Why Bitcoin Is Pristine Collateral — Bitcoin Magazine

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This is an opin­ion edi­to­r­i­al by Leon Wankum, one of the first finan­cial eco­nom­ics stu­dents to write a the­sis about Bit­coin in 2015.

Today, the most com­mon form of col­lat­er­al used by a bor­row­er to secure repay­ment of a loan to a lender is real estate. This prac­tice is com­mon among mort­gages, per­son­al loans and busi­ness loans. Banks lend to peo­ple and insti­tu­tions that own real estate. Oth­er com­mon forms of col­lat­er­al include busi­ness inven­to­ry, cash, stocks and bonds. I will show why bit­coin has the poten­tial to become the col­lat­er­al of choice in the future.

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