Yes a few people have.
Its not a wise thing to do in bitcoin though.
Its not a wise thing to do in bitcoin though.
I understand the wisdom of it. Fiat money relies on usury. CB's need to print more money to satisfy repaying the original loans. My question is if bitcoins start earning interest, where will this extra money come from to pay of the principle?
Loan percentages will be the same as they are today, less current inflation. So for a low-risk loan, such as a home mortgage of a person with good credit, you might see a loan of 2.5% to 3.0%. For a higher-risk loan, say, a credit card of someone with bad credit, you might see a 27.99% interest rate (vs the "normal" 29.99% interest rate).
The lender will always have to consider risk into the equation, and they are not going to lend without some form of profit ABOVE AND BEYOND the gains/losses of the currency itself.
Because the currency is deflationary, it will mean fewer people will be willing to take out loans. Instead, they will be more encouraged to save until they have enough to purchase whatever they want.
Some people want to sell BTC short (this means betting on a price decline). These short sellers will pay to borrow your BTC, in order to sell them with the hope of buying those coins back later at a lower price. So someone could setup a bank that offers interest to depositors, paid by the people who borrow BTC to sell short. Those "borrowing" the BTC might not need to physically hold the coins if they are to be immediately sold short into the market. This would prevent people from running off with depositors' coins. However there will need to be a lot of collateral on hand from the short seller, otherwise if the price of BTC goes up quickly, there could be problems for the bank and the person who loaned the BTC.
Yet fiat was adopted to facilitate margin leading. In the future if bitcoins are to be used for trade what facility unlike fiat is to be used to create new capital? People won't simply lend bitmoney for free.
No one needs to lend for free in the scenario I described. Nor does 'new capital' need to be created.
In a bitcoin universe if I needed to open up a mine, build a factory, develop a new tech (new capital) where will I get the bitfunds to pay for labor?