Show HN: Spread bitcoins by lending to friends (opens in new tab)

Bitcoin... a monetary system that requires internet connectivity and CPU usage... in which every transaction is recorded forever and the database is replicated by all participants... is "off the grid"?

While its true for a lot of Bitcoin users, one of our goals was to make bitcoin more accessible to the public and the average person who is interested in bitcoin but doesn't quite know how to get started.

We are using Facebook as a trust network.

Agreed that being on Facebook takes away anonymity, which is one of Bitcoin's benefits. There are also many great non-anonymous uses for Bitcoin- "free PayPal", for example. That's the angle we're taking in this app.

Conversely, this could be a way to bring bitcoin to the attention of people who aren't already in on it.

I think they're using FB as a trust proxy..

There's nothing stopping you from loaning, say, 1.0 BTC and asking for 1.1 BTC to be paid back later, but Bitcoin does not have any mechanism to help enforce such loans. There's a forum dedicated to it: https://bitcointalk.org/index.php?board=65.0 Many people are skeptical of Bitcoin loans since the expected rate of return of holding BTC exceeds the rate of return of almost all legitimate businesses.

Interest is not only to protect the bank (or lender) against inflation. It's also (one of ) the way that the bank gets paid.

For a moment suppose that there is no inflation, no fraud, no bankrupts and no administrative commissions: If the bank gives you $100 and you pay in total $110 then the profit of the bank is $10.

Interest is just a function of a loan agreement - it is an entirely separate issue from the available supply of the currency in question.

Even if you borrow monopoly money from a specific monopoly set, there can still be interest required on the loan. It may be impossible for you to fulfil your loan obligations if your supply of whatever currencies the lender will accept (which does not necessarily only have to be the original loan currency) is limited, but that's a separate issue.

Think of the "Bitcoin economy" as a border-less sovereign country with a floating, fixed-supply currency. This country would still have interest rates, and those rates would still be a function of everyone else's interest rates in a way fundamentally related to the FX rate (complicated, but not insurmountably, by the lack of a low-risk Bitcoin counterparty, thereby holding back the development of Bitcoin collateral and lending markets).

OP here: we are also doing a launch special where every new sign ups will get 0.001 BTC on us.

If you don't own any bitcoins yet, you'll get your first one with BWF :)

But how would you hedge your shorts?

Right now, Facebook is the only good way to know that "Bob Jones" is really my friend named "Bob Jones".

This idea depends on that level social trust. I wouldn't loan out bitcoins to strangers. Just friends who want to learn about bitcoin, as they won't screw me over. Even if they don't return the loan in btc, they might buy me a drink.

+1

People should avoid Ripple. Building an economy under a system that is in hands of one company isn't a very good idea.

Ah! It's a joke (albeit a bad one, by me). The minimum friends limit to join is actually 50.

Thanks Paul!!

Thanks for the feedback Dave. We're looking into the thumbnail issue, is anyone else not seeing the thumbnail?

Thanks! Interestingly, one piece of feedback we got was that the site made bitcoins seem like play money. They definitely have real-world value though. I just used it to pay a friend back for an Amazon order.

Thanks for your help at the hackathon Elliot! You're still user number 3 in the database.