How are altcoins collateral - page 3.

Quickseller

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Quote from: XinXan on March 01, 2015, 11:16:59 AM

Quote from: Quickseller on March 01, 2015, 11:15:26 AM

Quote from: XinXan on February 27, 2015, 03:40:52 PM

Quote from: DeathAndTaxes on February 27, 2015, 03:39:16 PM

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

If they sell the collateral they are offering then they will have to pay exchange fees, and would miss out on any additional price appreciation between the time they take out the loan and the time they get the money to repay the loan.

A lot of loans secured by alt coins are likely done for altcoin trading so the loans essentially are allowing for additional leverage

But when you pay the loan back you have to pay it with interests bigger than the fees you would pay for exchanging the altcoins

The interest will probably be more then the exchange fees however the interest would not be more then what the borrower *hopes* the exchange rate will have increased since they got the loan.

XinXan

hero member

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Quote from: Quickseller on March 01, 2015, 11:15:26 AM

Quote from: XinXan on February 27, 2015, 03:40:52 PM

Quote from: DeathAndTaxes on February 27, 2015, 03:39:16 PM

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

If they sell the collateral they are offering then they will have to pay exchange fees, and would miss out on any additional price appreciation between the time they take out the loan and the time they get the money to repay the loan.

A lot of loans secured by alt coins are likely done for altcoin trading so the loans essentially are allowing for additional leverage

But when you pay the loan back you have to pay it with interests bigger than the fees you would pay for exchanging the altcoins

Quickseller

copper member

Activity: 2996

Merit: 2374

Quote from: XinXan on February 27, 2015, 03:40:52 PM

Quote from: DeathAndTaxes on February 27, 2015, 03:39:16 PM

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

If they sell the collateral they are offering then they will have to pay exchange fees, and would miss out on any additional price appreciation between the time they take out the loan and the time they get the money to repay the loan.

A lot of loans secured by alt coins are likely done for altcoin trading so the loans essentially are allowing for additional leverage

Amph

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Quote from: XinXan on February 27, 2015, 03:40:52 PM

Quote from: DeathAndTaxes on February 27, 2015, 03:39:16 PM

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

some of them are just scammer, other want to have more choice

XinXan

hero member

Activity: 1064

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Quote from: havecoch on March 01, 2015, 04:30:34 AM

Quote from: XinXan on February 27, 2015, 03:36:55 PM

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Its because people believe in the altcoins,and want to hold it, incase they think a price increase will happen.

That can happen with bitcoins aswell plus people only want "stable" altcoins like dogecoin or litecoin

havecoch

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Quote from: XinXan on February 27, 2015, 03:36:55 PM

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Its because people believe in the altcoins,and want to hold it, incase they think a price increase will happen.

fildza

sr. member

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Merit: 250

Ask me anything if you have any problem

The value of altcoin change every minutes but when you use it as collateral, you still get the same

CrackedLogic

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Quote from: Bardman on February 28, 2015, 03:51:13 AM

Quote from: CrackedLogic on February 28, 2015, 01:14:03 AM

Quote from: XinXan on February 27, 2015, 03:36:55 PM

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Some people like to keep the coin. That's like saying if you're using your house as collateral, why not just sell it and buy bitcoins with it.

You cant compare your house to some altcoins. First of all selling altcoins is the easiest thing and also fast, selling your house is not. For me collateral should be something that you can sell somewhat fast and safe but altcoins as a collateral is like having 70k dollars and asking for a 50k euro loan using 70k dollars as a collateral, makes no sense.

They're still both assets. Say you asked for a asked for a 500k loan. You'd offer the deed of your house for collateral.

Bardman

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Quote from: CrackedLogic on February 28, 2015, 01:14:03 AM

Quote from: XinXan on February 27, 2015, 03:36:55 PM

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Some people like to keep the coin. That's like saying if you're using your house as collateral, why not just sell it and buy bitcoins with it.

You cant compare your house to some altcoins. First of all selling altcoins is the easiest thing and also fast, selling your house is not. For me collateral should be something that you can sell somewhat fast and safe but altcoins as a collateral is like having 70k dollars and asking for a 50k euro loan using 70k dollars as a collateral, makes no sense.

CrackedLogic

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Quote from: XinXan on February 27, 2015, 03:36:55 PM

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Some people like to keep the coin. That's like saying if you're using your house as collateral, why not just sell it and buy bitcoins with it.

XinXan

hero member

Activity: 1064

Merit: 505

Quote from: DeathAndTaxes on February 27, 2015, 03:39:16 PM

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

DeathAndTaxes

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Gerald Davis

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

XinXan

hero member

Activity: 1064

Merit: 505

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

Topic: How are altcoins collateral - page 3. (Read 5292 times)