Super Testnet on Nostr: > what is stopping Bob from running away and not paying the BTC back? I figure Bob ...
> what is stopping Bob from running away and not paying the BTC back?
I figure Bob has to put up 2 btc collateral if he wants to borrow 1 btc
> what’s the incentive for taking out that BTC loan in the first place, when you already have that amount of capital to begin with?
Tax arbitrage might be a use case for btc-only loans
If you live in a land where btc gains are not taxed, lend them to folk who live where they *are* taxed
Then they spend the *new* (to them) btcs. Their *old* bitcoins are only collateral, which has no significant capital gains
I figure Bob has to put up 2 btc collateral if he wants to borrow 1 btc
> what’s the incentive for taking out that BTC loan in the first place, when you already have that amount of capital to begin with?
Tax arbitrage might be a use case for btc-only loans
If you live in a land where btc gains are not taxed, lend them to folk who live where they *are* taxed
Then they spend the *new* (to them) btcs. Their *old* bitcoins are only collateral, which has no significant capital gains