Topic: Theoretically, is a Bitcoin Credit Card possible? (Read 2251 times)
It will be possible when people dont see $$$ while they are looking at BTCBTCBTC
There's a few popular exchanges that provide this already...haven't used an exchange in a while so I'm not sure which ones nor can I recommend any however this wouldn't be hard to find out.
When gold was the currency there were loans. Even fractional reserve loans.
Lender has 1 oz of gold. He issues a certificate to 10 different people in the amount of 1 oz of gold. People use those certificates as if they are money. At some point someone can claim their 1 oz of gold but they count on not many people doing so.
Bitcoin company issues a Bitcoin credit card, they have 1 BTC and offer 1 BTC worth of credit to 10 different people. The person uses his Bitcoin credit card wherever that credit card is accepted. The merchant then gets a "credit" for however many bitcoins were spent on their merchant account (just a value in the database). The merchant can withdraw their bitcoins or use their own Bitcoin credit card to make further purchases.
They rely on not everyone wanting to take their bitcoins out at once. Otherwise they are screwed, that is why a bank run was always such a big deal to banks...in Mary Poppins they gave a glimpse of what would happen if people wanted their money from the bank all at once.
When it comes to credit limits and whether people pay the bitcoins back, they would be subject to the same credit rating as other credit cards. If you're late, your credit score goes down.
One of the problems with this scenario is that it is way easier and way less expensive to take delivery of Bitcoin than to take delivery of an equivalent amount of gold.
Edit: As Trendon Shavers and Mark Karpeles found out.
It most certainly is possible but, unlikely CC companies would ever add this feature.
There's a few popular exchanges that provide this already...haven't used an exchange in a while so I'm not sure which ones nor can I recommend any however this wouldn't be hard to find out.
When gold was the currency there were loans. Even fractional reserve loans.
Lender has 1 oz of gold. He issues a certificate to 10 different people in the amount of 1 oz of gold. People use those certificates as if they are money. At some point someone can claim their 1 oz of gold but they count on not many people doing so.
Bitcoin company issues a Bitcoin credit card, they have 1 BTC and offer 1 BTC worth of credit to 10 different people. The person uses his Bitcoin credit card wherever that credit card is accepted. The merchant then gets a "credit" for however many bitcoins were spent on their merchant account (just a value in the database). The merchant can withdraw their bitcoins or use their own Bitcoin credit card to make further purchases.
They rely on not everyone wanting to take their bitcoins out at once. Otherwise they are screwed, that is why a bank run was always such a big deal to banks...in Mary Poppins they gave a glimpse of what would happen if people wanted their money from the bank all at once.
When it comes to credit limits and whether people pay the bitcoins back, they would be subject to the same credit rating as other credit cards. If you're late, your credit score goes down.
There's a few popular exchanges that provide this already...haven't used an exchange in a while so I'm not sure which ones nor can I recommend any however this wouldn't be hard to find out.
Yes, new of this is Therocktradnig which is able to provide for a credit card which is connected to your personal account. But I advice to be careful because no one exchange is very safe and everyone of this could close one day..
There's a few popular exchanges that provide this already...haven't used an exchange in a while so I'm not sure which ones nor can I recommend any however this wouldn't be hard to find out.
It is possible, but even it happen.
I won't use it, bitcoin will lose it's meaning as anonymous
I won't use it, bitcoin will lose it's meaning as anonymous
How so?
Bitcoin won't lose anything because of some 3rd party services, as long as you can still use it its original form.
A bank, just issues credit on their internal balance sheet. Banks lend more than they have, its called fractional reserve banking.
In fait world, say a bank issues 5 x $1000 credit cards. They don't keep $5000 in a safe to underwrite those cards.
If a "BTC bank" issued 5 x 1btc credit cards, then they would need to keep 5btc just incase all users spent those btc.
You can't give away more Bitcoin than you have. Thats the point.
Its possible, but the issue would be trusting a central authority to settle the balances. Chargebacks are essential so the decentralised way in which Bitcoin works cant be used. In this state there is no advantage of Bitcoin credit card over any normal credit card.
It would be possible. The question remains:
1) Who will fund it?
2) Hardcore unsecured/uninsured debt
3) People will default due to no regulation/free market.
4) There is too much risk on the company doing it. There would need to be regulations in order for it to move forward.
Like. Say I go on BTCJam and fuck over the people I am suppose to pay back? What happens? Nothing.
Right?
1) Who will fund it?
2) Hardcore unsecured/uninsured debt
3) People will default due to no regulation/free market.
4) There is too much risk on the company doing it. There would need to be regulations in order for it to move forward.
Like. Say I go on BTCJam and fuck over the people I am suppose to pay back? What happens? Nothing.
Right?
It will have to be banks, doing all the usual due diligence.
It is possible, but even it happen.
I won't use it, bitcoin will lose it's meaning as anonymous
I won't use it, bitcoin will lose it's meaning as anonymous
How so?
Bitcoin won't lose anything because of some 3rd party services, as long as you can still use it its original form.
Let me think hard. If a company or financial institution decides to issue bitcoin credit card, that entity will be entirely responsible in case there is a default in payment. If too many creditors ended up not paying, the company will go bankrupt. It will not have any impact at all towards bitcoin. Similar like money lending business
this is true for all credit card companies. They need to appropriately manage their risk in giving out loans (via their credit cards).
Let me think hard. If a company or financial institution decides to issue bitcoin credit card, that entity will be entirely responsible in case there is a default in payment. If too many creditors ended up not paying, the company will go bankrupt. It will not have any impact at all towards bitcoin. Similar like money lending business
Why would you want a credit card when you can just use a Xapo debit card?
One of the ideas of btc is to take leverage out of day to day transactions
One of the ideas of btc is to take leverage out of day to day transactions
Certainly possible BUT all the same rules would apply as with normal credit cards.
Any lender putting up serious coin will want to see credit score and proof of identity.
A risk is that the borrower is, likely, paid in fiat and, hence, his ability to repay the loan may diminish over time through no fault of his own. Someone who borrows 100 BTC, for example, might be able to make 2 BTC monthly payments today but if BTC rises to $10k per coin forget about it.
Any lender putting up serious coin will want to see credit score and proof of identity.
A risk is that the borrower is, likely, paid in fiat and, hence, his ability to repay the loan may diminish over time through no fault of his own. Someone who borrows 100 BTC, for example, might be able to make 2 BTC monthly payments today but if BTC rises to $10k per coin forget about it.
Like credit cards, credit score will be important for all borrowers.
I guess the credit limit would have to be monitored closely, maybe with every billing cycle, because of bitcoin's volatility.
Would companies be crazy to allow one to borrow bitcoin and settle any outstanding balances at the end of the month?
this is no different then how fiat based credit cards work today. The only difference would be how the bill is paid
Yes, but if I not wrong, some bitcoin credit card already exist. Anyway, I think that a credit card which have a public key that seems the "IBAN" and the private key in the magnetic band is a good idea to produce it 
It would be possible. The question remains:
1) Who will fund it?
2) Hardcore unsecured/uninsured debt
3) People will default due to no regulation/free market.
4) There is too much risk on the company doing it. There would need to be regulations in order for it to move forward.
Like. Say I go on BTCJam and fuck over the people I am suppose to pay back? What happens? Nothing.
Right?
1) Who will fund it?
2) Hardcore unsecured/uninsured debt
3) People will default due to no regulation/free market.
4) There is too much risk on the company doing it. There would need to be regulations in order for it to move forward.
Like. Say I go on BTCJam and fuck over the people I am suppose to pay back? What happens? Nothing.
Right?
Certainly possible BUT all the same rules would apply as with normal credit cards.
Any lender putting up serious coin will want to see credit score and proof of identity.
A risk is that the borrower is, likely, paid in fiat and, hence, his ability to repay the loan may diminish over time through no fault of his own. Someone who borrows 100 BTC, for example, might be able to make 2 BTC monthly payments today but if BTC rises to $10k per coin forget about it.
Any lender putting up serious coin will want to see credit score and proof of identity.
A risk is that the borrower is, likely, paid in fiat and, hence, his ability to repay the loan may diminish over time through no fault of his own. Someone who borrows 100 BTC, for example, might be able to make 2 BTC monthly payments today but if BTC rises to $10k per coin forget about it.
Yes, it is possible.
It is only a matter of time before traditional banking products are extended to bitcoin as well.
It is only a matter of time before traditional banking products are extended to bitcoin as well.
theres already many bitcoin credit cards like xapo, bitplastic, etc
smh, those are debit cards not credit cards. Jump to: