Bitcoin Forum

Somebody tell me he did not believe that lending can work with cryptocurrency.
What do you think?

I think it can work. Why? Read this white paper:
https://www.maxicreditcompany.com/whitepaper.pdf (https://www.maxicreditcompany.com/whitepaper.pdf)

Everything including lending can work with cryptocurrencies but the bad thing is most of these lending projects are likely to be a scam. I haven't checked maxicredit but as for checking the tenure of the website, it looks new and one shouldn't be quick investing to this website.

Don't care with the investing.
The interesting thing is that can it work, is the conception good?

If the ICO interest somebody then, open a new topic.
But here discuss about the concept, please.

Via smart contract? And what will happen if the borrower doesn´t have any money on his wallet? How smart contract then help you?

But cryptocurrency ledning platform like NEXO or MoneyToken have future - because they will lend you as much money as you have. So if you do not have money for paying the loans - you can´t borrow.

Lending is definitely possible on smart contracts , we have projects already using smart contracts to issue out crypto backed loans. The  truth is the power of smart contracts are limitless and I think the blockchain community is yet to harness the power of smart contracts. In a couple of years from now, one will be amazed with the amount of applications and industries that will benefit from smart contracts.

Just visit the lending section (https://bitcointalk.org/index.php?board=65.0) of this forum, and you will be able to see how lending can work with crypto too. You just have to have a good escrow and to offer some collateral.

Smart contracts are often overrated. Using smart contract may sound like something sophisticated, while in reality they are not overly advanced (yet). Smart contracts are very similar to using escrow. The difference is the escrow is replaced by a piece of computer code that is executed automatically when certain conditions are met.

I think we need to be careful about the current situation. Because at the moment it doesn't allow us to do new things that we haven't tried fully. because as far as I know the new thing is certainly certainly guaranteeing our lives in the future.

Lending covered by crypto collateral is only a little piece of lending.
The mentioned white paper https://www.maxicreditcompany.com/whitepaper.pdf (https://www.maxicreditcompany.com/whitepaper.pdf) is interesting because it deals with uncovered lending and wants to build a credit score system. That is much more than available now.

Lending already exist in cryptocurrency with crypto collateral I don't know if it is using smart contracts but I think it is especially on Ethereum blockchain, check it here https://nexo.io

whatever system behind it , is that smart contracts or traditional concept or whatever.
in the end , Lending just a scam , for me , is better u put all your money to gambling table, than put it to lending investement,
if no money left, how they will pay you ?,

Of course it can be done by smart contracts but lending projects has some bad reputation due to scam projects connected to lending.
Investors need to regain trust in lending projects again.
Invested in ETHLend  (Lend) and can confirm it as a legit project.

Actually, blockchain can help to get back money easier.
Of course today you can leave behind you the crypto world to try never pay back the money you borrowed, but also, in that case, it will be visible that you don't pay back your debt.
Blockchain as distributed ledger is perfect to backlist bad debtors. It can use even outside the cryptocurrencies.

Last year, lending platforms were rampant. And most of them ended up in grave.
I believe there is some sort of loophole within this lending system why they keep on sprouting.
Are there users interested to use their services? Or they are just using the lending platform to get their easy prey?

Now projects lend with crypto collateral. If last year when 1 Ether was 1000$, assume you get 500$ by 10% interest rate to your 1 Ether.
When the price has fallen 45% all your Ether was gone. Who was happy in this situation? I guess nobody. The whole crypto market shrank so covered lending project can't grow.
The interesting MaxiCredit project is that it tries to solve the problem of volatility. If it works, then there is the potential to convince much more people to use cryptocurrencies than now. Now only a few people know about projects like this, but twenty years ago nobody was a user interested in social media only the need was there.
Personally, I would borrow money if I don't have to take a high risk of price fluctuation.

I don't have much confidence lending in cryptocurrency. How do you lend when there is no 3rd party that can settle your dispute if it ever occurs?

Think about, normally only a few percents of the debts are non-performing loans, which means they don't need a 3rd party.
On the other hand lending via smart contracts doesn't mean to eliminate jurisdiction. A credit agreement can contain all the required data from the debtor and clearly state who is who, so when there is a dispute they can go to the court. You can sign digitally contract outside the crypto world - using mainly the same algorithms - and many countries accept them. I heard for example that Georgia (the country not the US state) has blockchain based property register, so probably it is solvable to develop smart contract to sell a property or get mortgages.

I read the posts here and the metioned White paper, and they try answer all the few question, what was asked here.
I won't invest more than 1% of my money to any ICO, but I collected some coins in promotions like https://www.coinbase.com/join/5c3763b6bc9d990e8751b8af (https://www.coinbase.com/join/5c3763b6bc9d990e8751b8af) , https://etoro.tw/2GYVGhz (https://etoro.tw/2GYVGhz) wallet and https://ddex.io/referral?referralCode=U6JB (https://ddex.io/referral?referralCode=U6JB) so I will risk my "free" coins to invest in project like this Maxicredit.

Please discuss ICO and investing in https://bitcointalk.org/index.php?topic=5126527.new#new (https://bitcointalk.org/index.php?topic=5126527.new#new) topic.
I started this topic to discuss the concept of such projects.

There is almost no form of investment, lending inclusive that cannot exist on smart contract. There are projects that have successfully deployed their technology on smart contract, which is one of the benefits that is obtained therein. Although, you would need to check through every terms and conditions of lending on blockchain technology.

there is an interesting part in your WP.
You says that you will create a new cryptocurrency Maxit, and its price can't change more than +2 or -2%.
I understand that you will have reserves. But what if the price go up with 40%? Than you will have to have more reserve to achieve price stability. Or how want you achieve price stability?
And if Maxit can gain every day 2%, that means it can worth 1000 times more a year later?

First the second question:
Theoretically yes, it can worth 1000 times more a year later. But the money supply is continuously increasing so there is only an extremely minimal chance that will happen.
As of a 40% gain need an 18-day continuously increasing. In a speculative way, it isn't profitable, because of the speculator need to buy many coins and can't get enough high profit compared to its risk. It can happen also, while there is a serious turnover, but in that case, our reserve also grows as our incomes from the commercial platform.
Probably there won't be more than 30-40% price increase of Maxit against USD.

There is a loophole but I saw a very few of them became popular and looking good within the process. Yes, there are still users who have been leaning to this kind of service. I never used them but I used to check all of those projects. Nothing new and no one got my interest to interact with any of those projects. As for the investors who are looking at it, make sure that you are putting what you afford to lose and again and again, do your own research.

That's because he did not understand how crypto works, and how smart contract works.
If we will browse the projects in the market, you can find a lot of lending business and they are using the blockchain for that.

This one is a lending platform - https://coinmarketcap.com/currencies/debitum-network/

There are also others like Fintrux. But both Debitum and Fintrux target small companies.
The interesting in MaxiCredit - https://www.maxicreditcompany.com (https://www.maxicreditcompany.com) - is that it is about a wider range of lending. Even personal loans.

Smart contracts for lending how possible is that? I heard the smart contracts on the ethereum are not truly smart because they do not truly integrate with the real-life environment and need to be triggered internally. If this is true then i think smart contract will not be a good fit for lending

Traditionally, smart contracts involved the platform Ethereum and he is the leader in this. But now there are many other projects that also use it.

Now smart contract uses oracles to get data from the real world, like current time.
But it is possible to invent a blockchain which can do this. Maybe it exists already.
Does anyone know about such a project?

I have thought about building a platform that enables lending via smart contract but there will be a lot of things to consider which I haven't been able to do yet, one of it is that what will one use as collateral since the loan will be on the blockchain.

Let's say for example you are giving tokens on exchange as loans, how would you be able to trace the person who collected the loan if they refuse to pay, or will there be a way to reverse the coin back to its original wallet, if so then the purpose of the blockchain have been annulled because the blockchain was built to be decentralized.

Think about, lending in a traditional way contains many types of uncovered loans - credit card, personal and consumer loans. Where the important thing is to predict that the potential debtor will or won't pay back the loan.
In blockchain where every transaction is visible, it is much easier to predict who will pay and who won't. Also, a blockchain can register credit score, which is built upon previous credit history - if you build your credit score many years long, you won't it ruin directly.
Blockchain also makes it difficult to hide for bad debtors.
I know many things mentioned in this white paper https://www.maxicreditcompany.com/whitepaper.pdf (https://www.maxicreditcompany.com/whitepaper.pdf) will be available only in the next years, but the whole blockchain, smart contract technology is about the future, not about the 0,1% who use it today.
If you are really interested in lending via smart contract send me a private message.

The easiest lending can be done through automated collateral. You have a coin that you don't want to convert to fiat or to another altcoin but you want to invest in a project that you are sure will bring you profit. You use the collateral to get an automated loan that will give ownership of the collateral to the lender after a certain amount of time.

Hello,

Yes - that blockchain exists already - check out æternity :)

æternity is a scalable smart contract platform that has state channels and oracles integrated on a protocol level (layer 1).

You can find some more details about oracles in general and which projects use them HERE (https://blog.aeternity.com/blockchain-oracles-657f134ffbc0).

Let us know if you need more info,
The AE Team

Thank you. That sounds good. I will first visit your site and read what you send me.