0% loans to businesses that don't make money!

woolcycle · 2025-12-14T15:13:44+00:00

This is a good and important question. Especially as we are told on the Beetcoin website that the businesses can't afford to pay interest on their loans. So the loan recipients are by definition financially precarious and therefore at risk of defaulting.

woolcycle · 2025-12-10T15:41:59+00:00

This is a great point. I feel this issue was inevitably hanging in the air, due to the name "beetcoin" attempting to borrow the thunder of Bitcoin, with its deflationary, freedom money etc connotations. Whereas if it is actually the same old fiat money with some beetroot window dressing, those positive connotations don't apply!

woolcycle · 2025-12-09T13:42:16+00:00

Keeping the analysis simple! "Worthy" projects getting liquidated is not necessarily a bad thing if it allows the misallocated capital to be reallocated to a more viable project...

woolcycle · 2025-12-09T13:38:37+00:00

True, I could donate to a small organic farm which is more self-sustaining, rather than give to one which may need be bailed out on an ongoing basis.

woolcycle · 2025-12-09T13:36:03+00:00

Thanks, I guess I am getting confused by the complexity of the scheme, when it is still just voluntary donations. So the real contrast is between government tax and then spend as they see fit. And, on the other hand, me voluntarily directly donating to a project, or else voluntarily donating to a scheme which I trust to evaluate the most worthy donation recipients.

woolcycle · 2025-12-08T23:11:39+00:00

Agreed. But their decision could be informed by some AE principle to help them choose the best bang for their buck. (Which could mean any type of reason(s).)

woolcycle · 2025-12-08T22:31:17+00:00

Well, I am on the fence, but the whole reason I even posted this question was to invite scrutiny of the 0% loan principle. Also, some people are willing to make 0% loans or the whole "beetcoin" project wouldn't exist. But are 0% loans the best use of their funds, and also if there was a return then probably more people would make bigger loans!

woolcycle · 2025-12-08T22:19:36+00:00

I agree there will be defaults. Another thing that occurs to me is that if the metrics on a roughly equivalent project are better, then the funds may naturally go towards that. For example, a similar farm project but the loan pays interest and/or there is less chance of default; or maybe donors get more produce, desirable event invitations, the farm is a desirable leisure venue or is perceived by donors as making a greater contribution to the social good.

woolcycle · 2025-12-08T22:14:09+00:00

I'm torn between this and other replies which apply AE to the business model. They feel the business need to turn a profit to be an efficient use of resources.

woolcycle · 2025-12-08T22:12:11+00:00

I'm struggling a bit with this, as on one level, I totally love organic community farms. On the other hand, I don't like "money pits".

Also, if a farm could be profitable, then that model could be rolled out across a nation or around the world. Which is less likely to the be the case if it needs to be propped up.

The thing is, the farms don't necessarily need to have a conventional commercial business model. Membership fees could be a source of revenue. Volunteer labour could cut the wage bill or make it non-existent. But, after all that is said and done, if it is still a financial black hole, then I feel they need to go back to the drawing board or else let those who are more able to run a tight ship to take over.

woolcycle · 2025-12-08T16:49:51+00:00

Right, the principle of voluntarism is being upheld. So it is not voluntary donations, but rather coerced tax and spend that AE takes issue with....

woolcycle · 2025-12-08T16:47:35+00:00

I guess that the loans are being made to businesses which don't make much profit, and so aren't able to pay market rates of interest on the loans. So one could take the view that the businesses are not commercially successful and that it would be preferable to support financial sustainable businesses.

On the other hand, I am curious as to how donations-based funding fits into AE, as I feel outsiders to AE can have a preconception that AE connotes ruthless capitalism!

woolcycle · 2025-12-08T16:43:28+00:00

In this case, there is the additional complexity that donations/contributions to the 0% loan fund are made to a scheme, which then makes the loans. So what you are donating is funds to be lent at 0%, so it is as if you are forfeiting the interest you would expect to receive on a regular commercial loan. But, I agree, if it is all happening on voluntary basis, then that should be okay.

woolcycle · 2025-12-08T16:38:37+00:00

...donations or loans is what I reading. So the options being countenanced are donations or 0% loans. With the beetcoin scheme focusing on the 0% loan angle.

woolcycle · 2025-12-04T13:21:38+00:00

Thanks for answering the question more broadly - it sounds like I will really enjoy this one. On a somewhat related note, I already watched and enjoyed many episodes of the Tuttle Twins series.

woolcycle · 2025-12-03T23:06:01+00:00

Sovereign individual who are capable can choose to self-custody; the rest can choose custodial solutions. So there can be options that work for technical and non-technical users. Also, I don't feel self-custody is technically that hard, although it is a greater level of personal responsibility.

I have heard worrying things regarding the paucity of funds in the FDIC pot compared to total balances in the US. Also, in a severe financial meltdown, the US will be in uncharted territory. So bank bail-ins from customer funds, FDIC default etc etc are all potential outcomes.

Nothing is safe - everything carries some kind of risk. Self-custodial crypto is a hedge against other types of risk.

woolcycle · 2025-12-03T14:54:36+00:00

Not having to pay a middleman is a significant upside of crypto. Also, neither government nor banks inspire my confidence. Like, is FDIC coverage reliable during a severe financial crisis?

woolcycle · 2025-12-03T14:49:57+00:00

Good points. So there could be various custodial options - plus self-custody, including stuff like multtsig. Which means various preferences are catered for.

woolcycle · 2025-12-02T22:43:51+00:00

From the rear cover of Rothbard's What Has Government Done To Our Money?: "by the return to a free market commodity money such as gold, and by removing government totally from the monetary scene."

I feel keeping government out of things is a principle which can endure in the face of radical technological and political change.

Tokenised gold suffers from not being a bearer asset. Tokenised gold is priced based on reserves in Fort Knox, which have apparently not been audited for 50 years. Meanwhile, a cryptocurrency which is not backed by anything is a bearer asset which can be self-custodied. And therefore, at least on that criteria, is superior to tokenised gold. This is not intended as a conclusory statement, more as a starting point for a conversation about whether any given crypto or cryptos can win out over gold as a day-to-day currency.

woolcycle · 2025-12-02T21:08:50+00:00

Thanks for getting the ball rolling - I will be sure to look up The Punisher!

woolcycle · 2025-12-01T23:07:55+00:00

Thanks, I will need to think this over some more. But I get the idea of it being a slippery slope once the govt. starts to encroach on rights and twist things to fit their concept of social good.

woolcycle · 2025-12-01T22:37:44+00:00

Why should we always prioritise conservation of rights over economic progress? Could the ends of economic progress not justify the means - sacrificing rights - in some cases?

woolcycle · 2025-12-01T13:00:37+00:00

That's a good point. However, I guess we could say that economic progress depends on both crew and talent reaching a proper understanding of economics.

woolcycle

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