I started to think about it. How a bank and folks could issue loans to people?
Currently, when you need to borrow money, your banker just edits your balance account and create money magically. You then pay back monthly.
Banks won't be able to do that with Bitcoin with its limited supply. You can't print bitcoins.
But now, between folks. Let's say I'm the banker and you're the customer looking to borrow money to buy a house. I can lend you the money but how to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.
I am just wondering here. Lets assume that there is this 3rd person in addition to the guy who gives out the loans and the guy who takes it. All this guys have bitcoin addresses. So the 3rd guy is the one who is saying that this guy ( who is taking the loan) is stand up guy and will repay you, i vouch for him. THen all these 3 parties are tied together with smart contract and here you go you have a smart contract.