How can we go about our day-to-day life if we only have BTC and don’t want to spend it? We can evaluate this situation by making a parallel with what high-net-worth individuals, who have solid low-risk assets such as important real estate properties, do today. These individuals have the possibility of borrowing the liquidity they need using their real estate properties to secure their payments. These long-term loans are quickly devalued by prevailing inflation, which always ends up being much higher than the interest rates set by governments, and the borrower ends up highly benefited.

Borrowing fiat-pegged stablecoins collateralized with Bitcoin is a no-brainer, making both lender and borrower feel safe.

Once the borrower deposits BTC as collateral at a given escrow address, the lender sends the agreed-upon stablecoins directly to the address indicated by the borrower. When the contract comes to maturity, the borrower returns the loan plus the interest and refunds his BTC from the collateral address providing his signature along with the lender’s.

All of this is done without the need to provide credit history, guarantees, or any private information; besides that, it is entirely anonymous. While an over-collateralizing Bitcoin loan is enough to guarantee repayment.