Topic: Possibility of Bitcoin Mortgage? (Read 127 times)

Another idea that comes to me is that of the possibility of a Bitcoin Mortgage. It is indeed a difficult task especially in terms of execution of such an idea and upholding the agreement of mortgage. But the idea is possible. Consider gold mortgage. When you deposit it for exchange of money, a certain value is assigned to it and a sum is provided to you. You will return back the money to get back your gold. In the same way can BTC morgate happen?

The BTC is held by the money lender and returned once the full sum with interest and whatever be the part of the mortgage agreement paid. In case of a failure of repayment, the BTC will be held by the lender. Certainly the risk is involved for both the parties. For the lender, the depreciation of BTC value during mortgage will be the problem. For the mortgagor, appreciation of the value during the mortgage will be the problem. In such a scenario the agreement needs to be carefully drawn.

But the whole idea is not to sell the BTC. Just like depositing gold to gain some money only to be repaid to get back your gold. The idea is that in the long run, the returns from gold or BTC in this case is more rewarding. The question one can ask is that why not sell small part of the BTC? Well, as we know we wont do it, for the reason is volatility. You may have to reinvest more to get back the same amount of BTC that you sold. This will be a loss indeed.

There are certainly a few lending platforms that are on the rise using blockchain technology which is great. The idea is to explore the possibility of its expansion into the world outside crypto. So you mortgage crypto for a gain in the outside world.