Topic: Who Pays What? - page 9. (Read 36785 times)

Hmm.. I've been thinking about this quite a bit. A few tweaks I have in mind:

1) The ratio of "liquid reserves" only needs to match current accounts (ie accounts that can be withdrawn from at any time), and should be between 20-30%. The remainder should be in exclusively short-term assets.

2) For CDs (which have a more limited liquidity requirement), the more important metric is how well the asset maturities match the debt maturities. In other words, if a lender has 100BTC in 3 month CDs, they should have not more than 100BTC in loans/assets with 3 month maturities. Assuming they keep proper liquid reserves, it's less important whether the assets mature exactly when the CDs are due than whether liquid reserves are sufficient and kept replenished.

3) The amount of BTC the lender himself puts down (equity/deposits) should be counted separately, assuming the lender keeps a policy of insuring losses with their own money. This ratio should be ideally 100% or better.

4) Other security practices, like setting up dedicated receiving addresses with accounts and not allowing withdrawals to other addresses, should probably be added under the "non-financial" section. A significant fraction of major BTC losses are security related.

Hashking has reduced his 8 week deposit to  1.25%  weekly

Some weeks ago I looked at an enhancement to the credit ratings I do because the range of businesses did not fit within the lend/borrow model it was initially designed for.  I have made changes to the routine and will be collecting/updating information as it becomes available.

• Possible size breaks would be 100/500/1000/2500/5000/10000.
• Possible customer number levels could at 10 and double 10/20/40/80/160

I have also made a couple of other minor changes to break points to better reflect the range of issuer data.

+1

And, to herald the other change - when this kicked off it was based around a deposit taking/lending coin model.  Obviously people are doing other things with coins on deposit, so the bad-debt metric is going to get replaced with something more closely related to the stated use of the coins, including how transparently that is disclosed.

While working with RustyRyan today it became obvious that start-ups present an interesting issue: with no deposits or liabilities, they tend not to produce meaningful metrics.  Therefore, having a minimum size makes sense. 

This ties into some of the other size dimensions that are relevant here, and that is the size of the deposit-taking operation.  For example, you might be looking at a deposit, and someone with 100 coins from one person might have a different profile to someone with 100 deposits for the same value.  Similarly, someone with 5000 coins under management might be seen as having a more stable profile, maybe not. 

In any event, collecting data on the size of business (total and # of customers) is relevant for some people, just the same way bad-debts are not relevant for those that do not provide loans (and might artificially increase a rating). 

• Possible size breaks would be 100/500/1000/2500/5000/10000.
• Possible customer number levels could at 10 and double 10/20/40/80/160

This might change the ratings slightly, but the idea is posted for feed back from whichever side you're on.

I agree that ID requirements would be good, as would people providing additional information about their business models and supporting assets (credit ratings).  However, this is voluntary and I can not force anyone to do that.  However, if people make it clear to different deposit takers the level of disclosure they need, then that will improve this section.

In a similar vein, I am often asked for recommendations, but that is a bit more complicated.  Not sure what the general consensus is.

any comment on identification requirements patrick ?

Seeing as you are championing this thread, you would need to lead the call if you felt it would help secure lenders and borrowers.

Yes, I will update.  I see his revamped (rainbow) OP has his CDs listed again.

Also... fwiw, you should add kludge to deposit takers as he also takes deposits.

Hi Patrick,

Are these lenders supplying you with identification (drivers license? etc ) to obtain these high credit ratings.

I understand the reluctance of wanting to give a "stranger" on the net a scan of my drivers license but on the flip side there must be some exchange of details when we are dealing with tens of thousands of dollars.

I feel identification should be a highly weighted metric contributing to their final credit rating.

Without the supply of this identification they are just facelesss names on the net and i would suggest that people are capped at a A rating or lower without supplying this identification.

I imagine you personally wont have a problem with it as your easily identifiable even to the point of your place of work.
Can we supply these same conditions to other lenders ?

I think it would go along way to increasing the profitability of their business to the level you are currently enjoying as depositors would feel allot more comfortable investing their dollars.


just my 0.2 cents

Check the BDK threads.  Kluge had his GLBSE account plundered/screwed despite changing a password - an open session from a hack resulted in some fraudulent trades.

?

Kluge credit rating added.  AA

Despite the (insert bad word) things that occurred today, BDK and Kluge still obtains a very respectable rating.

Sorry, my mistake - re-fixed.  I have an off-line record that I use to generate the tables (otherwise they would look much worse) and didn't change it when I did the quick change last time.

^^ patrick, did you update it from an old copy? i'm fairly sure you had already adjusted my minimum to 5 BTC but now it shows as being back to 10 again.

OP updated.  Some additions, some shuffling.  Newly published credit rating metrics for Ineedausername to go with his insured deposits and uninsured PPT.

I'll try to get to this within the next month. Bigger fish to catch for the time being.

The basic mechanics are in: https://bitcointalksearch.org/topic/m.1015968
I've sent ten or twelve requests out to the people that take deposits and have received back two and know a couple of others are in process.  I have even invited Pirate to fill one out, but that was more for fun to see if he would (especially now he's commented in the Dank Bank thread).

There is potential for abuse of the credit rating system, and for people to simply lie.  That wouldn't be a very smart thing to do as that would get them a simple "Z" rating.  There are also a number of other people who will be looking pretty carefully at the information provided and will be able to highlight discrepancies.  As well, over the past year  I've read a lot and done a lot of business, including keeping tabs on the actions of various people as they come into the deposit taking space.

I have been asked to rate issues as well as issuers, and there are some other metrics that might be useful such as size/diversity, but those are harder to account for.  Also, this is very early days for ratings and I've had feedback from one person that it's going to take a few days to clean up their records - a positive step and if someone doesn't know their position, they probably shouldn't have a rating.  As contract, if someone knows their position, that's a positive (fundamental) aspect of ability to take and repay deposits.

Most importantly, I have a lot of information in my possession and know a lot of stuff that I simply can not and will not disclose.

As for Starfish BCB, I know the ratios and rules and I follow them just like anyone else, and in another seven days I have a 10 BTC bad debt roll off and that will affect the numerical score for that item.

+1