altcoin as collaterral does not make any sense explain why ppl dont use exchange

lottery248

legendary

Activity: 1582

Merit: 1006

beware of your keys.

alt coins as collateral are risky of value varies, even if it is a major one.
solid collateral is less risky on value matter, why people are still using alt coins as collateral?
even though alt coins is the best collateral, if the alt coin drops, loaners will get "shrekt".
bitcointalk account does not value a lot, as they can be counterfeited.
lenders should be more cautioned on taking altcoin collateral, as those alt coins have no value guarantee at all.

Quote from: jeffthebaker on August 09, 2015, 12:27:30 AM

From what other people have said before me, it appears that taking out loans and freezing altcoins is seen as a better investment than selling altcoins. Honestly though, I feel like a much better mindset for taking out a loan and using altcoins as a collateral is to alleviate the danger of the coins crashing in value. If you use a coin that can jump in value enough to use it as collateral rather than selling, it can also crash and burn. If you have an active loan while your altcoin dies, you can simply default on the loan and say goodbye to your altcoins, which are now worth much less than the loan.

explicitly, man.

jeffthebaker

legendary

Activity: 1526

Merit: 1034

From what other people have said before me, it appears that taking out loans and freezing altcoins is seen as a better investment than selling altcoins. Honestly though, I feel like a much better mindset for taking out a loan and using altcoins as a collateral is to alleviate the danger of the coins crashing in value. If you use a coin that can jump in value enough to use it as collateral rather than selling, it can also crash and burn. If you have an active loan while your altcoin dies, you can simply default on the loan and say goodbye to your altcoins, which are now worth much less than the loan.

jonald_fyookball

legendary

Activity: 1302

Merit: 1008

Core dev leaves me neg feedback #abuse #political

fact is most loans requests are invalid... we have a lending section to keep all the trash in one place away from the rest of the forum. most people who want to borrow fail... so very little actual lending goes on.

uknohowwedo

full member

Activity: 166

Merit: 100

id just rather use something more valuable then altcoins none of them have any stability

nydiacaskey01

legendary

Activity: 1834

Merit: 1036

Quote from: uknohowwedo on August 08, 2015, 03:05:09 AM

if ppl are trading their altcoins for btc loan why the hell not just sell the altcoin on exchange

the value of collateral is NOT the exact amount of your loan. some would accept your alt coins but expect that value is lower than current exchange rate. Example is if your alt coins are worth $100, the loan that will be given to you will be $70-$80 or sometimes lower because if the lender approved you loan request with the same amount of exchange rate then your right, borrower should have rather exchanged the alt coin than use it as collateral or borrower will not pay back since borrower received the current exchange rate of alt coins.

eternalgloom

legendary

Activity: 1792

Merit: 1283

People may want to hold on to their altcoins if they expect an increase in value soon.
I've seen a number of people offer altcoins as collateral, so they must have their reasons.

uknohowwedo

full member

Activity: 166

Merit: 100

Well that is too bad that there are that many people out there that would be willing to steal from each other

Jhanzo

hero member

Activity: 798

Merit: 506

Thank satoshi

Quote from: uknohowwedo on August 08, 2015, 03:19:36 AM

i just think showing people your bank statement or your true identity is the best method of collateral. These accounts here have way too much value on them. Accounts on bitcion sites across the maps have values of resale but they arent this much. Some scammer could just sit here for a year bide his time fake being legit just so hes got good rep and then hit people hard. its interesting how many scams ive already came across reading threads in here. very interesting how all the people in this community think

you should've seen how it was before people started asking for collateral. friggin' scammer paradise. just like btcjam where you only need to provide various personal documents.

uknohowwedo

full member

Activity: 166

Merit: 100

i just think showing people your bank statement or your true identity is the best method of collateral. These accounts here have way too much value on them. Accounts on bitcion sites across the maps have values of resale but they arent this much. Some scammer could just sit here for a year bide his time fake being legit just so hes got good rep and then hit people hard. its interesting how many scams ive already came across reading threads in here. very interesting how all the people in this community think

SwingFirst

hero member

Activity: 678

Merit: 1000

Quote from: uknohowwedo on August 08, 2015, 03:05:09 AM

if ppl are trading their altcoins for btc loan why the hell not just sell the altcoin on exchange

The value of the collateral is not always the same value as the loan, which is why the loan taker can not just sell his/her altcoins.

--Encrypted--

copper member

Activity: 924

Merit: 1007

hee-ho.

Quote from: uknohowwedo on August 08, 2015, 03:05:09 AM

if ppl are trading their altcoins for btc loan why the hell not just sell the altcoin on exchange

Quote

A common question is why don't I just sell my collateral? Well the reasoning behind collateral is that you think it's going to appreciate in price or do not want to sell it, encouraging you to pay back the loan to have your collateral returned.

taken from the sticky.

taking collateral is the most efficient way to protect the lender. especially on the internet where the person who borrows your money could be half a world away.

uknohowwedo

full member

Activity: 166

Merit: 100

if ppl are trading their altcoins for btc loan why the hell not just sell the altcoin on exchange

Topic: altcoin as collaterral does not make any sense explain why ppl dont use exchange (Read 579 times)