Quote from: polynesia on August 04, 2014, 05:11:30 PM

Quote from: Razick on August 04, 2014, 04:42:54 PM

Quote from: malykii on July 13, 2014, 10:31:13 PM

Say BTC does become the currency that people rely on. How would a loan system work? I would imagine people would still need to take out loans for large purchases, such as cars and houses.

Without a credit system how does something like that play out? Would credit cards in BTC exist, and you still received a credit score that allowed you to take out money for a house? The fluctuation of the BTC price definitely makes it difficult for that model to work.

I am all about Bitcoins, but I can't seem to wrap my head around this part of society that exists, and is still required with our current mentality.

Not sure if this is the right location for this, but I figured this would be a good place to start.

It is literally no different than cash with regards to loans. Sure theoretically someone could run off with Bitcoin... but, the same could be said for cash loans. It's all about credit scores. Someone with a $25,000 credit could refuse to repay, but over time they've proven that unlikely. The same will go for Bitcoin. No one is going to loan you 10,000 BTC anonymously, but if you stake your credit or collateral on it, they may.

Would a default on a bilateral BTC loan mess up a person's credit score?
If not, then a person with a good credit score might also refuse to pay...

I don't know how credit scores work, so it may or may not work that way right now, although I think it does as long as it's done right, but presumably in the future it will for sure assuming Bitcoin becomes more mainstream.

Keep in mind that there is also civil liability involved. As long as a person's real identity is tied to a loan, and the loan is large enough to be worth it, they could be taken to court if they refuse to pay. Even if they refuse to pay or declare bankruptcy I'm pretty sure either one of those actions would (severely) harm their credit score.