Topic: [EDU] The Rule of "No Collateral, No Loan" - IGNORE AT YOUR OWN RISK! - page 2. (Read 120699 times)

the approach https://lendoit.com/ is taking looks legit.


no collaterals, default market, interest auction...

- The best collateral is another crypto-currency, such as Ethereum (also written as ETH).  Coins must be moderately traded on multiple exchanges.

What is not considered collateral?
- Merit.  Bitcointalk Merit is not a commodity and is not meant to be traded.  Asking or doing so may get you negative trust (Trade with Extreme Caution!)
- Most pre-coins/tokens are worthless, or may take significant time to be worth anything.  

When should you use Escrow?
 - Use only "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.

When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.  The new "Merit" system highlights thoughtful or useful posts, but gives no indication of trustworthiness.

Are other cryptos ever really that hard to trade into BTC that they would need to be used as collateral to get BTC, I never quite understood this?

Can i use my account of paypal or payoneer as collateral? Sorry about the noob question.

What is considered collateral?

Collateral is something that can easily be resold to cover the loan value plus interest should the loaner default on the loan.

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).  Coins must be moderately traded on multiple exchanges.
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.  Try localbitcoins.com

What is not considered collateral?

- Items they want to sell.  They don't want it back, so they will default.  It's scammy unethical behavior and will lead to negative trust.  Check their recent posts!
- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  You can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Games codes or similar.  To verify the collateral you need to use the code, which destroys the collateral.  Consider this a purchase, not a loan.  (Post in Digital Goods instead)
- Most new alt-coins or alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come over 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)  Examples:  Steam
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear. (Collateral Scam)
 - Use only "Hero Members" or "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
- A list of trusted escrows can be found here:  https://bitcointalksearch.org/topic/bitcointalk-escrows-trade-safely-855778
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

As in 2013, it seems the trend has continued - a massive influx of users, both new and old, has continued to hit the Lending section with more and more loans being asked for daily. Due to scams a "rule" has been created which, while not currently "enforced", is basically a minimum requirement to get a loan. Note that this isn't an official forum rule, it's just a rule that most lenders will follow.

The rule of "No Collateral, No Loan" means that in order to get a loan you must give collateral that is equal, or preferably higher to the amount you are being loaned.

If you completely ignore this sticky and make a loan request with no collateral, without having massive trust on the forum, the chances of you getting negative trusted feedback and therefore having a Trade with Extreme Caution tag is almost 100%.

In general the amount lenders will be looking for is collateral equal to 110%-120% of the amount you are being loaned. Why is this? Well, first, they want to discourage you from running off with the funds. Collateral also needs to be something that can easily be sold, which brings me to my second point - your $500 worth of ink isn't going to cut it as collateral. Normally lenders will want things such as Altcoins or precious metals, although things that can be sent electronically are preferred.

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.

However, you must also watch out for collateral scammers. These guys take your collateral and run, without sending you the loan. Avoid this by using escrow.

This applies to lenders too - for your own sake, please follow this rule, both for your wallet and to discourage scammers from coming here.

The below post is also part of this [EDU].

Why Giftcards Cant Considered As zcollaterall
And How To Spot Items That They Want To Sale?