Bitcoin Forum

Would anyone have interest in collateralized loans of Bitcoins backed by valuable goods? Any feedback would be appreciated.

Sounds good, but I'm concerned about the logistics. How would the collateral in question be safeguarded?

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

That's the idea.

Unless this is a purely local effort, on a larger scale, things will get more complicated.
- I can't send you big objects since it is likely shipping costs will be outsized. That means you should set an explicit limit to object size.
- How are the shipping costs handled?
- How is the value of the object in question determined? (You won't accept a toothpick for a 1000BTC loan, but what will you accept?)

Just a few points, to brainstorm :)

You can use virtual items as collateral, such as TF2 items, WoW, DOTA 2, D3, etc. No shipping and cost of items is widely known.

Ah, very smart! Sounds great.

[edit] and no need for vaults and shotguns then ;)

I may or may not be willing to do this, really depends on price stability as well as resale market. I would certainly consider it tho. I suppose if it was priced correctly anything is possible. Obviously shipping costs would prohibit larger or heavier items, but there are still plenty of inexpensively shipped goods that would work. As far as what is acceptable and its value, just like any real life pawn shop you never know until you ask. What might be worth 1 BTC to me might be worth 3 to some one else. As the issuer of the loan I would have to consider the possibility of non-repayment and resale value of the item and price the loan and fee accordingly on a case by case basis.

virtual objects for collateral.  It's an interesting idea, I give you guys props for working on thinking outside the box.

Nice idea.  What sort of rates are you going to offer on virtual goods?  You are surely not going to know what the value of all goods from all games etc are?

That is very true, but I do have google, and I know a whole lot of gamers.

My only problem is...

Why, as a debtor, should I go through the 'hassle' of sending you collateral if there are others that loan out without collateral?

(Because you would offer larger loans?)

On the other hand, you'll definitely be bugged less by scammers  :D

A few reasons actually:
1) You are more likely to be approved
2) Zero identification requirements (less hassle and more anonymity)
3) Because my fraud rate will be lower I can offer larger loans at more inexpensive rates
4) Often people need Bitcoin loans in times of scarce Bitcoin liquidity, and in those times you will be less likely to get a non-collateralized loan.

 Loaning out fiat for holding onto bitcoins is good. Virtual items for bitcooin loans is pretty neat.

Forget the "loans" concept, how about simply helping people convert their unneeded stuff to bitcoins.  

eBay has a list of privately run "Drop Centers" that will take your items and list them on eBay, take a commission, and then send the proceeds to the party that dropped them off.

Like a consignment shop.

The problems for that are shipping costs (sending to the drop center, then the drop center shipping to the auction winner), regulatory costs (pawn shops / consignment shops / drop centers have restrictions to prevent selling stolen property), and basic economics ... after all the hassle, is your old but still working blender going to get you even a satoshi after going through all this?

But there probably is an opportunity for an existing consignment shop that has a reputation for being fair (and who only accepts items that have a chance of being successful at auction or direct sale), to add payout in Bitcoin and increase their inventory as a result.  

From another thread:

I like the idea of this. In this thread https://bitcointalk.org/index.php?topic=106465.0 (https://bitcointalk.org/index.php?topic=106465.0) some GLBSE shares were offered as collateral. The idea of collateral is a good way to allow larger loans on newer members.

Do you have Battletoads?

Ok then, give me an idea of conversion rates.  WOW gold, EVE ISK etc!

PM me a list of what you have

Sent a PM with an idea of assets!

Another big unanswered question is: Who sends first?

Also, if you allow 100% anonymity, and the deposited good is of a lower value than the bitcoins borrowed, haven't you just designed a fool-proof way to scam yourself out of the difference?

With virtual goods other than bitcoins, there might be the issue of charge-backs or fraud allegations to look out for, before sending loans out.

With regards to physical goods, there are smaller objects that could be sent as collateral, such as jewellery or collectibles/rarities. I guess you would have to be able to ID the items though, to see if it's the real deal.

some games such as Eve online have a single server/ universe, however, how are you going to deal with WOW gold/ items where there are many many servers?

Any follow ups on this?

I think it was a good idea, but needs a lot of work.

I have heard nothing!

A good idea agreed but it looks like there were too many issues to overcome.

Carefully considering virtual currencies and goods for games, the problem is they revalue too often. I would have to have experts for every game and then it would still be risky, then there is the whole issue of finding buyers if the person defaults.

I am still interested if you can iron out the issues.

About the revalue thing, what about accepting digital game money instead? Digital currencies are subject to appreciation/depreciation as well but are probably less volatile than item prices, no?

Really depends on a case by case basis what it is. I am willing to consider anything.

You probably need to figure out what the best test game is. Diablo III might be one since it has a very active Auction House and I've seen it mentioned multiple times here on the forum. I can help out since I play it myself.

+1 to this idea.

Eve online would be another good test subject.  Its in game currency can be converted to PLEX to pay for account time, so there may be a way to utilise that!

Count me in to try this idea out.  What games should I go after?  I have also heard Diablo III would be good for this sort of thing and I am already planning on signing onto Eve online as soon as I can get a friend to refer me for the extra golds.  (He let his expire so I have to renew it for him or wait until his payday lol.)

I have capable computers and lots of interest but I am still transitioning to PC gaming, so now is the ideal time I have only bought a couple and I'm not "committed" to anything yet.  I used to play xbox for all my games.

Definitely an interesting idea.

+5

I can recommend you for EVE if you like.  I am a keen player and have a resonable understanding of the economy (its extremely complex).  PM me if you want an invite!!

I am also happy to assist in evaluating Eve value!!

Ah EVE Online, I had to get away from that game I was spending to much time playing it and not enough making coin.

Hmm games that have real currency value would be a good thing to trade - EvE isk goes for about 800 000 per PLEX right?