Re: The real bitcoin killer app is already here

The traders pay interest on the loans out of their exchange wallet. It is a way to leverage your balance to get a larger return. Any borrowing in any currency requires repayment of a certain percentage over what you borrowed. Have you ever bought a home? A car? Same thing.

I'm well aware of how trading accounts work, and loans in general. Thats why i find i it odd anyone thinks this is a killer app for Bitcoin.

I think they are referring to the ability to stockpile coins and have them actually grow the way fiat used to before the monetary system was destroyed. It creates more demand because holding them is even more profitable.

It should be noted that this would not be without risk. In the event of a market crash/spike then the exchange may not be able to liquidate traders' positions at a rate that would allow them to fully repay their margin loans. The lender would have to take a loss if this were to happen.

QFT.

Increased reward is almost always associated with increased level of risk. Remember that. And don't get too greedy.

This is not 100% true in terms of lending to margin traders as any loan could potentially end up turning bad regardless of the interest rate in relation to the market rate