Topic: Loans in BTC - page 5. (Read 6535 times)
i did heard about BTC loan, and there is escrow for it. I guess there will be some sorta btc loan company exists when btc becomes reli popular
Loans for bitcoins wouldn't work very well, considering once something is sent, it is sent permanently. Unless bitcoin is accepted as a currency and regulated (which we don't want it regulated), then loans wouldn't really work out. At least without proper collateral.
Loans can work without collateral, but in order for BTC loans to be enforced, there must be fiat still in use that can be seized by the courts to pay the creditor in the event the borrower defaults on his loan. It is obviously not possible to seize a borrower's bitcoin assets without his private keys. 
Loans for bitcoins wouldn't work very well, considering once something is sent, it is sent permanently. Unless bitcoin is accepted as a currency and regulated (which we don't want it regulated), then loans wouldn't really work out. At least without proper collateral.
This is a really dumb question, but can someone answer me nicely? I've always wondered this: Whenever people come to ask a loan, they are usually desperate. And people answer with "You need collateral, like some altcoin such as litecoin". Now what I don't get is, if the person is THAT desperate for money, why doesn't he just trade his litecoin for bitcoin at an exchange? It's reallllly easy and pretty fast. I just don't get why people ask for a loan with altcoin collateral when they can just sell those coins?
Maybe I'm overlooking something.
Maybe I'm overlooking something.
Person A deposits 100 BTC. The bank A loans 90 BTC to person B.
Person B deposits 90 BTC. The bank B loans 81 BTC to person C.
Person C deposits 81 BTC. The bank C loans 72 BTC to person D.
Person D deposits 72 BTC. ...
Total apparent number of bitcoins in the system: 1000
Person B deposits 90 BTC. The bank B loans 81 BTC to person C.
Person C deposits 81 BTC. The bank C loans 72 BTC to person D.
Person D deposits 72 BTC. ...
Total apparent number of bitcoins in the system: 1000
still its risky..
There are already websites giving interest for bitcoin and lending back the bitcoins, thus, using a fractional lending system.
That will be very common. But it won't resolve all the serious economic problems created by the deflanionary nature of bitcoin, if it becomes a main currency.
That will be very common. But it won't resolve all the serious economic problems created by the deflanionary nature of bitcoin, if it becomes a main currency.
BTCjam.com has been doing loans in BTC for awhile where people can do peer to peer lending. I have never tried it before, and I was just reading how someone made off with a bunch of investor money...but that is always the risk of lending...
It's the same sort of system as it is here, except BTCjam has a lot of "trust profile" rankings. Like they verify your income, and things like that. Here, we base it off of account trust and collateral.
Loans on this forum are more like loans that use cash as collateral. There are very few if any lenders that will lend without collateral valued at 100%+ the amount of the loan. This provides people an disincentive to borrow as they could simply sell their collateral.
Lending in btc and taking loan in btc are too risky.
1) Mostly scammers take loan in btc with no intention of paying it back.
2) Legitimate loan takes on too much risk on the volatility on bitcoin.
1) Mostly scammers take loan in btc with no intention of paying it back.
2) Legitimate loan takes on too much risk on the volatility on bitcoin.
BTCjam.com has been doing loans in BTC for awhile where people can do peer to peer lending. I have never tried it before, and I was just reading how someone made off with a bunch of investor money...but that is always the risk of lending...
It's the same sort of system as it is here, except BTCjam has a lot of "trust profile" rankings. Like they verify your income, and things like that. Here, we base it off of account trust and collateral.
BTCjam.com has been doing loans in BTC for awhile where people can do peer to peer lending. I have never tried it before, and I was just reading how someone made off with a bunch of investor money...but that is always the risk of lending...
There's an entire subsection here about loans, you can see how well it works out there.
This. Collateral, trust rankings, timely payments, good interest rates. It's similar to how it works in real life. Loans are and will always be based on trust.
bitcoin is not the right currency for loans.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I also think that any loans in bitcoin are risky. btc is a non-reversible currency by nature. If someone does not want to return the loan, what are you going to do?
Take their collateral
Gold isn't particularly reversible either, but there was a time when all loans were denominated in gold.
WTF?
Because they want money but they don't want to give up their asset permanently, obviously? Because they want to buy something else? You know, the reason for any loan ever? Just with a limit equal to the borrowers total equity?
Moreover why would a person take A loan if he had money in his account to be reversed away in the case of non payment???
bitcoin is not the right currency for loans.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I also think that any loans in bitcoin are risky. btc is a non-reversible currency by nature. If someone does not want to return the loan, what are you going to do?
Take their collateral
Gold isn't particularly reversible either, but there was a time when all loans were denominated in gold.
bitcoin is not the right currency for loans.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I also think that any loans in bitcoin are risky. btc is a non-reversible currency by nature. If someone does not want to return the loan, what are you going to do?
Take their collateral
Gold isn't particularly reversible either, but there was a time when all loans were denominated in gold.
bitcoin is not the right currency for loans.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I don't know if another alt currency would work or not, but any bitcoin loans would have to take place outside the blockchain and be done by contract.
I don't want BTC to replace fiat anyway, but rather compliment it.
I also think that any loans in bitcoin are risky. btc is a non-reversible currency by nature. If someone does not want to return the loan, what are you going to do?
There is no reason why fractional reserve banking could not be done with bitcoins. After all, it existed when the U.S. was on the Gold Standard.
It can't be done with bitcoin, because you cannot produce more bitcoins like you can dollar bills...And when the banks have to fufill the loan, they will have to send actual bitcoins to fund the loan....Person A deposits 100 BTC. The bank A loans 90 BTC to person B.
Person B deposits 90 BTC. The bank B loans 81 BTC to person C.
Person C deposits 81 BTC. The bank C loans 72 BTC to person D.
Person D deposits 72 BTC. ...
Total apparent number of bitcoins in the system: 1000
That's classic fractional reserve banking and it works with dollars, bitcoins, gold, or seashells.
I think he's saying that the "apparent" number of BTC isn't the same as the "real" number of BTC because BTC isn't a claimcheck on something unprintable, but is itself unprintable. I.e, the fractional reserve isn't built into the currency itself. Sure, I can deposit 100 BTC and the bank loan 90 BTC of it out, but I can't spend that 100 BTC unless the 90 BTC is repaid, or unless someone else deposited another 90 BTC and I requested my withdraw before the bank could lend it out.
Actually it isn't, at least not in the US System. Recall that the USD is backed by the "full faith and credit of the US Government."
Now visit this link:
http://fdic.gov/deposit/deposits/brochures/deposit_insurance_at_a_glance-english.html
"Deposits at ... insured banks ... [are] backed by the full faith and credit of the United States government."
In other words, deposits and the currency itself are backed by the same entity in the exact same manner, making them equivalent. Now I guess theoretically deposits greater than $250k or $500k in a single financial institution wouldn't have this quality, but to be honest, not many people have that much in a single account, people with that much money tend to have multiple accounts, and even if they did, the USG basically has set a precedent of never letting commercial banks fail for any reason, so the limit may as well not be there. They keep on increasing it anyway, the moment there's any sign of a bank coming close to failing.
There's an entire subsection here about loans, you can see how well it works out there.
There is no reason why fractional reserve banking could not be done with bitcoins. After all, it existed when the U.S. was on the Gold Standard.
It can't be done with bitcoin, because you cannot produce more bitcoins like you can dollar bills...And when the banks have to fufill the loan, they will have to send actual bitcoins to fund the loan....Person A deposits 100 BTC. The bank A loans 90 BTC to person B.
Person B deposits 90 BTC. The bank B loans 81 BTC to person C.
Person C deposits 81 BTC. The bank C loans 72 BTC to person D.
Person D deposits 72 BTC. ...
Total apparent number of bitcoins in the system: 1000
That's classic fractional reserve banking and it works with dollars, bitcoins, gold, or seashells.
I think he's saying that the "apparent" number of BTC isn't the same as the "real" number of BTC because BTC isn't a claimcheck on something unprintable, but is itself unprintable. I.e, the fractional reserve isn't built into the currency itself. Sure, I can deposit 100 BTC and the bank loan 90 BTC of it out, but I can't spend that 100 BTC unless the 90 BTC is repaid, or unless someone else deposited another 90 BTC and I requested my withdraw before the bank could lend it out.
Thank you for all of the replies.
I agree with a lot of the sentiment that it would be great to not have loans, but I don't see how we could have a functioning society that is actually growing without some system similar to this.
The alternative in my opinion is complete shift in perception of society, and that isn't going to happen in our lifetimes.
I don't have a solution for this, but it was nice seeing others thoughts on this, which only confirms that there are a lot of unknown variables that still have to run their course.
I do love that this technology is actually bringing positive and constructive thought toward a better future.
I agree with a lot of the sentiment that it would be great to not have loans, but I don't see how we could have a functioning society that is actually growing without some system similar to this.
The alternative in my opinion is complete shift in perception of society, and that isn't going to happen in our lifetimes.
I don't have a solution for this, but it was nice seeing others thoughts on this, which only confirms that there are a lot of unknown variables that still have to run their course.
I do love that this technology is actually bringing positive and constructive thought toward a better future.
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