Following US President Joe Biden’s announcement of a student loan forgiveness plan that aims to write off up to $20 billion in debt from millions of Americans, a Bitcoin (BTC) supporter proposed an alternative method of paying off loans.
Dennis Porter, CEO of the non-profit organization called Satoshi Action Fund, tweeted that there is another way for the US government to solve the student loan problem. According to Porter, Biden could give each debtor $10,000 worth of BTC and lock them inside a smart contract for 10 years. The nonprofit executive explained that the contract should be enough to pay off the remaining balance once it is released.
Community members criticized Porter’s mention of a smart contract as some believe the Bitcoin network cannot support this. A Twitter user replied to Porter and urged not to “lump things together at random”, while another said that BTC is not a one-size-fits-all solution.
… I know you think this is smart… but what do families do about the debt they can’t pay for those 10 years. Bitcoin is great but it’s not The Solution for everything. Read the room, my guy.
— Degen (@PennDusko) August 24, 2022
… I know you think it’s smart… but what do families do with the debt they can’t pay for those 10 years? Bitcoin is great but it is not The Solution for everything. You have to realize, my friend.
In a response to the Twitter thread, fintech executive John Wingate said Porter that this cannot be done with Bitcoin alone. Wingate also asked Porter if this is his admission that BTC needs to expand its use cases.
Despite the criticism about the compatibility of smart contracts with Bitcoin, Porter stood by his proposal and defended his position. The executive also shared a link to a guide detailing a method on how smart contracts can be used to lock Bitcoin in time:
“Got you Dennis! You said smart contract! Bitcoin can’t do smart contracts!”
Wrong. You can lock up bitcoin with a smart contract on bitcoin. It’s literally the centerpiece for the existence of the lightning network. https://t.co/NcjbpX6vur
— Dennis Porter (@Dennis_Porter_) August 24, 2022
“I got you Dennis! You said smart contract! Bitcoin can’t do smart contracts.”
It is not like this. You can lock bitcoin with a bitcoin smart contract. It is literally the centerpiece for the existence of the lightning network.
Porter’s suggestion may be based on the assumption that Bitcoin will function as a hedge against inflation and that its value will increase over time, enough to pay off student loan debt.. However, for BTC to become an effective hedge against inflation, Skybridge Capital CEO Anthony Scaramucci believes that Bitcoin has to be in the “over a billion zone” in terms of user numbers.
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