Bitcoin Forum

I'm opening this post to warn lenders to not lend out cryptocurrencies without a proper collateral. You not only risk your own coins but you risk the coins of escrows too. And when you take an account as collateral check carefully if a loan is on that account.

I write this because it happened lately that a lender lent out coins without collateral. The borrower removed the personal message under the avatar that he has a loan and sold the account. The outcome was that someone paid for the loan and it was not the borrower. I won't say any names and i didn't even gave red trust yet in order to not pinpoint the case.

Please don't be stupid by lending out without collateral. I'm actually surprised that it still happens since everytime i have read about that in the past there were many that warned the lenders already. Accounts can be bought or sold anytime and you never can be sure about the one controlling the account. And when you give out loans without collateral you practically ask being scammed. And you even risk escrows that might be involved and don't find about such thing. Which is quite easily done since you can't check everything out.

Only a headsup. Don't do this!

It's not that hard to spot when someone really needs a legit loan, even withouth collateral in some cases. If the member can sign his old btc address, and the
amount isnt a great one in contrast to his/hers account, i believe they will pay up.
If that sort of rule was to be used, then one could argue that no escrows should be trusted, since they also can sell their account and take the escrowed funds to themselves,no ?

Very good advice. I'm also surprised that many lenders take the risk of lending without collateral and many people requesting loans ask them without any collateral, or with the intent to scam straight away... That's one of the reasons I now rarely go to the lending section :D

Thank you for the advice.

I want to suggest adding forms of collateral for new users.

Accounts are nowadays sold with the old private keys. You will not know if he really is the old owner.

And the worth of the account is nothing you can trust on if you don't take a collateral. Since what will you do when he sold his account after you gave him the loan? Will you try to get it from the new owner? That's an unsure game.

You really should not be so uncautious. You ask for being scammed. I say that because this happens on the forum, this is no theory.

Of course you need to not trust escrows, though most escrows are trusted because they have shown some form of morals that would make it unlikely that they will sell their account for a fraction of a bitcoin. And accounts asking for loans are only in very rare cases so established or trusted like escrows.

On top, escrows often had way way more coins in escrow than a loan or account can be worth. So if an escrow would want to scam then surely that would not be for the amount of loans that are lent out on the forum.

Don't feel so safe. If you behave that way then you will bring escrows in risk too. Since when they get tricked by the scammer then it might be that they pay in order to not tarnish their name. It might be that some of these no collateral loans only found a good ending because escrows paid, because they felt responsible.

Only saying...

There are things of worth that can be given in escrow. For example altcoins or accounts, when they can be secured and the value is real and can not be faked.

I just don't bother with lending in the first place with bitcoin. You are jus asking to be scammed.

Its a good advice you give here. i appreciate you dont call out any names, but i am okay with having this out. it was me who escrowed the deal and it was me who paid the open loan to protect the one who gave the loan.

i wasnt able to figure out that the account i escrowed had an open loan. i watched through the last posts but i missed it. after the deal was done i was contacted by the person who gave the loan. as the parties were not able to deal with the situation i decided to pay the debt.

i am giving out loans, so i know how it feels to get scammed. why did i pay the open loan, even i didnt take it? well, after thinking about the whole story i feelt it was my mistake by not checking all things that i shlould have checked. so i decided to pay.

I was later repaid by the seller of the account, not in btc but he did some work for me. Some would say it didnt cover the full amount but at least i got something back.

Two things i learned from that:

As escrow: clearly state what your tasks are. escrow are only responsible for smooth trades, nothing else. explain this to the parties.
As someone who gives loan: no collateral, no loan. no exceptions.

I think this should be in the lending section.

I think it was a nice move of you. When i check for loans or scams i do a google search with something like this:
and see what comes up. Of course it seems to be needed nowadays too to check avatar messages and so on.

Though i tell the buyer always that i made a quick check but that i can't ensure that there is nothing hidden. That risk has to be taken by the buyer always since loans could be given out via pm too.

Besides that... traders pushing for a fast transaction are a pain... though i then feel more like they might to scam me, so that i don't get that something is fishy or so.

Good luck with your future escrow service. I think the way you handled your parly error is an advertisement for you. :)

If bitcointalk got rid of lending and signature campaigns, it would be a much better place.  People should not be getting loans on a discussion board. Friends or family or professional lending places exist for that.  Both the lending section and all of these sig campaigns are why assholes from around the world flock to this forum.

then lending will be the pawnbroker.
i don't think we need to do this.

Since the search included the google search it has become more handy. and yes if ppl pushing you to act faster something isnt right. i foten get requests via skype or pm and ppl cant wait for a proper reply. if someone is trying now to push me by telling me they are short on time i cancel or deny the deal. better safe than sorry.

i dont think the lending section is the problem like The Pharmacist wrote. its more the people using it. hence i suck at trading i decided to loan out BTC. if you are carefully and dont get greedy it works. of course i got scamed a few times but only three loans were a total loss. collateral or escrow is a must.

we are glad we have some trusted escrwos like sebastianju around.

If you would take away this then you would hurt one of the main characteristics of bitocin. Bitcoin is money so everything related to money needs to happen. This is no forum for a different topic. Bitcoin IS money from the start and a big part dicussed was trades and such.

You can't take that away.

Yes those things need to happen but not necessarily on this forum.  Signature campaigns add nothing and encourage lousy posts, lending brings in all the scammers.  Just my opinion.

i think we shouldnt mix lending and sig ads because thats two different pairs of shoes :)

Sorry but this is arbitrary. You never heard of the biggest scams happening on this forum? They were investments. Some fully scam, some inept businessmens, some businessman with exceptional bad luck. The same goes for trades. How many trades are scammy? Or currency exchange.

Stopping loans is somewhat arbitrary. In fact loans are THE area that could be the most secure if every lender would be smart and only lend out with a nice big collateral. Though sometimes the greed wins over being smart. It's no reason to ban loans. Maybe ban loans for newbies, yes, i would be with you. But generally it can be very safe.

And signature campaigns? Yeah, many posts happen without being constructive. Though many posts that are helpful happen only because they get a payment too.

If you find a spammer then report his posts. Staff will take care of it. Or notify the signature campaign runner. I'm sure most of them want to keep their campaign clean. I mean it's advertising for them. They don't want bad advertising.

I think this is a good and useful advice for lenders here, there is a lot of scammers pop up daily in the lending section asking for loans without valid collateral, so we should take care about this
I don't think that each borrower without valid collateral is scammer, there is some honest people simply don't have this collateral and needing the loan same time, but other hand we can see the scammers asking this too, so we have to take this advice seriously

What are the acceptable collateral in the lending business? I heard it is mainly the user account. But it is difficult to evaluate the worthiness of  a user account. It is also difficult to check posts to see if there is a loan attached to the account.

If you want to take an account as collateral then you need to know the account of course. You need to check a lot of things then. Is a signature available, signed with an address that account posted a long time ago in a post that is unedited. Does the lender provide a signature stating that you took it as collateral, including date.

Then do a google search for site:bitcointalk.org scam and site:bitcointalk.org loan to find if the account has taken loans or is a scammer. Check the trust rating including the untrusted feedback.

Check the Post Quality.

Then check the auction and sales subforums to see how accounts are sold.

Most loaners that take accounts as collateral value the accounts way way too high. Which means instant loss most of the time because many lenders don't want the credit but only want to sell the account fast that way.

So better take the lower price tag for the account and then even drop 33% value. Then it might be relatively safe.

I stopped escrowing accounts that are low priced because the work involved and the risk is way too disproportionate.

Thanks for the warning. Too many are impatient and don't want to wait for their escrow service to come online. It is totally worth waiting even if it sets the transaction back by 1 or 2 days.

I always wanted to try to be a lender but the collaterals only seem to be forum accounts, arent there any other collaterals i could use? I know some people ask for altcoins but it's stupid, if you have altcoins you dont need bitcoins, aren't there any other digital goods that are easy to sell and are not volatile?

I think sometimes  for people, it is difficult psychologically to sell cheaper than those purchased, and he expects the price increase, its one from reason that not sell but take loan in btc.

The most used collateral is the user account. It is the most convenient form of collateral. However, the price of the accounts dropped quite lot recently in bitcoin terms, mainly due to the rise of bitcoin price.