Topic: [EDU] The Rule of "No Collateral, No Loan" - IGNORE AT YOUR OWN RISK! - page 4. (Read 136736 times)

I have a perfect rating wkth over 100 trades on localbitcoins, as both seller and buyer.

Would this LBC account be valid as collateral?

- 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)

If you were to sell the altcoins then you will miss out on any potential price appreciation that would happen between when you take out the loan and when you repay the loan. You would also incur trading fees/costs both when you sell the altcoin and when you buy it back (and if your position is large enough you would incur some slippage in both directions).

Some people also like to borrow btc in order to buy even more altcoins (eg they are using leverage)

Hi Long time Not here busy busy

I have one point im alwasy confused about collateral loans especially with alt coins is the fact if u wanted borrow 1Btc and had enough alt coins to cover colatteral then wouldnt you just sell the coins on an exchange?

Just curious

Is there a reason why newbies aren't allowed on this sub forum. Halve of all topics here are closed because it are newbies asking for loan. Just made this sub forum available for Member+ or so. Would make this whole sub forum a lot nicer.

This Guy is a piece of work..... Who are you?  why do you determine what is and is not valid collateral?   I guess writing something makes you the authority!  half ass wanna be mod but is really nobody!

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 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.

I'm curious as to if I would want to take a loan, how would I know at what % rate I would need to set, along with how long in duration? What if I have multiple things I could give in collateral so I could increase the incentive to get a loan? I know I'm a junior member with no trust, but if say I wanted to purchase something that's pretty expensive, and need some time to pay it back, but have the collateral items to make the incentive worth it (mostly physical goods with some altcoins), what would I need to do?

I'm not saying I really want or need a loan right now, but I'm rather curious.. Because there are a couple things in the market place I would want to buy right now

Because it prevents people from being scammed, simply. It's the best measure that can be taken to avoid endless scamming and in all fairness it's only applied where a scam is extremely obvious - no sane person goes on an anonymous online person and asks for a 2 BTC loan with no collateral or anything.

Are you telling to encourage people without any trust who is very probable alt of established users to ask for loans in a place where users even scammed for as little as $1(maybe less)? Leaving negative trust is to prevent scam. You can see most accounts will be inactive after receiving negative trust which shows those accounts were made solely to ask loan(s).