loans right now? Because there is no regulations about it, the moment governments allow banks to issue crypto loans where if you do not pay back you will have a seize of your assets, we could always have that, just like dollars.

Bitcoin is a really good thing and every one of us here loves Bitcoin for so many reasons. But I have never for once thought that the Bitcoin will replace our currencies, nope I have never had that kind of thought, maybe I see it differently from the way other people are seeing it.

I still believe that it will gain huge adoption but not the way some people here do describe it, I just think it will become a normal thing in the online world, an asset that people are going to love, most especially because they can transact money easily without stress and within few minutes (though it can be hours sometimes).

everyone has a different point of view. and this time with the opening topic providing an opportunity for sharing, both experience and knowledge of debt, both in the banking sector and others.
As for from my personal point of view, in the case of bank problems, if applied to a cryptocurrency loan this is quite neutralized appropriately, where there will be most of the bitcoins, whereas to make payments there is a huge risk if the additional interest is around 2.5%. imagine what the total must be paid. this is going to be more difficult. but in terms of a different understanding with a long time interval we will invest in bitcoin with a fairly large profit as well.

It will be quite tricky to give out debts in cryptocurrency but with enough data and planning I think it's possible. Banks found a way to do it and collect on payments, someone could figure out a way to do the same with crypto. It would need mass adoption first though and you would have to have crypto wallets linked to ssn so payments can be collected from the debtors.

the problem is quite complicated when the relationship between the bank and crypto, there are banks that do not accept and there are also banks that accept, it is difficult to solve it, I think we can change some alternatives from bitcoin into money, many applications that provide it only possible tax will be great that we get

If that is the case, just like the fiat money, I think it is possible for cryptocurrency to be loaned. Maybe there are some investors there have their bitcoins loaned. I just cannot imagine how it works to think that the value of the coins is volatile.

To tell you the truth I would not like be a person who is going to lend in cryptocurrency. Just imagine. You have lent 1 BTC when it was about 2000USD and even now bitcoin value is about 8500 USD...

I agree with your views on debt. Debt is truly a modern tool for slavery by willing victims...in fact people are so eager to get into debt with some level of excitement (symptoms of greed and being a victim of our over-commercialized world). The debtor is always under the choke of the one giving off the debt, generally speaking. However, if properly managed and in good terms debts can be having positive impacts too. In fact, we have to get into a balanced state otherwise we can get burdened by things we should be avoiding with.

if for example there is a bitcoin loan for the supply of 21 million bitcoin, and for those users who want to debt on a large scale and with a certain period of time, interest on a considerable scale will make them object.

okay if there is a significant increase of bitcoin and some people who owe can benefit and pay back to pay the interest.

but if for example the bitcoin price actually goes down, it will make their load bigger, we know that bitcoin is fluctuating, so we can not predict the price well, and of course the determination of interest here will also be a bit difficult. bitcoin parties also certainly do not want users to get a lot of losses.

Investing in stock market doesnt guarantee you profit. There are still losses in any investment adding to that investing in stock will take you along time to see the ROI or profit while if you invest in crypto currency there is a small chance that your investment might double.

There is no guarantee when it comes to investing no matter if its stocks or other form of investment.

I see debt as being a slave to the government we all decided to put there and the worst part is that we fall for it so much and we end up keep enriching the banks with the so called interest. Probably, they would rather prefer the lower classes to remain there and not liberated until they are so debt ridden and they keep winning up there. Debt sucks and I see debtors as those who are just trying to live a life they cannot even sustain and that even sucks more. Like Richard said, if you do not have anything, you do not buy anything.

Well, relating that to the supply that you mentioned, in that case, I want to assume that the finite supply may not be a real problem as there must have been a huge demand for the banks to have even experienced being threatened in the first place and we all know how adoption would have been like for the bitcoin's value.

I am sure there should be enough in satoshis to probably go around, or maybe even if there is not, like you said, other cryptocurrencies may come to play. I really do not like assumptions anyway, but let's face it, I do not see cryptocurrency would throw banks to the garbage; they will not stop existing one way or the other and blend with the evolution.

You are stating two different versions of financial system, conventional system or banking system is different form financial system comprises of purely digital currencies/assets.
Unfortunately our conventional economic system doesn't support a currency with having finite supply and without debt.
As far as we are living in this conventional financial system, digital currencies can't take over the fiat or banking system, this means more awareness and user support is needed to implement digital financial system and to get rid of the banking system.

Obviously, I would not expect a currency from the banks to be decentralized. Moreover, each bank cannot just decide to start launching their own cryptocurrency since they have a central bank that regulates the whole thing, so in that case, I can see government coming up with something and letting that roll out for anyone who may want to borrow.

One thing I have known is that things always do end up rectifying themselves in the long run, and worrying about banks being discarded is something I don't see happening.

I think it is a big risk if you will incur debt just for cryptocurrency. There are a lot of investment opportunities and I would recommend that you invest on stock market as it is safer and more guaranteed.

Not necessarily. It all depends on the person itself, and the understanding of the market he is investing his borrowed money in. There are enough examples of people having lost their mortgage funds due to bad decisions.

I personally find taking out loans for investment purposes to be the most stupid and mentally retarded thing people can do. Especially in case of a mortgage, or even a second mortgage, you'll be in debt for life if things go wrong.

People only think about the positive aspects of investing, which is just stupid. Investing with borrowed money contributes to you experiencing heavy pressure, mental instability, and to some extent carelessness.

People quite often tend to take more risks with capital that isn't theirs, which is actually weird, because you would expect these people to be more careful with money they borrowed due to the potentially negative consequences.

I don't think that banks will be totally wiped away even when bitcoin is assume to begin to play the role of banks because banks provide a third party service which bitcoin is not known for but p2p. Banks can adjust to certain operational function to accommodate the use of bitcoin particularly in huge business transactions.

I do not think this is a good idea, although Debt is a decisive factor in the development of the economy. But essentially crypto and Blockchain technology are anonymous technologies, and we do not know who owns the Debit token. I think we have to have a different technology to help us understand who owns them if they want to grow based on crypto. But this is really hard because no country is researching, developing or promoting them so this is unlikely.

in a way, crypto is the opposite of debt. it represents freedom from the bondage of work and debt.

actually when we say banks are evil and afraid of crypto... it is half true.

Commercial banks have no fear of crypto as they are just intermediaries and they make money with credit.

So whether the world is using USD or BTC, there will be people who will need to take out loans and credit.

This is how banks will make money.


The real BANKs that is afraid of crypto are the Central Banks, as central banks are the ones who are controlling the
supply of money and interest rares. They have power over their country and economy as they control how much money
is available and whether people can get cheap loans.

With crypto, they have not control at all.. thats why they are worried.

Back to the main topic, debt is a good thing. We all need debt and using crypto as the underlying asset for debt instruments will
be a natural thing when crypto becomes widely accepted.

For banks, all the crypto currencies are seriously one of the biggest threat and that they are very much afraid of them as most of the people have started opting for crypto currency other than relying on banks and above all, crypto is also helping the investors in having greater profit too.

If someone is taking a loan from bank in order to invest that money into bitcoin or other crypto currency, he surely will be able to make huge money out of that.

Huge poison and I do not agree with the OP saying that people cannot do anything without having to borrow or be indebted to the banks. The banks have always decided to make everything pretty difficult with their monopolies and manipulations which I want to believe is what has affected the middle and lower class till date in having to live life of debt. One way our own government and banks have decided to enslave us.

If banks phase out, I really do not care what happens, the most important thing is that blockchain technology at large as brought the freedom.

Indeed, people with credit cards use it to purchase bitcoin but since then some credit companies closed their ties with cryptocurrency to avoid being used as passage to cryptocurrency. Though this is not illegal, the companies cut ties because of the volatility of bitcoin and other cryptocurrency which could possibly lead to bunkrupcy.

In my opinion bitcoin will not replaced a currency or replaced any bank because bank served many purpose, in case of bitcoin thrive and the "old transfering system using the bank collapsed" the government might think a better way to work with bitcoin, perhaps by creating their own blockchain or even work to becoming a bitcoin exchangers which also gaining the fee from every transactions. Example of this; we can exchange currencies not only in the bank but also in money changer. So there is also possibilites that we can use bank to exchange coins and do transactions with their systems. So thats one case solved for bank to gain profit in this.

An economy wont survive without debt instrument and bonds because that is one way to gain investment to expand business and improve economic growth of a country. And that is why bitcoin won't be considered legal yet since the government still trying to find a way to pressure the price. High volatility is making price unstable to become an investment, even if the supply is limited it can be still be used to replace bonds only if the price is stable just like currency. Paper money was printed based on gold reserve a country hold. Look at Feds keep doing Quantitative easing and printing money while drowning in debt. Based on that the supply is unlimited but the value keep decreasing overtime however it can maintain "stable decrease" overtime not an "overnight fallout" like cryptocurrencies

I don't think that cryptocurrency being used as a payment for debt a good idea because first of all it is volatile. Anyone owing Bitcoin is at an disadvantage they might be paying more in the next month compared to what they have previously paid. Also there are no possible scenarios where Bitcoin will become an official debt instrument as our own respective fiat currency is protected by law. For me personally I would rather owe something based on Fiat currency rather than be paying Bitcoin back for something.

Bank will never want bitcoin to solve becouse bitcoin will not allow them to keep debtors under their evil debt management that has keep many people and countries that are now in debt. Many debt instruments will be obsolete when cryptocurrencies is well established and developed.  If bankers are allow to have they ways they will kill bitcoin and cryptocurrency becouse that is the only force that can but they criminal activity to an end.

We have 100m sats for a single bitcoin and that in itself is a whole lot and considering how things must have changed to see banks being phased out, that means adoption would have been huge and realistically, having a satoshi being equivalent to $1 could be possible, so, having limited supply to go around for debt may not be an issue.

Even though, I believe banks cannot just disappear into thin air, considering they will find ways to still function as a bank, irrespective of how technology has changed. It is an evolution of currency and adaptation should not be a problem for banking institutions in the long run. Worst that would happen is that, being a regulated environment, each country may come up with their own centralized cryptocurrency, banks using it and then see how that goes.

I do not even want to go into the debt part as that is more like the banks and government fashioning a way to enslave us all, so whether the ability to borrow is in play or not, that is not a concern for me. Why live a life you cannot afford or maintain anyway?

Desperate to get into bitcoin, investors slip into debt. ... Some investors are taking dangerous risks to get into cryptocurrencies. Roughly 18 percent of people who buy bitcoin use a credit card to do so, according to a new survey by loan marketplace LendEDU.

This isn't exactly true. Banks can't create money at will, and they only do so in relation to demand for loans. The money supply increase because of the loans, not because the bank has created extra cash. Only the Fed can print extra currency, and they do so in relation to how much banks increase the money supply through loans to try and keep the ratio of physical currency to digital fiat steady. For regular banks to increase the money supply, the demand for loans has to be there first, the bank can't create loans if no one wants them. Also, by law the banks have to keep a minimum amount of reserves, so they 1) only create loans to match demand, and 2) only are able to create as many loans as able while maintaining the required reserves.

One would expect that when demand for loans is high, banks would have to offer higher interest rates to entice more people to deposit money so they could make more loans without falling below the mandated reserve amount.

Well, what you need to remember here is about the function of the cryptocurrency itself. By understanding the function of cryptocurrency, you will understand what should be matched to it based on its functionality as well. Debt/Loans and cryptocurrency can certainly be synergized, because cryptocurrency is a protocol that can replace the role of cash. However, to get a large loan, of course there are various requirements that must be fulfilled by the applicant.

It's actually very simple, if you don't have anything, you don't buy anything. Debt is indeed a way to overcome the temporary lack of financial resources, but at what cost? If we look at the younger generation having nothing and resorted to loans to fill up their gaps, it's safe to say that they have made the situation worse for themselves. It was stated that in the last decade  the total debt of the younger generation has tripled in number, which is a worrying development. That's what you get when banks and other financial institutions are so easily allowing people to get into debt, and the shocking part is that this will not stop and likely triple again in the next decade. Great system this is....

A finite supply changes nothing there. That's just the nature of debt. The debtor has less, the lender has more. The difference is interest.


For now. Several companies have emerged to take advantage of that vacuum (Civic, Bloom, and others). The traditional credit reporting agencies don't have skin in this game, but I think third party services will be used to verify identity and check backgrounds just the same.

I know what you mean, but the main point still remains that you are exposing yourself to debt, regardless of the purpose. I know a family member of mine who has taken out a mortgage loan to buy himself a property, and have it rented out to several students at the same time where they each get a room for themselves. At current stage his monthly mortgage costs are almost €800 per month, where he nets a fair +€2000 per month after collecting rent from all students. After various smaller potentially unexpected expenses, he on average walks away with €1000 in profit every month. In this case he makes his debt work for him, which is good for him as long as it works, but definitely not something I would ever do.

If something is impossible for me to fund on my own, I will just accept that it's not a reachable target for me, it's that simple. I'll either set myself a target to accumulate the required number of funds to invest or buy something later on with my own money, or focus on something completely different. I am not a slave of my bank and never will be.

Very interesting point: When lending money, everyone wants to receive more money back than they lent, but when the supply is finite, there must be other people losing money to make the first one earn interest, right?

So we are just redistributing money (Bitcoins) among ourselves. We aren't building fortune, but exchanging fortune among ourselves where you never increase your budget without making another person lose part of his budget...

About the loans, it works perfectly, because it will be an eternal exchanging scheme. You borrow money, you recover it by doing business and pay the lender, but thanks to other people who have lost money for you, by paying for your services/products, then you and your lender will need these people later and you will pay them for their services/products. So this money is constantly coming and going...

But to make it work I believe it's necessary to keep spending money, and avoiding accumulating wealthy. Hmm, that is the complex part as everyone wants to upgrade their life status...

If there's a finite cap and the banks are willing to create a platform where they would act as the "Escrow party" and the lenders and borrowers can participate on this platform and pay the Banks some form of commission or escrow fees. This way they banks would only need to maintain the ratio of lenders vs borrowsers by regulating the borrowing rates of interest to attack borrowers or leders appropriately. This will eventually also put the banks out of "monopolistic" power where they're too big to fail and several such platforms would emerge by private parties who would provide a service for cheaper interest fees and create competition, unless ofcourse the fees are also regulated.

Also, I feel in a realistic scenario If the banks created their own cryptocurrenceis, then a finite cap wouldn't exist. They would still want the power and authority to be able to print more of the cryptocurrencies based on need and on whatever algorithm they use for it. Banks would prefer to use a private blockchains and sometimes be able to freeze funds to prevent money-laundering and illegal transfers. I'm also going to mention that several banks have also tied up with public blockchain services like Ripple for cheaper and quicker money remittances.

In the end most of the present day debt comes from Banks who maintain some reserve but have the ability to print cash in excess of the reserves when need arises. This makes them "Ultra superior" and important, which also makes it risky for the economy if they collapse.

In the past I have been able to say that this process is extremely risky, as a small amount of bank debt and a profitable buyer of Bitcoin. The stress that is required will remain constantly in your head with many other risk reasons. The situation will be even more serious if cash shortages or panic sales are made after a sharp decline.

Not sure what your hang up is about it. Most "money" that exists is digital, so if you're thinking there has to be physical currency sitting somewhere to represent the value of your house, that's not necessarily true. You don't pay your mortgage in cash, it's done by electronic transfer or check, and the latter is a physical analog to electronically move money through a series centralized ledgers. In that sense, the digital fiat system we have isn't any different from bitcoin but for the fact that it's centralized instead of decentralized. But it's still true that the value of your house is represented by the digital fiat in existence.

But since they can print fiat at will, we end up with delusional, unsustainable hopes of constant growth, which is why capitalism is collapsing, it's based on constant growth and this is not how things work in real life.

In any case, like I said before, bitcoin for me was never meant to replace fiat, but to act as a catalyst against it when fiat goes full retard thanks to corrupted fiat policies. When they bailout corrupt bankers and your savings go to hell you will see the need for bitcoin as a neutral safe haven that's limited in amount and basically immutable.

I agree with your idea about crypto and debt this explains what the current economy and people in every nation has. Debt maybe a poison that kills and let people drown but it could sometimes help and make them successfull if they did it right. It is also a privilege to those who have nothing but the only problem is on how they are going to pay such expensive goods, houses and cars? Is this what governments want and promised to it's people to get locked in prison because of debt? I myself hate it too because I know how hard life is and I don't want to get into trouble. Cryptocurrency is the best way to have financial freedom without getting involved in debt.

Totally agree with you, some people think that all the banks do is to take your money and bitcoin is the angel, but people forgets that banks and regulation protect the crowd, with all the scams happen within the bitcoin network it would be impossible for it to receive a massive adoption without regulation, because innocent people will just lose their money.
I believe that it is going to be hard to maintanain a successful economy without part-reserve banks, and that's one of the reasons I believe it's going to be a disaster if bitcoin replaces fiat completely.

This seems so wrong that I can't believe anything else that you wrote. Basically, you are saying that there is money sitting around somewhere that represents the value of the house I bought. That can't be true.

I am currently a little bit in debt to buy Cryptos.

Now as far as your question, Bitcoin will coexist with banks, it will not elimante them. As you said banks are needed for loans.

I appreciate the concept but this is too early to execute such kind of plans in my opinion. On the other hand, we must take into the consideration of the failed models like BTCJAM. Although it was a peer to peer lending site, their execution went wrong and since BTC is in the early stage, I am sceptical about the capacity of the implementation such concept even through the fork. However, if we can build something like this in the future then it will definitely be a path-breaking milestone for us.

Gold wasn't a suitable currency instrument either, which is why the whole world has abandoned gold-based currency. It limits economic growth because it can't be produced at will. Currency (money) is just a representation of value that exists in the world (value = goods/services) so the worth of money is how much money exists divided by how much value exists. When value increases faster than the money supply, you have deflation (money increasing in value) and when the money supply increases faster than value, you have inflation (money decreasing in value). The trick is to marry the currency growth rate and economic expansion so money stays mostly stable, and this is the job of the Fed. It cannot be accomplished with a decentralized, uncontrollable currency, which is why crypto is never going to replace fiat.

Economic growth depends on taking stored value (savings) and loaning it to someone who will create something new of value to repay the debt with interest. This is sustainable because the new thing of value increases the overall amount of value in the world, which did not exist previously, and justifies the increase of the money supply (the loan). A crypto-based system would inhibit this, and inhibit economic growth, because the money supply cannot be increased.

Debt doesn't depend on printing - it depends on fractional reserve lending.

And of course you can lend without fractional reserves if you want - just lend what you have deposited, rather than a multiple of deposits as in the banking system.

I cannot imagine an economy without debt.
In a narrow scale, debt used by individual when there is a financial problem. Loans survive individual and sometimes, we loan because we have to buy something in a rush.
In a large scale, the debt is used when there is financial crisis. Usually, if there is a catastrophic event happened in a state or country. It is also used of the country to increase the future growth of the economy.
Yet there is an advantage in debt, we don't deny that too much debt of an individual or the whole economy make is bad. High debts will lead to a great crash of an economy. It may not also make the economic development of a country but it might goes to inflation and citizens will suffer much of it.
In conclusion, debt may be a boon and bane to the economy. It may upon the uses of debt and how it will be return. In my case, I prefer to have loans when I will invest in something but I will invest with assurance that I will pay  my debt. It is hard to take risk when you did not know what will be the result.

Forgive my limited economic knowledge but isn't bitcoin simply just like gold? Even if there is a limited amount of it in circulation, isn't it the value that is being lent out and the value increases as the economy expands? So say, the entire world has switched to bitcoin, isn't it unlikely to have all that BTC21M in debt?


We have a saying in our family that debt is only bad if it's bad debt, basically anything that don't make a profit. It's impossible to fund everything on your own and if people are to lend you money, they're going to ask for something in return, whether that be interest or shares (if you are building a company). Even investors in crowdfunding would ask for something extra to make it worth the risk.

Crypto is already seen as a bubble and "not real money" by large sections of society. Allowing "debt tokens" to be printed, and watching the default rates inevitably skyrocket, would only further reduce legitimacy in crypto. The debt token would be associated with BTC/ETH and such. This is a very, very bad idea. As they say, only invest what you're willing to lose - a debt token would encourage the exact opposite.

The "debt is good" argument fuels state run wealth distribution programs which give undue privilege to the wealthy at the expense of poor to middle class income bracket taxpayers. The european union and united states being trillions in debt is largely due to taxpayer wealth being redistributed to elitist institutions like northrop grumman under a guise of "serving the public good"(example F-35 with massive, uncontrolled, cost overruns / extremely bloated cost). Large corporations like google have many of their operations subsidized by the state and receive unfair tax cuts which prevent small businesses from being competitive in the same markets. "Debt is good" as it allows one percenters to shovel a greater proportion of poor to middle class wealth into their own pockets.

"Debt is good" also empowers high risk investments which caused the 2008 economic crisis. Repealing glass steagall which separated investment banking from commercial banking led to a less stable economy.

Another issue with "debt is good" involves it being an oversimplification in absolutist terms. Of course looking at the USA being $21 trillion in debt, I don't think anyone would say that's an example of debt being a good thing. So of course, while debt might benefit the economy and elevate living standards under some circumstances, it doesn't justify the extreme commitment to rampant and uncontrolled consumerism which defines the "debt is good" perspective.

Crypto currently isn't a good framework for loans. It lacks the creditchex, identity confirming, background check and debt collection infrastructure which banks and loan institutions rely upon to make running their business viable.

There is no reason why bitcoins cannot be loaned. I have loaned bitcoins to people. It doesn't seem impossible to me.

The argument that "if all 21 million bitcoins were loaned, it would not be possible to pay interest" doesn't make sense because the loaned bitcoins are not consumed or locked down and loans and interest are repaid over time.

Also, some people believe that it is impossible to have fractional reserve banking with Bitcoin, but I don't see why not. I fully expect to see FRB with bitcoins in the future.

Bitcoin should stimulate actual ownership of assets, not enhance debt in any way, and I am glad that it doesn't. It's obvious that banks aren't going anywhere, but that doesn't mean we should be supportive of them.

In the same way, we shouldn't be supportive of debt as stimulating factor allowing the economy to grow on valse hope and unlimited value creation. I like the difference in thinking that Bitcoin brought to the world.

I also like the fact that you can do whatever you want as person. If you think that the current way of growing an economy is the way to move forward and sustainable in the very long term, then you're free to think so.

I am however differentiating myself by following a different path, away from what I believe isn't right.

Most of the banks, multi purpose cooperative, lending company, government program that let owed people like house and lot, vehicles, business capital, etc. helped and gave an opportunity to get what they want or they dreamed of.  Some of them are maybe good but some of them will stuck on you to pay back forever like the house and lot which double or triples the original price.  It sucks paying those bills for the rest of your life.  And now if we talk about crypto if you are a wise investor you have to learn though many strategy how you can minimize the lifestyle you may have.  Invest and pull out the profit and its up to you to decide the rest.  

An "alternative"?

So you are saying that at one point, bitcoin will end with all this fake debt that all the countries are having right now? Well.. You clearly do not understand the concept of Debt.

I understand what you are saying and I do agree with you, but I don't think bitcoin or any other crypto will ever shut down banks entirely. Maybe our economy will change considerably in the future, but I think that debt will always be a part of it, because of the points you've made. I don't see crypto as a replacement for fiat, and I think countries will always have their own currencies. That doesn't mean that bitcoin can exist as well, and facilitate international transactions, act as a safe store of value, where your economies will be safe even if your country faces problems, because BTC will not lose it's value (just like gold). It will have the advantage of being easy to spend, and store, and this is one key point that favors BTC over gold. It's also a lot less centralized, and easy to acquire than gold. So basically I think people will still use fiat, but will now have another option to keep their economies safe, and to transact money with other persons, but people will always use fiat as well, or some other thing that is issued and controlled by a country.

You know what op, people who are hating on banks and want it to be gone are either hypocrites or delusional. I have said this because we clearly cannot survive as an economy without the banks that most of the people here wants to be gone immediately. These type of people mostly think only of what they think will be a good thing to happen without even thinking about what will be the consequences because they are either close minded people or just too lazy to find out more about how things are connected with each other. Don't get me wrong, I too hate the banks and the way they force into us the overly outdated monetary system we currently have today. Clearly, they still really hate the idea that they cannot control and benefit from the existence of crypto currencies. But even stating so, I wouldn't want them to be gone just yet(not till issues that the cryptos are currently experiencing are already taken cared of).

Great post by the way op, you deserve a merit so imma give you one.

I see debt as a poison that slowly but surely has become a tool that allows the upper layer to suppress the lower class of the society. We're living in a system that's purely based on debt, and build up with debt. Central banks keep printing money like it's nothing, just to keep the economy going. People are able to take out loans and mortgages that don't represent their own financial capabilities, which basically means that financial institutions are willingly putting people into debt. I am anti any form of debt, and handle the main principle being that if you don't have the money for it, don't buy it.

Technically there are certain ways to allow whatever entity to issue certain crypto tokens endlessly, just like central banks are able to print money, but that doesn't change anything from the fact that you're not improving anything. The only thing you're doing is relocate the problem and give it a different name. Nah, debt in whatever form of shape is poison.

About the debt problem people can use it to pay interest on a large scale using the satoshi as unit. If 1 satoshi is equals to 1$, It would be possible to pay large scale interest using btc and lending is not an issue because it can also be done using btc. Another roundabout solution to this problem is the creation of a new coin dedicated to it, but the coin itself might not be decentralized.

I always saw Bitcoin like a gold alternative but better, since you can carry it and move it around without being stopped and put to prison on every border if you tried to escape your collapsing government.

As far as debt goes, technically it's possible via payment channels. Just like on Poloniex people ask for coins to get loans, you put them there and they pay you back with an interest, but done right, decentralized with payment channels. I think the lightning network will make it possible to make passive income by decentralized loans. Of course im not sure how that would work in practice since there must be some kind of collateral but we'll see.

What has caused the massive collapses has been uncontrollable debt, they print too much money, and the debt never stops growing, at some point it becomes a bit of a joke. Having a finite supply doesn't mean there isn't people out there willing to put their bitcoins somewhere so people can get loans. There could be not enough offer for people wanting to get loans tho, this is all very difficult for me to theorize since I don't know how it would work in practice.

In any case, other cryptos could be delivered for that, the challenge is how to do it in a decentralized way.

I was wondering what everybody's thoughts were on issuing debt based on cryptocurrency. Debt is an extremely important factor for economies to grow. In a simple example, very few people would actually be able to purchase a house without debt. If you can't purchase large cost items like cars and houses, to name a few, the economy will literally collapse. Not to mention that transportation would become a very big problem. There's more examples to be made for starting businesses and many more but I won't discuss that in my original post.

Cryptocurrency is not inherently a debt instrument and cannot simply be "printed" or issued past its limit. I know a lot of people here feel that banks should die and banks are evil, but realistically I don't see how an economy can survive without debt instruments and issuers. If Bitcoin does replace all currency, does this mean that banks will collapse, or issue their own cryptocurrency to 'lend coins' to people who would like to make a big purchase and pay it off over time? Would it even be possible to pay interest back on a large scale if a coin has a finite supply? If there is 21 million Bitcoin in debt lent out and circulating, how could there possibly be a way to collect more than that by the bank. Would multiple cryptocurrencies solve a problem like that, or would it mean that the debt just gets pushed off onto some other coin and then also onto another infinitely?

I love Bitcoin and all this technology, however I have not theorized a way in which it can completely rework debt instruments and the institutions that supply them. IE: Banks.

Would love to have a discussion going on this topic. I have pretty limited economic logic!