Bitcoin Forum

 ??? if ppl are trading their altcoins for btc loan why the hell not just sell the altcoin on exchange

taken from the sticky (https://bitcointalk.org/index.php?topic=577765.0).

taking collateral is the most efficient way to protect the lender. especially on the internet where the person who borrows your money could be half a world away.

The value of the collateral is not always the same value as the loan, which is why the loan taker can not just sell his/her altcoins.

i just think showing people your bank statement or your true identity is the best method of collateral. These accounts here have way too much value on them. Accounts on bitcion sites across the maps have values of resale but they arent this much. Some scammer could just sit here for a year bide his time fake being legit just so hes got good rep and then hit people hard. its interesting how many scams ive already came across reading threads in here. very interesting how all the people in this community think

you should've seen how it was before people started asking for collateral. friggin' scammer paradise. just like btcjam where you only need to provide various personal documents.

Well that is too bad that there are that many people out there that would be willing to steal from each other

People may want to hold on to their altcoins if they expect an increase in value soon.
I've seen a number of people offer altcoins as collateral, so they must have their reasons.

the value of collateral is NOT the exact amount of your loan. some would accept your alt coins but expect that value is lower than current exchange rate. Example is if your alt coins are worth $100, the loan that will be given to you will be $70-$80 or sometimes lower because if the lender approved you loan request with the same amount of exchange rate then your right, borrower should have rather exchanged the alt coin than use it as collateral or borrower will not pay back since borrower received the current exchange rate of alt coins.

id just rather use something more valuable then altcoins none of them have any stability

fact is most loans requests are invalid...  we have a lending section to keep all the trash in one place away from the rest of the forum.    most people who want to borrow fail...  so very little actual lending goes on.

From what other people have said before me, it appears that taking out loans and freezing altcoins is seen as a better investment than selling altcoins. Honestly though, I feel like a much better mindset for taking out a loan and using altcoins as a collateral is to alleviate the danger of the coins crashing in value. If you use a coin that can jump in value enough to use it as collateral rather than selling, it can also crash and burn. If you have an active loan while your altcoin dies, you can simply default on the loan and say goodbye to your altcoins, which are now worth much less than the loan.

alt coins as collateral are risky of value varies, even if it is a major one.
solid collateral is less risky on value matter, why people are still using alt coins as collateral?
even though alt coins is the best collateral, if the alt coin drops, loaners will get "shrekt".
bitcointalk account does not value a lot, as they can be counterfeited.
lenders should be more cautioned on taking altcoin collateral, as those alt coins have no value guarantee at all.

explicitly, man.