PizzAndy on Nostr: So I would say this is a very true statement for the majority of consumer credit that ...
So I would say this is a very true statement for the majority of consumer credit that we see today.
However I believe you're neglecting two aspects that we don't generally see today because of artificial interest rates:
1. The interest rate of the loan would be directly proportional to the risk associated to it.
Because our brains are biologically the same as they were 100k years ago, people will always want more than they truly have. There will always be an opportunity to make and lose money through credit due to this.
The rate of interest would be determined knowing that the value of bitcoin will continue to increase. Let's say by then Bitcoin increases in value relative to everything else ~5% on average YOY. The rate of the loan would need to cover all the expenses+profit to service the loan, plus that 5%. The profit is directly correlated to the risk of the investment.
2. Land has inherent value and always will. Things need places to be. Owning land is the second best asset after Bitcoin. Food needs a place to grow, livestock needs a place to graze. Even waste products need to go somewhere.
The house itself will decrease in value over time, but land is still scarce and has value. Once land's true utility value stabilizes in a deflationary Bitcoin economy, I would expect land value (on average) to keep steady, or slightly lag behind Bitcoin.
That's a long winded way to say that land can still be repossessed and sold as an insurance to secure the loan same as now.
A loan is nothing more than a gamble of the future. And I don't ever expect people to stop gambling. It's the one addiction where the next hit might actually change everything for the better.
However I believe you're neglecting two aspects that we don't generally see today because of artificial interest rates:
1. The interest rate of the loan would be directly proportional to the risk associated to it.
Because our brains are biologically the same as they were 100k years ago, people will always want more than they truly have. There will always be an opportunity to make and lose money through credit due to this.
The rate of interest would be determined knowing that the value of bitcoin will continue to increase. Let's say by then Bitcoin increases in value relative to everything else ~5% on average YOY. The rate of the loan would need to cover all the expenses+profit to service the loan, plus that 5%. The profit is directly correlated to the risk of the investment.
2. Land has inherent value and always will. Things need places to be. Owning land is the second best asset after Bitcoin. Food needs a place to grow, livestock needs a place to graze. Even waste products need to go somewhere.
The house itself will decrease in value over time, but land is still scarce and has value. Once land's true utility value stabilizes in a deflationary Bitcoin economy, I would expect land value (on average) to keep steady, or slightly lag behind Bitcoin.
That's a long winded way to say that land can still be repossessed and sold as an insurance to secure the loan same as now.
A loan is nothing more than a gamble of the future. And I don't ever expect people to stop gambling. It's the one addiction where the next hit might actually change everything for the better.