Topic: Btc/eth denominated mortgage or borrowing for miners in cryptocurrency? (Read 309 times)

Yes my point is why not talk to them about opening the possibility of such non pawnbroker/collateralized loans. I’m thinking this would be the best option. However pawnbroker loans with multi years terms and off chain use are more rare. In fact, I only found one.

Yes, but services that would require collateral worth at least 120% of the value you want to borrow.
So you deposit 100eth and they lend you 30k usd. But you need 100 eth in the first place! Ther are quite a few of them, some which brag about the companies backing them, like nexo or celsius, not that I would recommned any of it as I have never used them.


I had the impression you're a French citizen and you're trying to help your brother who is not, now that you've posted more details about your situation, well, this is beyond my current knowledge about lending, to be honest I see now way to solve this


It makes sense only if you're expecting your collateral to grow x10 in the future, so you don't want to sell it now at 11k but  10 years from now on when they are worth 100k a piece. Ironically, once cryptos become more used and as value stabilize and volayility goes away, this type of loans will become less and less attractive.

BitMex pointed out in an excellent article that the preferred use case would be Mining farms who earn in Bitcoin and currently borrow in fiat for purchasing their hardware.

My intent is to pay them in full as I would had been able to borrow in fiat. Though there is wide gap between how borrowing before fiat existed using gold (something I accept to do) and the existing system allowing main street of anywhere in the world to borrow at negative rate without justifying the purpose.

Yes, beside tax reasons in some states, this makes no sense. What I think is I should find a startup/fintech like blockfi offering multi years term loans for off chain use and discuss with them opening the opportunity for unbacked loan.


Correct, this is exactly what I want to do but using cryptocurrency. I’m thinking however the solution would come from from a pure online service/fintech or start up instead of going at the nearest branch of a bank.

I have always been against loans in any form, even a mortgage in cryptocurrency is not attractive to me. I am also confident that I will have to pay my debts in any case, even if the ownership of cryptocurrency funds is anonymous. the relevant financial structures have always had security services and they will act accordingly Even with the legalization of cryptocurrencies. Nobody will be able to use their secret means if they have large debts or even declare themselves bankrupt.

Well, right now they are doing this type of DeFi stuff but it makes no sense. You are paying 120 dollars in bitcoin and getting 80 dollars ethereum loan, so if you pay it back you pay it back and if you do not you lose money anyway. However let's say I do not have any money, or maybe just a bit of money, I want to buy a house and it worths 120 thousand dollars and I have 40 thousand dollars saved up, I need 80 thousand dollars to actually buy that house right?

In the banking world I go out and get the loan and buy the house and then pay loan instead of rent and that way I own a house. However at the end of the day bitcoin is not as legal just yet, when banks get into it with time, they will find a way to make sure they can seize your things if you do not pay your crypto loan.

But you stated you found some legit services offering such loans against collaterals!

First in such case, this is the company which borrows, not the owner whereas what I’m needing is for solving a familly problem and my lack of having tacking college seriously. Then, I’m don’t think borrowing in Cameroon or from a European bank while in the country is a good option.
Of course, I declare everything what I can convert to fiat. But for most of the remaining this is exchanging with chineese Ethereum address and obscure websites, which means no names, no address which completely prevents proper billing/invoicing. This is common in my field. Google vrp themsevelves didn’t let you access their invoice/bills for your work during a long time.
Not to add that what I’m doing is straight illegal in France with the only nuances the foreign companies I investigate accepts to not fill lawsuits locally.
My income in fiat terms is completely unstable. To the point of not earning anything during a full year is a likely event. Not good for borrowing.

And as I said, winning at the lottery is completely untaxed. But that’s only valid for individuals. Not companies.

In order to get 330,000€ on your personal French account (since I’m needing the money there) with a company in my field you need about 1,900,000€ of business revenue.

Tax wise, (as real estate is requiring white funds), a loan not in euros is definitely the best option.

Obviously no since otherwise I wouldn't have been criticized your idea that much in the first place, I would have simply told you to go to x and be done for it.
But!, I must also add that I'm not too familiar with these kinds of services so I at the same time I wouldn't be that amazed if indeed somebody offers them, but seeing nobody in this topic is pointing to one..


Assuming you're not going to find a service offering you this loan, have you considered setting yourself up as small business or self-employed?
You could at that point declare to the authorities all the income you get, you, of course, will have to some taxes but if I remember correctly under 20K euros a year you will avoid a lot of tax, you could simply claim your income as a form of mining and be done with it.
Banks will not inquire further into your activity nor will they ask for explanations who that is done as long as you have a license and your income is verified by the tax department.

For the rest of the debate, I think both of us have exhausted our repertoire, it makes no sense continuing.

I’m also somone who prefers to avoid paying interests if it can be avoided (except in some obvious circumstances as French banks don’t charge negative rates and where Livret A offers high saving yields compared to other countries).
Troubles in life is what will happen if I don’t pay. This is only one time. If you can safely repay (which is my case) then it’s a good option.

Wrong. cryptocurrencies varies a lot of more than fiat currencies. This isn’t a bond. With a fiat loan, you’re not in the long run. You need to pay every months and with the likely price of $110 per Ether in some weeks this means defaulting. And taking a loan in cryptocurrencies while being paid in fiat can be a good option if cryptocurrencies crash in the long run.

I’m not a proponenent of cryptocurrencies. They already offer solutions to real world problems like for international payments which is why I came to them with my money from Google with the Trump enforcing on social security numbers preventing me to open a proper bank account in the United States.
So yes, I’m someone who think the Bitcoin price can crash completely (Bitcoin down to the antipode ) as well as rise in the long run. However, I do see there is a large user base of Bitcoin or Ethereum saving accounts for lending ready to hold them untouched during years.

This is basically it. Taking out a mortgage usually means to have obligations for the next 20 years. When you being paid in Fiat but want to get a loan in crypto currencies, you are running a huge FX risk. Imagine the bitcoin price goes up 200% in the next 10 years. Your monthly loan payments would skyrocket. Sure it go the other way round, but do honestly expect the bitcoin price to drop in the long run? I would advise against such risks if you are not being paid in cryptos.
If your salary is in cryptos then of course you are in much better position if you take out a loan in FIAT and repay with cryptos, as prices are expected to rise in the long run.

The real problem is that when you take a loan, it’s important to borrow in the same currency you earn. Not to borrow in the currency of your country. The risk is that your income can decrease in real terms or that your debt increase in real terms. If you borrow in the same cucurrency and that your income decrease, your debt will do the same.

But I acheived something increadible. A stable income in Ether instead of acheiving it in fiat. So I what want to do is to borrow in the same currency or at a default choice in Bitcoin since it tends to vary in the same way than Ethereum.

I wouldn’t be calling breaking systematically the randomness of a lottery every day using a very high end machine and without any manual intervention a real job (though it can be done manually using several peoples). It’s more a stable income. Yet better than a job as it’s based on math whereas you can lose a job.

Correct, but as every critics of the fiat system deplore it as a burden, it’s how loans work most of the time in the real world, against the future. If cryptocurrency want to replace fiat, that type of lending needs to be created. Maybe it already exists.

I think the best idea is to find a legit service offering multi year terms loans for off chain use against a collateral and convince them to start what is a necessary milestone for cryptocurrencies much like it used to work with gold using a good plan.
This is why I’m interested in what you found (I’m meaning which services).

A foreign currency mortgage is terrifying enough, look at what happened to large amounts of Icelandic people with USD, EUR and CHF mortgages in 2008. A cryptocurrency mortgage would give you and the bank a bleed on the brain in a very short period of time. I'm sure it's possible someone will attempt it. I have no idea how they would make it work.

If I get you, you don’t want a loan that has to do with collateral, like where you will be required to place an asset before you’re giving a loan, you just want a loan that will be based on your job and will allow you to be paying certain amount every month or so? I don’t think you’re going to be finding such here in cryptocurrency space.

I have not taken loan in cryptocurrency, but I have done most of the crypto loan platforms and the way they function is the collateral way, where you will have to use your assets to get loans, and they have to do this because crypto is trustless and you don’t know who is who .

Until the day where you’d loose everything if you have to pay down something huge only one time and choose not to do it. I’m sure that you’d come to think otherwise in such case and be very gratefull to get a loan giving an additional delay after the deadline for finding the money.

Though it’s mainly paying for the way I did behave, this is not a choice. The consequences of not paying down are clearly worst than not doing it (which includes possibly the closing of my own French bank account whereas my income from Google is somewhat acting as a ban in other banks which means I would be out of options for receiving government subsidies and health insurance or paying the electricity bills).
I’m clean in every other fields for borrowing. The only problems are the unstable income in fiat terms and the use of cryptocurrency (which banks sees as gambling huge amounts whereas I always used it as an income and never spend euros buying them).


Remember this is not a bound. In 3 years half of the loan would had been payed back.
If the price drops, I won’t stay paying interest, I will pay back in full as soon as I can. And that won’t be leaving a penny. But it would mean nothing as a 5 year terms is not a recommended period for holding Bitcoin (too short).
And if the value of cryptocurrency rise so will my income in fiat terms (in which case it’s as if I would borrow fiat). This is only a bonus. And indeed their are many saving accounts offerring this kind service (though not for off chain purposes).
And this is definitely not fiat rates. In France, mortgage loans with a term below 10 years are legally capped at 1.79% APY where 1.79% includes the rate for the bank and the monthly fees for insurance.
The direct saving rates I’m seeing for Bitcoin is between 8% or 9% APY. Much like they where when the world was running on gold. I prefer paying those rates and borrow less than seeing the Ether price loosing 10% while waiting for a better offer.


Sorry this wasn’t my intent. I wanted to point that I found only one of such service. So do you know other services lending for off chain uses on a multi year terms?

That's not collateral if it were collateral it would be returned when you end your credit with them, it's and advances payment that first shows the bank you have some money and you're capable of savings and then it acts a buffer, if you, for example, take a mortgage on a 100k house, you pay 25k ina advance, the bank gives you the 75ks in credit but they have the house as collateral, so even if the value drops by 20% they would still be covered by it.



I had he feeling you're talking about the French lending system and although it might not advertise credit score every loan in the EU works on the same principle, somebody with an income of 2000 euros and a kid won't be able to access credits like someone with 10k and no family to support. It's still credit score but it's internal, unlike the one in the US. As for the business loans, trust me, me and my family have struggled with those for 10 years financing and refinancing them until now they're down to a negligible part of our revenue, but there are still criteria when you access them, based on your previous year revenue and profit and loses and amortization of intangibles assets and many more.
 

That is something else, they purchase something with their own money ready to lose but they could also make serious profits.
You're talking about people lending you money at fiat rates, and with the risks of not receiving a penny if the price drops.
So, why would somebody, in this case, give you a long and not directly buy crypto? The risks are the same but the revenue would be far greater!


Can you stop this? I have the feeling all this is turning into a shilling post for their service!

In cryptocurrency terms, my financial situation is definitely healthy. Though what you describe only works if you can pay later. It typically doesn’t work when the solution for not to pay is having the police involved.
In my case, interest corresponding to give a share of the contract. So the higher the rate, the less of the contract’s balance is available to borrow.

Banks ask you to pay a huge amount to access the mortgage (sometimes as high 25% of the total borrowed amount) as a collateral. I already have that amount (but not the full amount). And in every mortgage, the home offer the remaining collateral (though a part would go to pay planes tickets at possibly sky high prices for covid19 eviction route).

Maybe your country runs on credit scores. But we don’t have credit score here. banks requires a CDI. The preferred kind of work contract where firing should be done against a legal cause and where decreases in income needs to have a legal ground.
Though if they consider you earn enough (not the legal minimum wage) depending on the amount borrowed, borrowing is done against a stable income and thus the future.

The same thing apply to small business. When someone open a shop in downtown, he/she borrow not because it’s already selling in the shop, but in order to enable to get such income (in which case the eligibility would be made against roi probability).

You’re correct only peoples who’s lending is part of their business would loan such amount.
We’re graduation country. If you don’t have a degree for something you to do, nobody will trust you. Which of course includes banks. What you described would have worked if they were more than 10 months left, but currently, it’s rather game over.


Maybe not you, but there are many peoples who purchase cryptocurrency while expecting the value would have rose in 10 years. The income comes from a smart contract which don’t need the intervention of a third party. So I’m sure that in a little more than 5 years I would had received more than 980ETh. The problem is I need to pay things down sooner.
So for those in that case, it can provides a safe additional saving as I don’t have other debts and that such amounts are usually paid down in 15 to 30 years which makes my 5 years terms a good offer. Or even far quicker if the value collapse so much that the Eth price goes back to less than $10.


And about scams, that’s why I don’t want to discuss my finding in the fear that someone would do the same thing than me (though the price of a full controlling a parity full archival node over ipc is somewhat high). This also require disclosing personal in depth details about my financial situation and kyc.

Correct, it’s a loan against what you already have. Not a loan against the future. Many critics of the existing fiat system and their low rates who are a proponent of Bitcoin criticise the principle of debt as a burden on the future. In my case it would be a leverage where I own 27% of the total amount in fiat terms.
The aim is to have the same thing on cryptocurrencies much like it existed with gold.

I‘m also find to pay higher fixed rates to some extents (something like 7% wouldn’t be problem which is several times against the legal rate cap for such loans).

Though https://blockfi.com is the only legit service I found for off chain uses on multi years terms. If you know other services please let me know so I can discuss with them.