[em_te]

> the cryptobros realize that the reason for interest rates isn’t the transaction cost or the paperwork but the enforcement arm to get people to complete the whole transaction through to the end.

It's interesting you brought that up because crypto has a similar mechanism to get people to complete the whole transaction and resolve disputes without involving interest rates.

For example, imagine person B was buying a product from A. Should A send the product first or should B pay first.

When both sides don't want to take the initiative, they use an escrow contract on the blockchain where both sides have to lock up 150% to 200% of the value of the product in crypto inside the contract.

A then sends the product.

B receives the product.

If B accepts the state of the product, he can press a button to release the relevant amount of crypto in the contract to A and refund the extra 50% to 100% he had to put up.

If B sees the product is fraud, he presses another button and both sides lose all their crypto. This disincentives both A and B from committing fraud.

There are more nuanced conditions involved so I won't bore you with the details, but the main concept is there and it doesn't involve interest rates.

[JohnFen]

> If B sees the product is fraud, he presses another button and both sides lose all their crypto. This disincentives both A and B from committing fraud.

That can't possibly be right. It would mean that if person A defrauds person B, person B would lose 150-200% of the asking price, rather than just 100% if no "crypto escrow" were used at all.

[tsimionescu]

If that's not a scathing indictment of the kinds of simplistic thinking that cryptobros think can solve real world problems, I don't know what is.

Of course, the fact that it makes it impractical to buy any kind of expensive product is merely a detail. As is the extreme cost of non-fraudulent delivery failures in this scheme.

[seabird]

Nobody is going to post 150% collateral on a capital expenditure where the delivery can take months/years.

Cryptocurrency is finance as imagined by people who have never bought anything more expensive than a car or house.

[HideousKojima]

That's just escrow but worse, and could already be accomplished with a non-blockchain based escrow service. What exactly does crypto add here?

[oblio]

A chance for em_te or likeminded folks to make money in some new and interesting way, that they couldn't have made otherwise :-)

[akiselev]

Interest rates exist to incentivize loans in a universe where there’s a risk borrowers might not pay them back. The Roman Catholic Church decisively proved during the middle ages that no interest = no loans

You just described escrow with extra ~steps~ risk which has nothing to do with loans unless you’re suggesting borrowers put up 150-200% of the capital they want to borrow? (!?!?)