Q: Is Bitcredit another altcoin? 

A: Bitcredit is not an altcoin. It is a claim to future bitcoin. It is a money substitute with two additional attributes vs bitcoin:
(1) a maturity date

(2) an issuer

Q: Why is it called Bitcredit?

A: It is a portmanteau, short for "Bitcoin credit money". One bitcredit is a claim to one future bitcoin.

Q: Does Bitcredit pay interest?

A: No. Held in your non-custodial wallet, bitcredit is non-inflationary, trust-minimised credit money. If you wish to earn interest you can lend it out, thereby accepting credit risk.

Q: What is a bill of exchange?

A:  It is a time-proven, private payment instrument which has been in use since the Middle Ages. The Geneva Convention of 1930 regulates them, world-wide.

Q: What is an e-bill?

A: The UN Vienna Convention of 2017 approved a model law for electronic bills of exchange. The UK enacted the law in September 2023, as the first major trading nation to do so.

Q: Ok, but how do bills of exchange work?

A: Long forgotten basics! Here is a nice, geeky explainer.  

Q: Can e-bills be denominated in bitcoin? 

A: Bitcoin is legal tender in El Salvador, so why not?  

Q: What is a Bitcredit mint?

A: A credit mint - a 'wildcat' - splits an e-bill's amount into e-cash tokens redeemable in Bitcoin, like standardised fungible e-bills.

Q: What is a Bitcredit mint?

A: Bitcredit mints run "Wildcat" , a free open source software. They transform eligible commercial e-bills into bitcredit and guarantee e-bill redemption with verifiable capital. This minimises the residual trust requirement from end users.

Q: Can mints create Bitcredit out of thin air, like central banks create fiat money?

A: No, they cannot. Bitcredit Protocol only permits the minting of e-bills verifiably issued against real value as proof of work.

Q: Isn't Bitcoin base money too volatile for a credit money?

A: Initially yes, it is a chicken-egg problem. The monetisation and stabilisation of bitcoin must start somewhere. We expect volatility to decline rapidly with the buildup of a credit superstructure backed by real goods.

Q: What will the price of Bitcoin do when Bitcredit gains traction?

A: With the monetisation premium, Bitcoin's value will rise to its true, natural level and stabilise.

Q: What if Bitcredit cannot get traction?

A: Without elasticity, Bitcoin cannot serve the real economy. Its current use case as a store of value may continue for a while, however if some other digital currency, like a CBDC, succeeds as a general medium of exchange, the value of Bitcoin will evaporate.

Q: What does "stable" mean?

A: The general purchasing power of a 'stable' money remains roughly equal. It reflects conditions of production and supply and cannot be debased by government. Its price may still fluctuate but market forces will soon revert it to its true value.

Q: How can the value of Bitcoin become stable?

A: Think of Bitcoin as a fixed quantity of base money (MO), similar to gold coins in the past. Today, it is hard to imagine that the value of gold was stable $20 for more than a century. Issuance of "yellowback" $20 banknotes balanced money supply with demand.

Q: But Bitcoin value can only be stable if its supply matches demand?

A: Exactly. When businesses experience high money demand, the free market will create more suppy, for a price.

Q: Bitcoin supply is fixed, Bitcredit is elastic. Will this cause inflation?

A: Not with a sound money policy: issuance against real value only, no more thin air.  Central banks cause inflation when they print money to "buy" government debt which is a naked promise of future value.

Q: Economic fluctuations are a fact, volatility just moves elsewhere?

A: In a free market, mints' fees will rise with increasing money demand. This regulates credit money supply.

Q: How about people's right to privacy?

A: For individual end users, Bitcredit payments give privacy because Bitcredit mints issue private e-cash. Bitcredit clearing on mainchain only shows final UTXO balances, usually for B2B players.

Q: How about business users' privacy?

A: Every e-bill is encrypted by a unique key pair, only known to the involved business partners. If desired, e-bills can satisfy KYC and AML requirements.

Q: Will I lose my Bitcoins if the issuing mint goes under? 

A: No. It is the payer of the underlying e-bill who must pay. Bitcredit splits the e-bill payment input into Bitcoin UTXOs which only your private key can spend. 

Q: Who decides the rules of Bitcredit or coordinates development efforts?

A: Bitcredit has a decentralised "ungovernance" which means: 

(1) deliberative processes (structured debates, prediction markets, unconferences, polls),

(2) concluded by transparent voting weighted by eIOU holdings,

(3) which establishes the non-binding general will of contributors to the projrect.

Q: Who verifies the quality of underlying e-bills?

A: TI their own interest as guarantors, the wildcats check the encrypted invoice. 

Q: Why not outright Bitcoin?

A: A good base money needs a stable purchasing power. If bitcoin holdings were to guarantee mints' fluctuating issue of Bitcredit, fluctuating demand for Bitcoin would cause price volatility.

Q: Why not gold?

A:  Gold is not a good reserve asset for a Bitcoin system:
(1) High risk of political capture, like so often in the past.
(2) Unacceptable trust required, or trust in auditors.
(3) Handling cost and slow recourse process.

Q: Who needs eIOUs?

A: Businesses and end users are not concerned with eIOU. Only Bitcredit mints need them to prove their dedicated guarantee capital.

Q: Is eIOU a security?

A: No, it is not. eIOUs are a digital commodity. They are no investment in any entity, they give no rights and pay no dividend. They do nothing. You can buy and sell them, like any commodity.

Q: A meta money? So, I can pay with it?

A: No, you cannot. "Meta money" means that it has a systemic function in a monetary system. In simple words, it absorbs Bitcoin's volatility to stabilise its purchasing power.

Q: You mean it does nothing?

A: Not quite. It enables bitcoinisation, the emergence of a Bitcoin based monetary system: eIOU absorbs Bitcoin's volatility and helps to stabilise it at its natural fundamental value. 

Q: Can eIOUs be generated out of thin air?

A: No, they are issued similar to Bitcoin's halving, by a geometrically declining issue every 3 months, roughly 13,500 Bitcoin blocks. Voting of eIOU distribution for delivered work is done monthly, roughly 4,500 Bitcoin blocks.

Q: How many eIOU are there?

A: The genesis issue comprised 42 million eIOU for the first 3 months, the size of each subsequent quarterly issue declines by 4.2%. In total there will be 1 billion eIOU when Bitcoin reaches its supply maximum of 21 million.

Q: Who owns these eIOUs?

A: Contributors of Bitcredit work items receive rewards in eIOU agains proof of work, subject to voting. Feel free to apply with a proposed contribution or deliverable.

Q: What enforces a mint's guarantee?

A: Game theory. Any unpaid e-bill "dishonours" its payer. It also blocks further Bitcredit creation by its mint, like a red traffic light, until they honour their guarantee. So, mints better pay up fast. 

Q: Is this fractional reserve banking or full reserve banking?

A: It a new take on full reserve banking, proof of value. With Bitcredit Protocol, it is the e-bill's payer who redeems Bitcredit with Bitcoin exactly at maturity, not earlier not later. No more bank runs.

Q: Bitcredit stops fractional reserve banking?

A: There will be time deposits but no more demand deposits because Bitcoin and Bitcredit are non-custodial. In future, borrowers will want the lender to send the full amount immediately to their wallet. 

Q: Is there a lender of last resort?

A: The Bitcredit system neither has, nor needs, a lender of last resort. It is atomically decentralised through e-bills with strong guarantee chains, default is rare and of no systemic consequence.

Q: What is Neo-Austrian Economics?

A: Prof. Antal Fekete wrote the Neo-Austrian Manifesto in 2013 against the ossification of Austrian Economics and proposed several new ideas, including a new take on the Real Bills Doctrine.