Topic: [FULFILLED!] 10,000 BTC loan - LONG TERM - page 3. (Read 7520 times)

Have you considered trying to arrange some long-term OTC call options with MPOE or other willing option writer?

The most effective hedge comes from my mining farm. 

Beyond that, I am going to be using some bitcoinica contracts to guard against huge moves upward.  More of a shock absorber than anything. 

Proff of ID, proof of address, letter from my firm confirming the equity sale, and a legal promissory note. 

No accountant. 

Thanks for the well wishes!

For the time being, the member asked I refrain from disclosing his username.  I will leave it to their decision should they want to come forward and comment on the thread. 

I am in the process of converting the coins in several venues, and will do it in phases.  Should have very little impact. 

Congrats! This is awesome! Did you figure out some ways to hedge it?

And as a joke: if you are going to dump 10k on the open market please PM in advance so we can move in and by a lot of coins shortly after 

Anyway cool that this loan is fulfilled and I'm also quite curious who took it. Can you elaborate on precautions were taken?

Is the promissory note a legal contract?
Was an accountant involved?

Also good luck on the equity investment.

Congratulations! Does the lender want to remain anonymous? There aren't that many people around here that can handle loans that big.

Also, do you plan to sell the coins on MtGox or arrange a private sale without moving the market? When trading large amounts, I typically try to find someone in #bitcoin-otc, first because it can potentially be slippage-free, but also because it's just a more subtle way of doing things (and I love to be subtle). Since I'm overall long bitcoins, I'd prefer not to do much to lower the MtGox price where possible

Wow, congrats! This is huge indeed.

I have an update for those interested in this loan:


I have completed negotiations with a long-time forum member, and have executed a promissory note as of this morning.  He fulfilled the loan for the entire amount, and at the terms I desired at the outset of the post.  I am grateful to him for taking down the whole loan, thus saving me from having to seek out dozens of smaller lenders. 

I am really excited about getting the loan done, as it is the first I am aware of that encompasses such a large amount of BTC, a reasonable interest rate, and the proceeds being used for aquiring existing business interests.  I think the implications are profound for bitcoin. 

Yet another step forward for bitcoin! 

Thanks for the feedback.....very well written, and excellent points! 

I'd interpret DeathAndTaxes's comments as being about a bank's legal and collections infrastructure rather than about what information they get. A big bank has entire teams whose job is to get money back from defaulters, and has existing relationships with collections agencies and lots of experience doing all that. My general attitude with loans in bitcoins is that for most smallish loans I don't even bother asking for identity: if your online reputation makes me believe that you're fairly unlikely to run with my money, then you'll get the loan; if I'm unsure enough that I'd want identity verification, I just won't offer the loan at all, simply because it's not worth my time to chase down people who default on small amounts of money.

With the quantities of money you're asking for, on the other hand, I (or other lenders) would obviously need to ask for identification. But if it ever came to collection/legal action (which seems unlikely, given your reputation), we'd have to spend a lot of time/money getting lawyers involved (for a nearly unprecedented legal action, suing someone for virtual goods!) and/or selling debt at a loss to a collections agency. I think that more than justifies an increased rate over a bank.

Anyway, that's all I wanted to add I wish you luck in getting the money and earning a lot more on top of it.

tl;dr: economies of scale on collections infrastructure allow for lower interest rates

Could happen!  Gonna be interesting. 

2-3 years ago 10,000BTC bought a pizza, 2-3 years from now it will buy a house, and 2-3 years after that people will wonder why anyone ever loaned millions of USD on a forum.

Thanks Slider!  Much appreciated!

Man, did you read the whole thread?

I am willing to provide extensive details to interested/qualified lenders.  I am simply not going to throw all of my personal/business details in the OP and hope it works.  The thread is designed to spur interest from lenders, elicit feedback, and lead to discussions privately where details will be worked out.  

I am not asking anyone to loan BTC to me anonymously and just hope for repayment....where in the world did you get that impression?  

I just want to add that I've had dealings with yochdog (investing in his mining operation) and he was very professional and everything went smooth, so +1 to his rep.

Hey Vampire,

It seems that there is a very healthy split on where BTC prices are headed, so this is just one more way for the differing factions to place their bets.  

Where is the money going?  It will be used to purchase additional equity in the financial firm I work for, the cash flow from which will be used to pay back the loan.  I also have the 23 GH/s mining operation that produces sizeable BTC.  

I can secure the loan with physical property, the details of which would be worked out between myself and the lenders.  I am thinking it could be my brokerage account, the title to my brand new truck, or even the GPU's that power the 23 GH/s.  

I would provide a credit report to properly vetter lenders.  

Thanks!  

If you can get 5.5% from your bank then you should however part of the reason you can get 5.5% from your bank is
a) proof of identity
b) proof of assets
c) proof of credit

Maybe 10% is viable, hell maybe even 7% is viable.

Still 10% on an anonymous no information provided just hope for the best loan vs 5.5% bank has a signed contract, legal rights, and verified debtor isn't exactly apples to apples.

The question is how much information are you willing to provide to reduce the risk to creditors and thus the risk premium in the interest rate?  If it is nothing then 10% is a joke.  Just because it is double your banks rate isn't really relevant.  2x the return on a 100x the risk isn't good business.

I saw your thread, Matthew, and that was actually what spurred me to do this.  I think 2-3 years from now, we will look back on the "huge" loans that are being attempted today, and think "how quaint!".  The pace of change and maturing nature of the bitcoin economy is pretty awesome. 

Hi Patrick,

I knew the interest rate was going to be a tough sell, but I am hoping that lenders will balance the relatively low rate against the sheer coolness of extending the Bitcoin economy into realworld finance.  Like I told Znort....at the end of the day I still have to make a spread on this deal, and 10% is pushing where I can do that comfortably.  As most of us know, interest rates in the traditional finance world are much, much lower than what we see on the forums.....trying to bridge that gap is going to be a challenge, but I am hoping this can be the first deal to do so!