Could Bitcoin Be The Solution For US Student Loans?
Millions of students in the United States choose loans as a means of education. Student loans are the second largest category of consumer debt in the country, after mortgages. In a major relief, US President Joe Biden announced student loan forgiveness of up to $10,000 and $20,000 before the midterm elections. While many experts have given the move a thumbs up, however, some believe this will not be enough. Dennis Porter, CEO and co-founder of Satoshi Act Fund proposes Bitcoin as the solution for US student loans.
Explaining why Bitcoin is the solution to US student loans, Porter tweeted, “instead of forgiving $10,000 in student debt, Biden should have given each person $10,000 in Bitcoin, locked for 10 years in a smart contract that pays off the remaining balance of student debt when released.”
“Problem solved, no more debt,” Porter said.
Could Bitcoin be the solution to US student loans?
Porter’s statement caught the attention of many Twitterati. Most of them feel that Bitcoin is not the necessary solution for US student loans.
One user responded to Porter, saying, “I know you think this is smart… but what do families do with the debt they can’t pay for the 10 years. Bitcoin is great, but it’s not the solution to everything. Read the room, my guy.”
As another user said, Bitcoin has the potential to solve money problems.
Another user commented, stating that “you simply cannot choose when to accept loan forgiveness or a subsidy from the fiat lords.” You are either a self-sovereign free individual or you belong to the matrix.”
Meanwhile, another user liked the idea but believes that not necessarily Bitcoin, but instead a US-backed blockchain, is a better option for smart contracts and further student loan repayments.
Also in the thread, Porter tweeted: “You can unlock bitcoin with a bitcoin smart contract. It’s literally the center of the lightning network’s existence.” He also released a Hash Time-lock Contract (HTLC) link.
According to the Lightning Engineering document, Hash Time-lock Contracts (HTLCs) are the centerpiece of any Lightning transaction. While your Lightning Network channel is a 2-of-2 multi-signature address with funds on the bitcoin blockchain, an HTLC is an output of an unconfirmed transaction to a separate “smart contract”.
Under the document, it said, the smart contract can be used by revealing a “secret” along with a valid signature from the recipient. While it can be redeemed after a certain time along with a valid signature from the sender. The smart contract can also be used immediately by someone who presents a revocation key.
Ideally, this transaction never needs to be committed to the blockchain. Instead, when the preimage is revealed by the recipient, the balances of the channel can be updated, creating a new commitment transaction and invalidating the previous one, it said.
So let’s understand what is Bitcoin Smart Contract.
Bitcoin smart contract:
According to CoinGeek’s website, a Bitcoin smart contract is a digital agreement. It is a software code that is stored and then executed across all nodes in the Bitcoin (BSV) Blockchain network.
Here, the creator of the smart contract establishes the rules and is agreed upon by the parties involved. Once the contract is stored on the blockchain, it will remain there forever, meaning that the code in that location will never change. The Bitcoin (BSV) ledger stores and replicates the agreement, giving it security and immutability.
Furthermore, it explains that Blockchain smart contracts do not just define the rules around an agreement. Smart contracts are also responsible for automatically executing these rules and obligations. There is no central authority required to run the software to function seamlessly.
Get all the business news, market news, latest news events and latest news updates on Live Mint. Download Mint News app to get daily market updates.
More less
