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Comment by Semaphor | Hacker News Reader

But that’s coinbase being a bank, not BTC. There are coins that have loans via smart contracts, but they aren’t BTC. What’s happening here is closer to "An exchange is offering banking services" which sounds a lot less weird.

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But the real question is why this particular banking service exists? If Bitcoin is the stable currency it was designed to be, then it would be nonsensical for a person already holding it to borrow 30% of its value in USD at 8% APR. The answer of course is that some people are so convinced that BTC will rise in value by more than 8% over the loan duration they're prepared to go into debt to keep large portions of their net worth in it, and some might even fancy buying more BTC with the cash they've borrowed, and maybe borrowing against that too. In this analogy BTC isn't the bank, it's the houses people were taking out the subprime mortgages on (minus the upside of avoiding rental payments)

> If Bitcoin is the stable currency it was designed to be,

My impression is, that this is a pretty contentious statement ;)

but bitcoin wasn't designed to be stable (or unstable). it was designed to match the properties of gold, but digitally. I think it has somewhat succeeded.

Bitcoin was designed to be a Peer-to-Peer Electronic Cash System

1 BTC is still worth 1 BTC. Seems pretty stable to me.

This doesn’t really work as an argument. Obviously the thing to look at is the purchasing power. If the amount of bread, industrial equipment, and land, that you can purchase with a given amount of currency A, varies much more than it does for currency B, then the purchasing power of currency A varies much more over time than that of currency B.

This is obvious.

Loans aren't subject to taxation in the US.

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