It sadly is not look up the site BTCJam. People loan money to others and a big part is identity, I don't visit it often as... I think it's a good way to loose money. But the more info you add the higher score you have (in part). You can see a entire site built on it.
But I think less and less use it as if someone defaults you get all the persons info... but in many cases that does not mean you get the investment back. So yes there is a real example of it above... why people loan on it is greed. They see high interest percent... but I personally don't touch it as a investment.
Banks and credit institutions loan based on identity + income verification.
However in bitcoin, the problem is not the identity, it's the enforcement of the loan if it goes bad.
Plus I personally believe a non collateral loan is very immoral.
What will loan collectors do, break into the borrowers house and confiscate wealth equal the debt amount? That sound too immoral and violent.
Better just stick to collateral loans. Otherwise we might end up with debt slavery.
And I don't disagree on this I would never loan based on identity, but some do. I will never understand it and agree if default there is a huge problem. This is why I urge people to stay away from sites like BTCJam or other BTC loan sites based on idenitnt and number of paid back loans.
If person defaults and all you have is their info... you don't have much to get back. And some are not enough capital to make a legal case over, and some are international making much harder. So again person who defaults can possibly never pay back and just have a bad online name.
So I agree don't loan based on identity. Also I would add I would not loan based on accounts I see this happen but if account is hacked or stolen.... you lose money. So at end of day be careful with loans.
