1000 sats \ 0 replies \ @jeff 27 Mar 2022 \ parent \ on: Where is the tipping point in inflation? bitcoin
I don't think it's the rate that does it. It's the convenience/practically.
Let's focus on working-class bitcoiners for a moment. Earning in fiat, auto-deposit into their bank. Bills/rent, are all in fiat.

Spend and replace - month end

Pseudo code of what most are probably doing right now (notice, at no point, are we really spending in BTC):
bank_account = TradeFiBankAccount(KYC)
bank_account .receive_paycheck(employer1, 'USD')
for bill in bills:
    bank_account.pay_bill(bill, 'USD')
bank_account.buy_btc(amount=current_balance, 'USD') # costs fees, time, hassle

Spend and replace - each bill

The following algorithm is what some bitcoiners want to do, but realize it's irrational...
bank_account = TradFiBankAccount(KYC)
bank_account.receive_paycheck(employer1, 'USD')
bank_account.buy_btc(amount=current_balance, 'USD') # costs fees, time, hassle

for bill in bills:
    bank_account.sell_btc(amount=bill.amount + fees)
    bank_account.pay_bill(bill, 'USD')
It's the fees, time & hassle, which are the real issue.
Now, why can't somebody setup this business:

Spend and borrow/re-pay instantly

some_amount_of_btc = 0.1
bank_account = TradFiLikeBankFocusedOnMagicInternetMoney(KYC)
bank_account.deposit_btc_collateral(some_amount_of_btc, 'BTC')
line_of_credit = bank_account.new_line_of_credit(value=0, max=some_amount_of_btc * 0.5)

for bill in bills:
    if line_of_credit.has_capacity(bill.amount):
        line_of_credit.pay_bill(bill, 'USD') 

        if bank_account.settings['instant']:
            line_of_credit.pay_down(bill.amount, 'USD') # spot market conversion
        else:
            start_sending_email_to_user_daily(bill.amount)
     else:
         send_email_asking_for_more_btc(bill.amount)
Fees:
  • 0% fees on the implicit conversion from btc to usd
  • Slightly higher than market rates on normal lines of credit (but since it's fully secured by collateral, it's actually arbitrage like)
The software would all be cheaper and more secure to maintain than an exchange (no withdrawals, just deposit & balance tracking), and would act like a one-way system (BTC in, bills paid out). The business only needs working capital to pay the bills on user's behalf.
...thinking outloud. Anybody want to partner to build this? Or, can somebody please just steal this idea?
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