Using crypto to pay tuition? Say hello to INLOCK!

“Blockchain, bitcoin, ICO, smart contracts — it can be dizzying just trying to understand the basic definitions tied to these emerging assets.”

Although this is true, it does take some time to grasp them all, I think it’s safe to say most of those who own crypto understand at least the basics:

The number of available bitcoins is limited, so as demand increases, probably price will follow A decentralized, censorship resistant, open network could be the ultimate solution to many of the problems with our monetary system.

People are more so incentivized to Invest in an asset they believe will — unlike traditional fiat currencies — increase in value in the long run than in something that’s just worth less and less each day.

The younger generation doesn’t like control, they don’t like censorship, and they definitely don’t like it when something is not 24/7. “Dear customers, we are sorry to inform you that our blockchain is closing a little earlier today, please settle all your transactions by 4pm” is something they will never hear. They believe in owning what’s theirs and doing what they want to, when they want to. It’s no accident Gen Z and Millennials love crypto so much, they have this sense of connection, this feeling you have when an artists work resonates with you, you feel like it’s talking to you! If we want to have any chance in getting through all the noise surrounding them, all the distractions of living life in the binary world, we need to talk to them in a manner they’re familiar with, in a language they understand and live by, the language of freedom and equality!

Gen Z is the first generation that has to face the results of political events of the past 30 years and they don’t want to accept it. The tuition is asymmetric, meaning they don’t make enough right after graduation to pay the fees. The example their parents set was that everything is going to be alright if you just study and work. Now the adage still holds true, although they might need to work a lot harder to get the same results.

As Kevin Rooke pointed out in one of his recent tweets0, “crypto classes are hugely popular” amongst students.

Saving is a lot more enjoyable with a belief that our investment will increase in value. When we see crypto prices soar, we have this overwhelming feeling of success that we made the right decision to invest, and we believe we have a certain amount more than when we started. Along comes a correction, and we start to panic, we feel like we should have cashed out at the top. In hindsight, it’s always easy to examine a chart and to beat ourselves up about why we didn’t make the best possible decision, while the truth is, no one knew when the peak was while watching the prices fluctuate live. Let’s suppose we missed our big payday (for now), but we still need to access the purchasing power of the money we invested into crypto. What options do we have? We can either sell, missing possible future profits of our crypto, or we can hold on and try to manage our liquidity problem some other way. But why would we hold if not because we expect the price to go back up? Well, because we do…we’re in it because we know it works, it’s just a matter of time enough people realize and join the ranks of crypto believers. But what if I told you there’s a third way, a way that leads to the best of both world? It’s called crypto collateral based fiat lending. It’s a pretty straight forward process that’s based on the concept of locking your crypto as collateral for a fiat loan. The loan has to be overcollateralized, so there’s no risk for the lenders, meaning you don’t need to wait for risk assessment and comply with credit score checks. If you don’t pay your loan back, the contract gets terminated, your collateral gets liquidated, the lender gets his money and everyone can go their own way.
But if you do, you can “buy back your crypto” at the price you locked it. I put “buy back” in quotes because the fascinating part is you you never really sold it, you just temporarily swapped it for fiat money, and you can swap it back at the same value. What this means in simple terms, is that if you need cash and expect let’s say BTC to go up in value, you take out a loan with your Bitcoin as collateral, you get the fiat, use it, and when Bitcoin is up by a margin high enough to cover for interest plus plenty for you to turn a profit (compared to if you had sold it at the time of loan contract formulation), you terminate the contract, pay back the lender, and keep the rest. Although just like your bank isn’t only about people depositing money and then withdrawing it, there are sophisticated underlying systems these platforms run on.

When would one use such services then? Good question, we have a number of examples on our website, but to stay in line with the topic of this article, I’ll show how it can relevant in education. Let’s say your son/daughter is going off to college, and you need to pay for tuition. Your money is tied up in crypto, so instead of selling it, you use it as collateral to take out the loan that’s needed, and get to keep the crypto at the same time to either keep for long term hodl or to liquidate when the exchange rate is more favorable.

Originally published at ico.inlock.io on August 30, 2018.

INLOCK is a blockchain and smart contract based platform to provide a new use case digital assets.