Following United States President Joe Biden’s announcement of a student loan forgiveness plan that aims to cancel the debt of up to $20,000 for millions of Americans, a Bitcoin (BTC) supporter proposed an alternative method to pay off the loans.
Dennis Porter, the CEO of the non-profit organization called Satoshi Action Fund, tweeted that there’s another way for the U.S. government to solve the student loan issue. According to Porter, Biden could give each debtor some BTC worth $10,000 and lock it within a smart contract for 10 years. The non-profit executive explained that the contract should be sufficient to pay off the remaining balance once it is released.
Community members criticized Porter’s mention of a smart contract as some believe that the Bitcoin network cannot support this. One Twitter user replied to Porter and urged him to not just “lump random things together,” while another said that BTC is not the solution for everything.
… 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.
— The Dough (@PennDusko) August 24, 2022
In a response to the Twitter thread, fintech executive John Wingate told Porter that this can’t be done with only Bitcoin. Wingate also asked Porter if this is his admission that BTC needs to expand its use cases.
Despite the criticisms on smart contract compatibility for Bitcoin, Porter stood by his proposal and defended his stance. The executive also shared a link to a guide detailing a method on how smart contracts can be used to time lock Bitcoin:
“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
Porter’s suggestion may be based on the assumption that Bitcoin will work as a hedge against inflation and that its value will increase over time, enough to pay student loan debt. However, for BTC to become an effective inflation hedge, Skybridge Capital CEO Anthony Scaramucci thinks that Bitcoin needs to be in the “billion-plus zone” in terms of the number of users.