Topic: Would you dare to pawn your bitcoin? (Read 509 times)

It depends if the pawnshop accepts the use of bitcoin because some of the countries does not support or even implement the adaptation of the Bitcoin itself, if that so they still support I can use my bitcoin for deposit but in that case scenario for emergency only imagine you sell your bitcoin for a smaller price and we know how does the market volatility of the bitcoin works at the end of the day for me its a lose case scneratio for the long term goal.


If the price of the bitcoin will goes in an uptrend market and you make a collateral with your bitcoin lose at your end that selling partial of the bitcoin so the profit cames from the price movement can be use as payment.

that is true, there's no need to pawn your btc. just sell it and buy when you have the funds. why make your life so complicated with these things. this is why i don't like many crypto lending apps, they will ask for collateral and then you still need to pay for the interest. so why not sell directly your crypto? think of the trouble that you're going into if you will use these lending apps.  at least, you don't owe anyone as you are using your own funds.

Not yet known. I suppose that everything will depend on the agreements / contract between the pawnshop and the client. Most likely, such conditions will be approximately the same in all pawnshops. So to speak, will become standard.

If this is prohibited in the contract, then it is unlikely that the pawnshop will be able to do this. But probably, the pawnshop will not prescribe this in the conditions in order to leave additional opportunities for themselves.

Of course, no one. Pawnshops have always acted in their own interests, and the case of cryptocurrencies is no exception. But if there is a demand (in the specified article), then for their customers this is also necessary or, at least, is a necessity.

Did KYC push the user away from using exchangers? I'm sure pawnshops will find their customers even with KYC.

What if it's not enough?
In general, I have no idea who might be interested in this, but I proceed from the information from the article, which means that someone still needs it.

I don't know the answer, because I'm probably not a pawnshop customer.

I am not entirely sure if even pawnshops accept bitcoin to be fair. It's like going to a pawnshop and giving 100 dollars and asking 50 dollars back in exchange and hoping that you would do better in the future. If you are willing to part ways with your bitcoin then smart thing to do would be selling it, there is literally no difference in that at all.

People pawn their items because items are not currency, it's not easy to move it around, it's not easy to sell them, you can't really sell your items that easily, it would be quite tough. So, what could you do? You would be able to actually make a big deal out of it by just pawning your items and getting them back with hopes that it won't be sold until you get back, but currency could be used everywhere anyway and bitcoin is a currency.

I don't think anyone would do something like that to pawn Bitcoin in a pawnshop, if you are the type of person who believes that Bitcoin will be worth 100k$ each, it would be a stupid thing to do to pawn it in reality.

Maybe someone will make a Bitcoin mortgage at the pawnshop and if the pawnshop agrees, this person probably does not have enough deep knowledge about Bitcoin, this is the only reason I can see.

exactly !! i have extra motor and a small lot that I can sell or pawn if time comes of emergency and I believe that is enough to cover what I needed and my family than Pawning my precious coin that I have been struggling to accumulate for how many years now and only others will benefits?
specially now that we are nearing bull years?

Makes sense, and also to prevent things that are not desirable. And if we really like our old bitcoins with minimal hurdles I don't think we need to pawn them or store them on any platform just to get something, and there are lots of other ways to cover what we really need even for emergencies.
I believe everyone has valuable items such as houses, cars or other expensive items that I think makes more sense to pawn to get what one wants. And if you have a lot of bitcoins, you can also sell some bitcoins according to your needs and this will be safer because you don't have to think about installment fees. And you can also buy back bitcoins when you have a lot of money, it's that simple.

I dare to do it, but it seems like it is similar to crypto-mortgage in terms of defi or cex environment in the crypto market, actually I have not seen anyone outside of life mortgage assets Regarding crypto, there are many reasons as to the safety of these deals they can really assure us, at what level of credibility they are.
Even as I remember in this environment Defi has also witnessed many different hacks and the damage is also very large, but this is also a way for us to improve it more secure, because the mortgage of my property thinking is a great thing that helps us take advantage of more opportunities.

Instead of using bitcoin as collateral when taking out a loan, I would probably choose the second option, which is to sell them within my required budget. Price volatility is a problem and this will certainly affect the agreement between the pawnshop and the collateral owner, and to avoid problems I tend to choose another option.

I don't really see the point of your question, but it might be different because deposito and collateral are completely different.

So is it different from giving someone your coins as a deposit? I found it similar to holding it on some exchange so for me I would never trust these pawnshops for these matters.Apart from it when you are physically dealing with someone regarding these cryptos it includes risk factors also as what if they tell someone about it who can do something to take access for it so for me it doesn't work a lot.

Doesn't work like that!
First, nobody is going to wait for 100% liquidation, most of them will do it at 110% to avoid a flash crash making them go in red.

Second, you've made a mistake, there is no profit.
You sent to those guys things worth $10k, you got $6000, so you've lost $4000. It doesn't matter what the price was going to be fast forward in time, at the moment when you took the loan you deposited coins worth 10k and you ended up with a loan of 6k, so, it's a 4k loss, not a 2k profit.
You could have simply sold those and you wouldn't have any problem.


Or, or...outrageous idea  take a loan from a bank!

Your concerns about leaving Bitcoins in the hands of platforms, even pawn shops, resonate with many. Yet, recall how pawn shops were once eyed with suspicion before their acceptance. The promise of blockchain extends beyond a value holder or exchange medium. It's the foundation of a fresh fiscal order where power is distributed, providing everyone an equal shot. Thus, employing pawn shops for Bitcoin could bridge the traditional and crypto finance gap.

Despite skepticism, Bitcoin's global ascension continues to break barriers and set standards. Your nation might not be on board yet, but blockchain's influence is universal. Stay positive, stay intrigued – the future holds boundless possibilities.

I really wouldn't trust any platform to store my bitcoins. even if it's a pawn shop. Because it's a bit like storing bitcoins on a centralized Exchange. But for someone who has certain interests will probably do it. but I personally prefer to avoid it. And in my country there is no such thing. at least that I know. but I don't know if it already exists and I missed it.
But if in my country things like pawning Bitcoin start to open. then maybe there will be a number of people who pawn their bitcoins. and I think the person who did this must be in a desperate situation.

Same here.

If I needed money I would prefer to sell things, but even in the hypothetical situation where I only had the possibility to pawn, I would pawn anything rather than bitcoin. There is an essential difference. You can't easily take a house with you on a plane thousands of miles away, or send it to someone easily. With bitcoin you can, and that's why I think it's essential to keep the keys.

Actually I do have always a cash reserve but instances happens and sometimes we cannot prevent from needing more than how much we have in reserve so yes this is why this post exist .

But like what I've said above , now I will consider what Dave says and yes never that I will pawn my precious bitcoin , I would rather borrow from all sorts that letting others have control and hold my Bitcoin.

I remember those threads that using their Bitcoin as collateral and in the end , they regret that action and I don't wanna be one , I will keep hold my coins no matter what Happen , I would rather pawn my house or car than pawning my Coin .
in this I may turn things differently in the future even if this took me a while finding best result .

We must always control our coins, this is a very important point. To prevent such a situation from having to think about it, you should always have a cash reserve. Unforeseen situations can happen, no one is safe from this, but you can create a reserve, so that it is always available to you, this will help solve almost any situation, without having to mortgage or sell part of your investment.

It depends. If conditions force me to pawn Bitcoin, I might pawn it, but of course, as DaveF said above, this agreement should be clear and should not be detrimental to both parties. Starting from the price of Bitcoin, where it is stored, the time of borrowing, interest, etc., it should be clear in the agreement, don't harm the borrower.
Because it is possible that the pawnshop has evil intentions and takes away all the Bitcoins that are pawned for their own interests and in my opinion this is the importance of a third party which will guarantee that all the Bitcoins that have been pawned are stored safely and cannot be withdrawn by the pawnshop or the customer before the contract expires.

No since you are the one lose in this set up since we don't know if there's more problem to come and we can't pay our pawned bitcoins. Also for sure we would hand it on much lower value than the current rate so its bad decision for us to do that since the only one who win on this set up is the one who take your bitcoins.

But if you really need since its emergency and you are 100% sure that you can pay then maybe do it but don't faster because we don't know what would came out to the mind of the lender if bitcoin price suddenly pump up.

Why not, at least the settling rules are more detailed about sharing profits or losses based on example scenarios like the 2nd comment. In turn, volatile collateral will burden one of the parties, the agreement on paper must be written in such a way.

Not yet

This isn't new to the service sector, but I've never heard of an incorporated pawnshop adopting this.

I am thinking of some mortgage loans in this market and it is quite similar to the problem OP mentioned, as I have also mortgaged crypto assets for a loan so I think I am completely ready to do this. many times. In the case where the lender is safe enough to mortgage their own assets, as I remember before from mortgaging some altcoins on binance to borrow usdt, I don't see much of a risk here because of what inherently what What I'm looking forward to is what they're dealing with. Actually, if I don't want to say that this form is too popular and there are different fields related to it, but the name that stands out in the environment defi makerdao, aave, compound,... all have taken forms this is very popular.
As for the local forms I know there are also, but I wouldn't want to use them as convenience here is what I know in this market so I don't intend to have to look for more. a new way out of life where trust isn't great enough.

This is stupid because we have an exchange already for trading, but using Bitcoin as collateral? Something that fluctuates a lot? It's better to come into an agreement with the pawn store owner base on the price action between the payback period or else it's going to be a bad idea.

This is just me though, some might make more sense out of the idea but I don't see how, you could get burnt easily if you use Bitcoin or any volatile assets like crypto currency as collateral.

worth reading mate thanks , I thought at first that it can be manage to pawn but after you read this ? yeah I will consider all your points because there are so many things we need to be bother because of our precious coins.
and also what if the business turns scam once there is coming super bullrun?
what if after pawning the price climbs up to 1 million( I know it is exaggerated but possibilities are always there)
maybe I will rather borrow money from my family members and friends just to keep my Bitcoin in my hands.

I don't mind the pawnshops accepting crypto as a collateral, but what happens if the crypto prices drop severely?
Will the pawnshop sell the crypto and liquidate the loan when the borrower doesn't want this to happen? I think that the answer is yes.
Who can guarantee that the pawnshop owners won't find a way to scam their customers?
Also the KYC procedure would make this service undesirable for most borrowers.
The most important question is, why would anyone want to get a loan from a pawnshop when he(or she) has enough crypto?
Why not just sell the crypto for fiat?

If you are in a situation where you have to leave a deposit as an emergency option and you have no other collateral, then I will do it. I will just make sure that it is a short-term arrangement, because I do not want to miss out on any price spikes. 

I will not do this under any other circumstances, because my Bitcoin must be under my control and available 24/7. Also, if you transfer your coins to another wallet and a fork is done... then you will lose out on any free coins from the new fork. 

From where I stand, pawnshops taking crypto as collateral is a leap forward, etching tangible acknowledgment to the worth of this digital asset. It's an open secret that cryptos, mainly Bitcoin, have shown a knack for steep value climb, sometimes even leapfrogging gold.

The rollout isn't going to be smooth sailing, though. We need airtight laws to supervise this shift, ensuring consumer safety. If Russia's Central Bank greenlights it, it'll likely set the stage for others.

Where I reside, this service is yet to launch, but I see it as a future inevitability. KYC checks might rub some the wrong way, but they're indispensable for nipping scams in the bud and maintaining a clear picture. As a crypto enthusiast, Im rooting for such future-facing leaps in merging crypto with traditional systems.

The lending section is littered with users who are using their alts as guarantee and more often than not using bitcoin as their payout (or visa-versa - not sure would have to look that one up)

Effectively they are treating the lending section as a poor-man's pawn shop.

It's going to be an option, of course. If a time comes when I really needed money and I'm left with no choice but to dip into my Bitcoin stash, I'd probably be looking into it. It would either be selling or using it as collateral for a loan or pawning it. I'd be choosing whichever is best in my circumstances. 

I'm not sure if pawnshops here in my country are legally allowed to accept Bitcoin as a guarantee, but I suppose it's already happening as far as individual private deals are concerned. Also, Bitcoin largely remains a thing to be studied.

Online, however, it's a lot easier for anybody to use Bitcoin as a form of collateral. It's not much different from pawning it.

That's my point mate, most likely it might be the last thing to do, if you are really in dire needs then why not just sell it though instead of pawning right?

If we take the case of Russia right now, if you are just a ordinary individual and might be suffering from the effects of war, then sell your BTC to survived. I don't think that Bitcoin is designed to be pawned, it's not a physical objects and I don't think that Satoshi did even think about that when he created it. Transactions should be irreversible, once you let go, it's gone.

I will not also do this but maybe if in total need and when there is no option anymore, might be forced in doing so but hopefully not gonna be into that situation.

It's not giving me that confidence of letting my bitcoin be with the pawnshop because you'll never know what's on the mind of these pawnshops especially if this is like a new service to them.

And as long as I have other things to pawn or if I don't have to do that, I wouldn't do it and it doesn't make sense to take a loan for nothing at all. Might keep it plain and there until the bull run arrives and sell it, I'll follow the style of delayed gratification if the thing I want can be saved and bought in the nearest future.

We don't know the details of the collateral value of bitcoin assets from the deposit regulations, but very worried that they determine the lowest market value of bitcoin from $ 15k-30k maybe they set a value of 23k-25k as the collateral value of bitcoin or it could be lower than -40% of the market price.

We must determine financial management to avoid dealing with loans in pawnshops, because all financial aspects have been planned and have been arranged to need funds at any time without interfering with bitcoin investment, I personally determine 30% for long-term crypto investments, other allocations for emergency savings and gold investments , I will take advantage of both aspects if I need high funds for urgent needs without borrowing funds from a pawnshop.

Just sell the crypto and repay the debt is simpler to me than paying interest on something which we already have money.Well if there is a situation then why not but the pawn shop should understand the risk cause the assets are highly volatile and it's never going to be safe as gold in my opinion. Also it's not possible to claim the ownership like we can do with gold so if one party involves in not returning back the assets then it's going to be a headache again.

If I can freely use my Bitcoin as collateral in any lending service, what difference does that make between that service and the pawn shop? I guess there is not much of a difference because it is just the same service as other lending services out there. I give out my BTC and you lend me some money, which the BTC could be used as repayment if I default on the loan, and if the price of Bitcoin goes up high within the loan period, I will be at an advantage, which might definitely be the purpose of me not selling my Bitcoin but rather taking a loan with it because I have a positive mindset over price. But if the price goes below the agreed average, I might be recording some losses because those BTC will be sold out.
 
The only thing that might make me not hand over my BTC to the pawn shop management is security and which wallet I am also sending it from, because every record will be properly documented and can easily be forwarded to the authorities since they operate under their regulation.

I do not want to leave crypto as a pawnshop deposit for now. I prefer to keep it in my personal wallet. Such a service doesn't yet exist in my country; I still wouldn't want to use it if it did. I prefer to use other goods as collateral rather than crypto.

The emergence of new trends in the service sector can provide fresh air, especially if it is related to crypto, so people can get to know crypto and use it well. And such services indeed have to do KYC procedures because pawnshops are connected with the government.

We need to pay attention to the KYC problem for crypto users because many crypto users don't want their crypto data to be known by the government. It will limit our movement as crypto users.

I'm the one who don't understand what's the purpose to pawn your Bitcoin when Bitcoin is a currency and you can immediately sell it to your fiat, then you can withdraw your fiat. Although it's possible to pawn your Bitcoin, but most of centralized entity still not accept it and most people don't have a good understanding of how Bitcoin's work. Most people would get scammed because they just blindly trust someone and might get scammed twice when they seek someone who can recover their Bitcoin.

If you are the type who has a deep understanding of Bitcoin, there is no reason for you to pawn Bitcoin. Just think about common sense, if you believe that a Bitcoin will be 100k$ next year, and at its current price of 30k$, and you make it a mortgage, you are a very stupid Bitcoin holder.

Then why would you mortgage it if you can just sell it on the exchange or take a loan from the exchange and make your Bitcoin holdings collateral, as long as you are sure of yourself that you can pay what you owe. That's probably how easy it is to understand.

I personally wouldn't do that! Simply because the price of cryptocurrency is volatile. It has a definite chance to go in any direction at any point of the day. So if I keep my bitcoins as collateral in a pawnshop today, their value could be much higher in the next couple of days or vice versa. So there is an element of uncertainty. For the same reason, I am not much in favor of spending my bitcoins for regular purchases. I always keep the numbers in mind and the data shows that Bitcoin has a huge potential. So I am more in favor of holding it unless some emergency happens. That's my personal opinion though and it won't go well with the Bitcoin puritans for sure.
 

Pawnshops will value your items much lower than their real values on the market. They undervalue your items to reduce risk for their business when you don't bring cash and reclaim your items back. They will be able to liquidate your items on the market without losses or they even can liquidate those items with profit from higher values than what they assessed for your loan initially.

If it is Bitcoin, they will feel more risk and value your bitcoin like -30% or -40% from market price. It is understandable as your loan can last one month or six months and many things can happen in this market after a few months.


Just selling bitcoin when you need cash, even with loss if you don't have other ways to have cash without loans at pawshops.

It raises an old reminder that you will always need to have cash to use and for emergency. If you have a reserved cash, you will not have to sell your bitcoin at lost price when you need cash. Don't use all cash you have to invest in anything as you will need cash some days.

Pawn shops allows a person to get credit that they would not get otherwise while at the same time they keep possession of their items, pawn shops can also allow a person to get some money for their items that would be difficult to sell quickly, like collectibles and other similar assets.

However bitcoin has a very liquid market and you can exchange your coins for fiat in minutes, and depending on the place where you live you could pay with your bitcoin directly without the need to sell them, so while some people out there could make use of such service I do not see too much of a need for it.

You don't get the point here. My own understanding about pawning is if you need emergency cash like you have a valuable item and in exchange, cash is extremely low compared to the item you pawned.
Pawning Bitcoin though is not standard practice here because at first Bitcoin is not a physical item, it will just fall into a loan with collateral.

To summarize, if really need that cash at all in an emergency, why just sell your Bitcoin? I understand about the value of Bitcoin could increase or decrease but the fact is you need money. So, it's still you are trading here because no one knows what will happen in the future. Some people are making profits by doing this but if it's not your goal, then no need to "pawn" your Bitcoin.

I approve of everyone doing what they want with their Bitcoin, but it seems to me that the person who pawns them doesn't really understand what this is all about. To begin with, the money you put in Bitcoin should be money that you know you will not need for years, but even if I suppose that I had a big unexpected event that would make me need the money, I would rather sell part of my Bitcoins than pawn them.


Well, it's just more crap like centralized exchanges or custodial wallets, which a lot of people will use.

You seem to have forgotten how pawnshops work. In return for collateral in the bitcoin you get money. Here and now. The current exchange rate is taken into account. And here is the volatility and the price of bitcoin with a reduction in price and a fall? I assume that upon repurchase, you will be returned the amount that was indicated in the contract. You gave them 1BTC and they gave you back 1BTC. What other interpretations can there be? This is not a way to mortgage btc for $10k and then get $20k. Pawnshops give you the opportunity to borrow quick money (but not cheap) when you really need it.


How will you lose everything? The pawnshop gives you the money in return for the pledged bitcoin. In case of unforeseen circumstances, you still have money on hand received from the pawnshop. As a last resort, this can be considered a forced sale under the most unfavorable scenario.



It's not that pawnshops are good or bad, but that the real, physical world is gradually and increasingly integrating digital currencies. Even in such a dubious way for users.

Everyone is waiting for an bitcoin adaption, and when this happens, I agree, in a very peculiar way, they begin to grumble. Completely forgetting that this event is, in fact, the acceptance of btc as a financial asset, on par with gold in a certain niche. Try to look at the news from a different angle.

Some very interesting insights on the Russian pawnshop situation regarding crypto. I know a lot of EU countries where this would most likely (I am no lawyer, but as far as I understand the law) be illegal for pawnshops without the correct (and very expensive) exchange-license to accept crypto and give out mones instead.

I think the main reason I wouldn't ever want to go near a pawnshop, is the fact they terms are usually way in favour of them. Meaning it is most likely a -EV (expected value) game for the person lending their money.
Unless you are desperate I wouldn't ever bother with this, even it were a possibility in my country.

Indeed, question is whether the price would remain the same in the first place and interest would be the only sort of increase to be paid by the one who pawned it 'coz if not and the price of Bitcoin would be also considered, then it is where problem may arise. Lucky if it happen that Bitcoin's price suddenly fall therefore you'd be able to pay less but if it would increase in a sudden then you'd be in huge debt just to get it back and not to mention the interest into it, if you will choose to wait for its price to fall. It is better to use other collaterals I guess than to use something having a very volatile market price.

Also if it is pawning, I would prefer taking a loan to an amount I can afford to payback in a short period of time. Atleast in such way, I won't be minding no other additional payment other than the interest itself.

If the rules on pawning bitcoin and other digital assets have been clearly established, why not? As DaveF pointed, this is no different than getting a loan and using your bitcoin as collateral. If the value of your bitcoin at the time of the loan is locked to what it is for the duration of the loan period, I think that's a good deal. If it's not, and the terms are favored towards the lender, I wouldn't do it and just get a regular loan instead.

I would avoid leaving my BTC as deposit in a pawnshop, because Bitcoin's price can become bullish while in hands of the shop, so I wouldn't be able to sell my holdings on the moment I needed or wished.

As far as I know this service isn't available in my country, Brazil, yet.

I think every services involving Bitcoin have their importance and impact on the industry. The more, the better. This one doesn't fit for me, but it doesn't mean it can't be useful for other people. In extreme situations where the person doesn't have any goods or patrimony, he may need to give up his BTCs to a pawnshop for money or credit, so it has practical use cases.

With the volatility of Bitcoin I could see the desire by some to want to take advantage of pawning or loans on their BTC in order to try and have their cake and eat it too.  It's a bit of a put option on Bitcoin's price, albeit with an extreme interest rate and pool loan value.  However, if you were to pawn your coins instead of spend them during a bubble, you might find that you're able to buy them back at an attractive rate if the price goes up, or just leave them and enjoy your funds if the price goes down.  Bitcoin being extremely volatile is what makes this almost attractive to a gambler with some coins burning a hole in their pocket.

I agree with you, I see this just as a way to overcomplicate something that already exists (borrowing online, or even on this very forum). What if the laws change and the other person, somehow, feels entitled to keep your BTC because they went up in price? Personally, I would never take such risk, too many grey areas.

Whenever we provide gold as collateral we'll be able to see the documentation mentioning the value of gold along with the weight. This serves as a proof, and the interest for the money borrowed with the gold collateral will be calculated. This is the procedure followed everywhere and the same gives trust on the service provided. In such a way if the pawn shop have the proper documentation, then it is good that we submit bitcoin as collateral and borrow money. However it has the highest risk than other forms of collateral as it is easy to destroy the trace of transactions using different mixing services. So, it all depends on the pawn shop, whether they're trusted one in the business and does they have registered with the government.

Okay...but at what pawn shop does liquidation even occur? If a borrower pawns $10,000 worth of Bitcoin (let's say rate is $100,000 for argument sake, so, 0.1 BTC) for $6,000 cash, then the price tanks by 60℅, the borrower doesn't get "liquidated" they still need to pay the $6,000 back plus interest to get their 0.1 BTC back. Which, if they truly don't believe in Bitcoin at that point' they can abandon the loan for a $2,000 profit at this point.

If the BTC goes up, repayment is obvious in order to get the higher valued asset back.

Regardless of value fluctuation of the Bitcoin, the amount of cash to be repaid is all the borrower needs to worry about. 0.1 BTC is always 0.1 BTC and as far as I know - "Liquidation" is not a common term when pawning something.

if you have other means to exchange your btc to your fiat, why not do it and not use the pawn system? i do not see the logic of this move unless the person in russia has no other option to convert his btc to his fiat and he badly needs his fiat.
i can agree with other physical belongings to be pawned but crypto or btc, i don't think it is acceptable when we are already in this digital age where you can practically transact over the net.

I am quite against this service also in a country like Russia.  Who could ever go to a pawn shop to sell their cryptocurrencies?  It's roughly like having Fiat money in your hand and going to a bank to ask for Fiat money in exchange....how crazy is this?  kyc...another initiative to be able to control you better.

How could this be equally balanced with the both sides not being affected considering that bitcoin is a volatile cryptocurrency, i don't think it's a good idea for me personally but we can still finds alot of people who will have this as a take in, but when the bitcoin market rises it may not pay the person than it would pay the pawnshop.


Nothing yet like this in my country, i think this can be easily achieved in countries where there's no much strict law enforcement against bitcoin and cryptocurrency.


Not a bad idea even though much people may not really show interest because it appears as using your cryptocurrency as a qualateral for taking loan and the likes.


This aspect will also discourage many from having interest in it because ifnyou consider most of rhe bitcoiners, they are privacy consciouss and will try to oppose anything that goes with KYC or government regulations.

Depositing your BTC's into a pawnshop is kind of similar to every other service in which you must give up custody of your keys, it is similar to lending and earning platforms and centralized exchanges, though these platforms are regulated differently and the purpose of depositing is different, but the risk is the same, not your keys not your coins.

Customers complied to kyc in all of the centralized exchanges and crypto companies that have collapsed in recent events, but it didn't stop them from losing their money when the platform bit the dust. The message is simple, don't give away the custody of your BTC's for any reason, you may never get the coins back.

Nah, I wouldn't go that far to pawn my BTC, I would rather pawn physical objects, like jewelries or even your car. The worst thing that can happen is that you totally lost your bitcoin here just because of some technicalities.

And there is also the trust factor involved, and as far as I know, as what we have been preaching, not your keys, not your coins.

I'm totally against it. And even if this service is available in my country, I wouldn't do that. So voted for No.

Nope, nada, never, nein.

What's the guarantee that the pawn shops won't just steal your crypto? I mean, they can just do it like that, and nobody can reverse the transfer since it is decentralized currency.

Most people go full scammer when they receive someone else's crypto. Because now they know how rich it made OGs and they also want to be rich, but quickly, in a few days, not in years, and without doing any work at all.


Who the hell does KYC in a pawnshop? Some of them are even operated by gangs/mafia.

It's kind of hard for me but I've got this thought already that saving my bitcoin that's being held but at the same time use it as a collateral. My decision will depend on the laws if me(pawner) will have some protection from doing so but if not, I'll choose to do it with some of my altcoins but not with bitcoin. Is it just me that I've got a different treatment for the altcoins that I hold than of course, Bitcoin? And if I've got really no option, I might just sell a little amount of my btc holding than pawning it, paying the interest and there's the volatility that the value might not be in my favor.

Not yet but I think if it's with individuals that are also in crypto and I know them personally, maybe they'll agree.

This is inevitable, anything that can be attached to bitcoin and integrate it with financial services is possible.

Interesting, but I would never trust a pawnshop in any case, but I definitely understand how it works and know that people in the past in my area used it a lot. Generally, they pawn items they never expect to get back anyway.

Pawn shops here only accept gold or expensive items with a resale value. I guess the problem is not so much people willing to pawn BTC but pawnshops willing to accept BTC volatility.

It could even be a gamble. Pawn 1 BTC for maybe 30% value now, and buy it back when BTC is super high? You end up making money

Personally, I think it's a cool option to have. It could provide an alternative way for people to access funds using their cryptocurrencies, especially if they need a short-term loan. However, ensuring proper security and compliance measures, like KYC, would be crucial.

They don't have to go after you, they will do just as all those platforms when the value goes close to what they lent you then they will liquidate it and that's it, that's why they ask for regulation on this:


Think of the situation when the coins go down 60%, you get liquidated and the next day it shoots back up to the original value and you end up with the $7k you got as a loan for you BTC. Not so favorable anymore, right?

For me, every service in which someone gives its BTC for this or that reason is essentially wrong. Most of those who are active on the forum know what happened to companies that offered tempting interest on BTC deposits, and yet they were companies that operated at least somewhat in accordance with the law - while on the other hand, a pawn shop can literally disappear overnight and you can easily lose everything.

Of course, there is also the issue of KYC and the protection of this data, but also the problem of personal safety if it were physical branches - which leads me to conclude only one conclusion, and that is that this is a very bad idea no matter how someone presents it.

Pawnshops are like many services. So if you can use your bitcoin as a collateral on exchanges, on lending services, you can do it at pawnshops if they accept bitcoin. Pawnshops somewhat are similar to lending if I am right.

If you ask me when I am a person who wants to use my bitcoin as collateral at pawnshops, I don't have rights to approve it. I am not the business owner/ operator.

If I am a pawnshop owner/ operator, I will have to consider risk of Bitcoin volatility. If my taste is accept risk, I will accept bitcoin as collateral. Obviously, I will only accept it if my pawnshop's Terms of Service has a liquidation term.

With a liquidation term, I might get benefit when I liquidate the collateral like buying a discount bitcoin. It is double benefit if I am a real Bitcoin investor too.

Is there such service where I am? Not directly, though I am sure a deal could be brokered to fix the issue below:


I thought about the same thing. It seems that the deal would be heavily skewed in the borrowers favour. There would have to be adjusted terms in order for this to work.

I suppose the above answers both of the other questions in the OP.

No different then taking a loan against your BTC from some of the larger places that do it online.
The biggest issue I see is regulation and price volatility and the rules that you are agreeing to when you do it.

You give them 1BTC they give you $25000. If the price goes up can you get more cash from them? Or do they give you some back.
If the price plummets back to $15000 and you walk away do they have any way of going after you?

Personally I would not, but that is just me. Would rather just sell and buy back. Unless they are offering very low interest rates, which pawn shops are not known for.

-Dave

In Russia, there is a demand for digital deposites in pawnshops. According to information from forbes.ru, up to 100 requests for money secured by cryptocurrencies are received monthly. In this regard, the pawnshops asked the Central Bank of Russia to clarify the possibility of accepting cryptocurrencies as collateral on a par with gold. To which, the regulator didn't find grounds for banning such activities. For now.

I remind that in Russia the legal status of cryptocurrencies has not yet been clearly defined. Most likely, the legislative framework will be finalized and transactions with digital assets will be regulated so that they receive the status of a full-fledged liquid collateral. And now, it turns out that pawnshops in Russia can accept currencies as collateral, and there are no laws prohibiting this.

Currently, digital currencies are recognized as property only for the purposes of the laws "On Combating Money Laundering", "On Insolvency" and "On Combating Corruption", in other cases, "legislation doesn't establish the legal basis for the circulation of digital currency", says Central Bank of Russia.

Also, in that article (I warn you, the text is not in English), a probable problem is voiced when it is physically impossible to transfer cryptocurrencies to a pawnshop for storage. It seems to me that this is solvable. It is enough for a pawnshop to create its own crypto wallet, to which the client's cryptocurrencies will be sent for temporary storage (until the borrower's debt is repaid).

P.S. This is a slightly loose interpretation of information.


Now let's move on to the question posed in the topic title.
- Would you approve of the possibility of leaving crypto as a deposit in a pawnshop?
- Has such a service not yet appeared in your country of residence?
- How do you feel about the emergence of such new trends in the service sector?

I think that this service in a pawnshop will not be possible without the KYC procedure, which few will like.

Ready to discuss this topic?