Reckless – Chapter 6: Bitcoin Interest Rate

The Bitcoin Interest RateWith no yield or interest rate built into the Bitcoin protocol, a Bitcoin interest rate will only emerge if people start to borrow and lend Bitcoin. Given the complexity and uncertainty of how to determine the interest rate, it is quite challenging to evaluate interest rates in the context of Bitcoin. For now, the Bitcoin interest rate will not be driven by monetary considerations. There is no real significant circular Bitcoin economy emerging and no businesses have Bitcoin denominated revenues (perhaps with the exception of Bitcoin miners and Bitcoin financial services firms). Even if the completely free market approach is adopted for Bitcoin rates, it might not even be the case that the Bitcoin interest rate would be significantly higher than the interest rates for fiat money.