Bitcoin Forum

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...not sure why it seems to be tolerated here.  Please support IBB and
help put these thieves out of business ASAP!

(If there is some service you really need which IBB is not providing, I am
willing to work with them to make it happen, e.g. deposits, at
0% interest of course, chequing, whatever.)
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HKUQl1SRTIIVWEIiMfM0REEAWbAionmwSftaVOliUtzm/93Zm6iKklSr9z3oyawZon/LPSYu2tB+R0ViSj6dqD0=

Can you provide interest free loans for amounts like 10000+ btcs and absorb the damages due to scams?

::)

Also most amounts borrowed here would qualify as microcredits. I don't really get why anyone would borrow BTC at such rates or at all, but who am I to judge?

IBB seems to need some steady source of income, I wonder why they didn't buy some of these PPS-mining bonds yet.

It's "tolerated" here because the "usurers" provide a service that others do not, without coercion. We don't have thugs breaking bones, nor do we force people to borrow from us. Additionally, we let people borrow from us without judgment, which I'd imagine you might have trouble doing.

But if you must barge in and start calling honest people thieves (good way to make friends, by the way), would you care to elaborate on how you'd expect large loans to work in this environment? All moralistic "anti-usury" (i.e., interest) proposals I've seen have skirted the issue with fairly minor semantic differences that seem to miss the point. And the actual point is to act against one's own self-interest, so I'm not sure how you'll make that happen without a vengeful god standing menacingly over everyone, ensuring that rational self-interest is preserved with a threat of violence.

God bless America.

http://www.youtube.com/watch?v=rJE_Sc1Wags


It takes two.

Just to make things clear: I do think the interest rates are high, and would like them to be lower. But with the number of scammers in the community and the uncertainty over exchange rates, I don't see interest rates going down significantly in the near future.

Theievs? Are you fucking joking? I LOVE the people that "usury" me, They make my life so much better by allowing me to have money WHEN I NEED IT, And all they ask is a service fee.
Sounds like a business to me.

Riddle me this: How can they be Thieves if when they Give You money, and then ASK that you sign a contract that will force you to pay WHAT YOU AGREED TO PAY
It is Impossbile for Anyone of these "usurpers" to "steal" anything from Anyone.

WE ARE GIVING THEM THE MONEY.

I dont' think IBB will be able to fund my 15,000 BTC loan request.  Do you think you are able to do it?  You say you are willing to work with them to make it happen.  Also I would be interested in your 0% loan.

+1

I agree with this because the risk is so much higher when lending on here.The uncertainty over the exchange rates makes life more difficult than it ought to be really plus there are a fair number of scammers still on these forums (despite the old scammers being exposed and such).This is what makes risk higher for lenders and so they end up charging higher than ideal interest rates.I once saw a quick loans place in the UK offering loans while charging 9800% interest (for people with bad credit histories and have either been bankrupt or default on their other loans.Places who offer lower interest rates simply won't accept them as customers)

I once agreed to lend 2 BTC to a borrower with little if any reputation (hint look at the gorgo1 loan threads for an example of what I'm talking about) as I thought that it's such a small amount that I'd be ok not charging interest but any larger than that and I'd have to charge interest. In the end,the guy did pay back (several days early in fact) so its a positive start for him but still people need to be more vigilant to avoid being scammed.

As to the point of interest rates (dubbed 'usuary') they are used to help keep the business afloat (and profit if they already broke even),it's not an ideal way in all circumstances to rely on interest rates but we live in a society where interest rates are just common practice and we all have to do what we can to keep ourselves afloat and have a buffer so that people who default/scam can't hurt the lending businesses too much.Interest rates I think should be kept at reasonable levels if at all possible.

Just my 2 cents :)

Could you please facilitate an interest free 30 day loan of 50 BTC for me ?
thank you.
bitlane.

Another factor to consider it Time Value. 30% MPR might not be all that much money for the work being done on the lenders part. However, 300% APR might be. It depends on the amount that is going to be made for the money.

I.E. A 10 BTC Loan for a week at 15% is about $5 for about an hours worth of work. That seems fair.

And it's not just the interest, it is interest based on trust.


Lets test it: Someone loan me 100 BTC send to: 1G12XfoPSLYiCdCH49qtN6NHMmHPQwPUta

I promise to pay back 101 BTC in less than 12 hours. This is all I am willing to do, no other information. If you trust me, get your 1 BTC profit. If you don't, then don't bother me with your questions and pm's.

http://blockchain.info/tx-index/3925565/0b5b5e607bc88660aadfea59fd57368a229e6b694272aa2ccaaa705886876344

Repay to 147nRtCJTTA1215jYakz7a8tKJvcamdHZ3, thanks :)

I confirm, I have received 100 BTC. Will repay, shortly.


After I repay, I will do another loan request but this time I will only pay 0.5% of 100 BTC.


This should show that it is a two way street on these loans. The borrower has power also.

received 101 BTC :)

Repayed 101 BTC

http://blockchain.info/address/147nRtCJTTA1215jYakz7a8tKJvcamdHZ3

Someone please loan me: 100 BTC for <24hrs, I will repay at 0.5% for a total of 100.5 BTC.

Someone get their $2.50


edit: oh, send to: 1G12XfoPSLYiCdCH49qtN6NHMmHPQwPUta

same as before.

Done: 18CdYqwkLfmDhjvfueZmDpDcjBRLh8BEXr

Confirm, I have received 100 BTC.

If someone really insists on borrowing money at 10000+% interest,
well, people do all kinds of things. But what kind of customers do you
attract with such terms? Scammers who have no intention of paying you
back and therefore could not care less about the interest rate (no
shortage of those), and on the other hand the truly desperate. Even if
you do not care about exploiting them, if 1-10 BTC is a big deal for
someone, how are they supposed to come up with the ludicrous amounts
of interest? (How do you honestly generate money at that rate? Play a
lot of roulette? Lend it to someone else at 10001%?) Either way, it
seems like a shaky business proposition, and it is not how
microfinance is supposed to work.

As for 10000+ btc loans, that is pushing the envelope if we are
talking about microcredits, but the principles of interest-free
lending should still apply, and nobody is claiming they are "have no
steady sorce of income, hand over cash to all comers, no questions
asked, and absorb all losses if/when they occur." It seems we are not
quite there yet, but none will be happier than I when experimental btc
finance like IBB gets to the point where one can fund your 15000 btc
project. Remember, a big part of the bitcoin philosophy was to solve
many of the problems people have with traditional institutions such as
banks, not make things worse.

Sent 100.5 BTC to 18CdYqwkLfmDhjvfueZmDpDcjBRLh8BEXr

http://blockchain.info/address/18CdYqwkLfmDhjvfueZmDpDcjBRLh8BEXr


So the system works. The interest charged is based off of many factors. The better the borrower you are the better the interest rate charged can be.



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No one and nothing is stopping you from lending out your own BTC at a 0% interest rate.

I will offer to take all of your BTC on deposit (no limit) at 0% interest rate.

You cannot tell us what to do.  You are not the boss of us.  Or, are you planning on implementing some sort of system to force us to do what you want to do?


Please tell me which part of the Bitcoin philosophy relates to the making or charging of interest.  I missed that chapter I guess.

I don't recall there being any prescribed Bitcoin philosophy. Bitcoin is a cryptographic/network protocol that has attracted many people of many different minds.

And as to the OP, there is a place for 0% interest loans. But they really aren't loans though, are they? You are helping people out. No business model could do this because of inflation. You might as well just give people the amount of money at the current inflation rate over APR.

Which, btw, I would also do. Instead of me borrowing 100 BTC for the year at 3% inflation: Just send me 0.25 BTC per month to the following address: 1Pskdr7kciDbWwwTfiDvqWZNT6HGb6SPf2 

It will save us both a lot of work. :)

A couple of things.

Stealing is "not cool" either, and if you knew anything about risk/return you might find that several months ago I wasn't making money off these high-interest rate loans.

Second, I would like to defend the good quality people that borrow funds from me at 10%-15% per month.  Most are reliable and good people that I have a good business relationship with.  I do not like you disparaging them and their motives for borrowing.

Third, the service I offer is competitive - there are several others around and rates are negotiable, as are payment terms. 

I have previously donated to IBB and like what Sen is doing.  At the level I typically loan at (not micro) there are high stakes and real money involved.  I give awa enough money elsewhere to not be worried about the high rates I charge, and if all my loans were repaid tomorrow and I didn't do any more, that would be fine.

As much as i dislike spongbobsquarepants.

Patrick is always Owning people with his posts. AKA, You have been served by a starfish sir.

Maybe you need to watch it in a different language/country/time of day.  It's hilarious in Japanese, and helps pass jet-lag hours at 2 a.m. 

I'm willing to do this, but I need to grab four other lenders to split this into blocks, and we require 10% "DPR" (the "D" is for daily!). Either you take the loan, or you're unable to pay for the psych eval. required to retrieve your kids from CPS.

First: WTH are you talking about? I missed the joke obviously.

Second: To late, someone already got it. nanah boo boo.  ;D

To clarify, I am not prescribing anything or telling anyone what to do. If you are lending money as a business, you probably need to cover your costs somehow (that money has to come from somewhere), whether by charging interest or via some alternative arrangement such as profit-sharing. If you are offering loans at 20000% interest and someone accepts, then they brought that upon themselves (or more likely are trying to scam you), but that's just crazy and I have no qualms about calling you a thief. However is 300% acceptable? How about 30%? 3%? I would rather not try to seriously argue this here, or be glib. Perhaps there is no "Bitcoin philosophy", it is just a tool and certainly does not tell you how to set interest rates, but I was suggesting that reducing the cost of transactions should be on people's minds, and there is no reason why things should evolve in the direction of insane loans.

Yes, the cost of transactions.  Interesting you should bring that up.

The cost of setting up a loan varies, but does take time.  I've spent several hours in pre-work on some, and a few minutes on others.  Even valuing my time fairly frugally, it adds quite a lot to what are short duration loans.

For example, if I spend 10 BTC of time on a 50 coin loan for a month, then before accounting for risk, that's 16%, and doesn't cover the back-end or collection.  The loan I did with Cobra took about two hours before we finally agreed terms, and for 200 coins, it's still a decent few percent.  (and if you think the cost of my time is high, yes it is and I would recommend you don't employ me)

The point I think you are missing is that most loans are not for a whole year, so the multi thousand percent numbers you are throwing around are not valid.  My longest loans are current 27 weeks (half a year), and the people paying interest on those know the total cost of finance.  Also, I don't long for long periods where the interest cost would cause a problem for the borrower.  It's bad for business.

Yes, as explained interest is high but for short term loans. As demonstrated, the interest rate is based on many factors including Trust. I rarely lend on the forums. But when I have done so, I feel I have offered really reasonable rates.

Please remember, a 10 BTC loan at 15% or 30% MPR is reasonable considering the time required to service such a short loan.

Again, if you have Trust from the lenders, the interest demanded can be a lot lower. The important thing is to start acquiring trust so that you may lower interest that you have to pay.

If you are just asking for a 'friendship' loan that is another matter and is often done for 0% or cost adjusted rates. But you can't imply that 'letters' in a nick on an internet forum about the bitcoin community raises the standard of association to a 'friendship' status.

While I don't necessarily agree with IBB as a business model, I do agree with their intent. The interchangeable words of 'gratuity' and 'interest' doesn't bother me. I bet they at least keep track of the amount of 'gratuity' that was given for each loan size and from whom.

But their intent is still an important part of the community, as is the more traditional business models.

btw: I think the last loan I gave on the forums was for 3% MPR. Can't remember might have been 1%.

If one wanted to and was willing to take the risks involved, you could displace all other lenders. Or at least, get them to pay you to not issue loans.

I accept 10% interest rates at the moment due to having very few previous transactions within this industry. I also accept this rate as it gives me the chance to get mining hardware online now and have that hardware pay off the loan. Right now whatever hardware I buy tends to pay off the interest and the rest of my farm pays off the hardware. I'm a quarter of the way through paying off my second loan and it looks like this process will continue until the block reward drop after which I'll have to see how mining is affected.

In the end, for me at least, so long as the hardware pays for itself and for power, if I lose 10%/month to expand then I'm fine with that for now.

Hgh interest rates in Bitcoin are mainly due to high credit risk and currency risk. I’m sure they will decrease with time.

Percentages always look huge...

On the other hand consider that you can get a short term loan here basically anonymously with less than two dozen dollars interest in total. You will be able to shop for groceries a few times with that, not much more - but it seems there is a real need here that gets filled.

OOPS, too late.

My main issue is that you came in here and out of nowhere called us thieves for not doing charity work.

If our borrowers are scammers, that's our business and we'll get screwed for it. We're taking big risks here and lose a lot of sleep over whether people are going to default or not. We're not doing it out of the goodness of our hearts, but it is a useful service to people who need to get coins for investing in things. Yochdog recently got 10,000 bitcoins to invest in more mining hardware. That kind of stuff helps everyone. The lender was just sitting on the coins so it was a waste, and Yochdog was willing to administer more mining power and didn't have the up-front funds to buy it, so the loan was beneficial, and will end up increasing overall mining power for the community (thus making transactions more secure). I'm not sure about you, but lending $50k to a stranger on the internet is scary business. Would you do it? If not, what would it take to make you do it? If there is nothing that could make you do it, then we are providing a service that someone with your beliefs is unwilling to provide. If there is something that would make you do it, what is it? $50k is a lot of money to be without, particularly when, even if he does repay you, bitcoins may have meanwhile have crashed to $1 apiece. It's really scary, but that doesn't make it not worth doing.

There are lots of risks involved in lending. I'd even say it's probably one of the riskiest things to do in this community (and that's saying something!). If charging interest goes against your beliefs, then don't do it, but it's a dick move to call us thieves in this kind of situation.

Not lending, but bitcoin related economy stuff, I would like to mention that recently I purchased some shares on GLBSE for 0.41 on 4 April.  I had someone buy them 14 April for 0.50.  So the 25% return is about 75% MPR.  Someone obviously is happy to pay me a decent return.

Are you also philosophically against making a profit on a stock transaction like this one?

Apologies to anyone I may have inadvertently offended. I am not telling you how to run your business, if you want to want to lend out money, at any interest you want, you are free to do so, likewise people are free to borrow from you if they really feel they are getting a good deal. I am sure some of you are providing a useful service, and at least one person in this thread has commented how it was cost-effective for him at 10%/month, at least for small amounts and in the short term. (However I wonder if this was really an optimal deal, especially since the hardware in question cost dollars and not bitcoins, and the interest rate when borrowing dollars is usually nowhere near that.)

Perhaps the same individual would have preferred a loan at 0% instead? Surely you agree this is at least an intriguing concept. It is not the right business model for maximizing short-term profit, but it is one that could benefit a large number of people. To the person who needed 15000 btc, unfortunately IBB is nowhere near being able to fund that at present, but if it proves successful, maybe it will be in the future, who knows?

Of course that individual would have preferred 0%. Heck if it would cost me a mere 2% yearly I would lend several billions from anyone willing to lend that to me in a heartbeat since I would able to easily beat that rate in returns (risk free).

Lending at 0% to someone is the same thing as donating money to people. And I, or the other people in this thread are, or strive to be, mother Theresa. In the end the market will decide the price to be at the equilibrium of the highest that people are willing to pay and the lowest people are willing to accept. This is no sin in any rational ideology.

As far as I understood islamic banking, you don't charge interest but in general will get shares in whatever the lender is doing/earning with the money. The profit from these shares is then "honestly earned" money. Some limits seem to apply, for example it would not be ok for me to borrow money to buy some spare ribs + beer...

Their idea is more or less "Tell us what you want to do with the money, and if it sounds good to us + our morals, we'll give it to you for a share in it". "Traditional" lending, which is most common here in the forums is more like "I don't care what you do with that money - BUT I want more of it back afterwards". Both concepts seem appealing to me, without lots of funds however I don't really see how IBB will really work out in the longer run (also given the fact that there might be some people around who would even feel good about scamming someone who has "islamic" in their name). It seems to me though that they are opposed to another round of collecting investor money... ???

A zero-interest loan is not quite a donation as you are supposed to pay it back :)  Also, while people may be borrowing money for all kinds of projects, the intent behind interest-free lending is not just to leave money in your pocket for a while so you can turn around and lend it to other people at interest, as was pointed out islamic banking does have a moral aspect and you would not get your loan approved if that was your scheme.

Small micro loans are one thing, but what about the person who wanted a large loan to expand his for-profit business? That seems like a situation where it would definitely be appropriate for the bank to get some shares as in a joint venture or profit sharing. Again, the bank presumably is not set up only to provide you with capital unconditionally. senbonzakura's post explains everything quite well.

I do micro lending through Kiva at US25 a pop, and they are syndicated loans to about $2000 (some might be higher), and I receive zero interest on these.  However, there is a small interest rate charged at the local level to help cover costs.  I can choose what type of ventures I put funds into (your moral dimension, if you like), and mostly I target people wanting to expand their businesses - but I'm not getting a share in the business, and there are donations added if you want to.

http://www.kiva.org/lender/patrick7928

How does an islamic bank then cover the costs it has from giving out 0% loans (personel, scams, inflation(!), ...)? Only by accepting tips, cross-financed by the investments in companies or somehow else? It might be an ideologic thing or some kind of charity to give out these loans, but without actual income on that end I guess it would make sense to have only a small percentage of total funds going out as loans...

Currently IBB is valued at 270 BTC in total (1000 shares @0.27) while having a balance sheet that is barely positive. Also you seem to have defaulted on a 39(!) BTC loan, at that time ~ 1/2 of all your money. Do you have some regulations in place now that you will only had out max. x% of your money as loans?

Also I wonder how you determine if shares you invest in on GLBSE (like MergedMining, CheaperInBitcoins...) are halal - or do they not have to be halal?

No, borrowers, at least most consumer level borrowers, cannot tell lenders what to do.

On the other hand.  Banking institutions combined with credit reporting can and does effectively set non negotiable terms with borrowers.

There's a reason ppl get irked by banks and lenders.  The power lies with institutions and cooperation of those institutions to set rates and not the individual borrower.

The BTC loan terms are the way they are due to a consensus of lenders on terms.  The BTC lending market is too small to have any real competition putting downward pressure on interest rates.

Hi Sukrim,  when thinking about IBB, you might also like to think about the Islamic banks that deal in the billions of dollars and not just the small bitcoin amounts that Sen works with.  It's a challenging business, but it still works for financing a $500 million power station or $5 for something else.  (I came across this a few years ago when researching project finance and the inability to charge interest posed some interesting problems for bond issuers).

Also, having a positive balance sheet isn't necessary for business value - check what-ever the latest internet darling is and you might find zero income/loss making businesses valued in the millions.

It is a donation just not a donation of the principle. Owning the funds for a certain amount of time has value and you donated that value if you do not charge interest. I would never lend at zero percent to anyone but my friends.

Hmmm (note not the two "m" version reserved for Sen).

So, I could do zero interest loans, and they are structured like this:
1: Establishment fee 5 BTC (covering credit checks and negotiations)
2: Completion fee 2BTC (covering the costs at the end of the deal - and yes there are some)
3: Default insurance 10 coins per 100 borrowed.

So a one month, 100 coin 0% interest free loan would cost 117 coins.  I would expect howls of anguish and complaint, but for 0% it's not necessarily a bargain.

Bitcoins currently have far more than 20% annual inflation... anything below that is basically a loss. You can argue however that the inflation curve for BTC is known since the beginning + can't change, so this means it can be ignored.

You make profit only because (as most people here) you work for free on that project as a hobby.

Somewhat agree. But with inflation, one must consider attrition (lost coins), and the percentage of BTC actually in use. Potential for use and actual use are different. If the FED Prints an extra Trillion and just lets it sit there, should it be counted ?

Compared to traditional fiat currency, one could make the argument that BitCoin has the highest savings rate. Maybe to much so.

This thread will get some of those dollars flowing and spurt the economy. If someone loses 10% of his BTC holdings but increase Bitcoin usages by 30%, that 10% loss disappears. No one argued against IBB here, they implied others were 'evil' in some way by charging high interest.

This I believe was realized as a false accusation from the OP.

Usury is cool, good and moral:

http://www.theobjectivestandard.com/issues/2007-fall/morality-of-moneylending.asp

The Objective Standard's notion of good and moral isn't necessarily uncontroversial :)

The Objective Standard article illustrates that historically usury was frowned upon by religion, however, was in high demand by everyone, because without it economy doesn't work. This dichotomy is easily resolved when you understand that religion is wrong, and there is no conflict.   In fact, this is very simple to understand: when I lend money, I can not use it for some purpose of my own -- in other words, lending, is a kind of service for those who borrow. For that, they pay a fee. It is only natural for this fee to be a percentage of the sum, since I loose a proportional amount of opportunities when I lend more money out. There really is nothing complicated about it. The article talks about historical perspective, in depth, and I highly recommend reading it.

http://www.project-syndicate.org/commentary/the-challenge-of-islamic-finance

It could that IBB is well positioned to ride the wave of investment in Islamic banking.

Usury is a sin. You would not think so talking to American Christians, but it most certainly is according to Christs teachings. America's evangelicals have a weird "get rich" streak in them. They better hope they are wrong about Jesus. He is the dude who was arrested for protesting against the money changers. And the one who said "it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven."

How can Christianity talk about morals? It is a sin if you believe in God.  But, the Christian God permits to kill (crusades, inquisition). But to learn why Christianity is evil I refer you to any atheist forum, or speaker. Start with George Carlin.

Lets get back to usury. If you read the article I posted, you will learn that historically usury was in high demand by those same Christians, so much that they didn't want to convert Jews to Christianity -- Jews were conveniently allowed morally to lend money to Christians , according to the interpretation of the bible.

True laissez fair economics will be such only if usury is not condemned.

Fair enough. Here is a link for those who want to learn more.
http://www.tentmaker.org/lists/UsuryScriptureList.html

Objective Standard is good stuff.


Though, it is a mistake to think that religious views of usury is negative and by extension lending capital is also viewed as negative.

Untrue.  The spirit of the view is against evil practices such as predatory lending and inequality of access to capital.

As much as we all believe capitalism is a great system as it fulfills objective needs, fundamentals of common religion place any materialistic system second, and bound, to morality.

The more difficult and vicious ( i.e., efficiency has a cost ) it becomes to make a living the more morality goes out the window.

"Usury" is your right. If a man is willing to pay the interest on your loan and he does, I see no issue.

Any question is only one of preference. If a state enforces its preference of cheap loans, then I hope it enjoys its stagnant citizenry with little capital to work off of.

The only "cost" is a lower cost of living. If you hate cheaper homes and cheaper food, then I assume you hate the idea of lower classes living an easier life.

I don't want children.

Humans have evolved past basic mating, my friend.

OK

Rational Self Interest is operating within the rational and reasonable confines of the "Mutualist" principle(s). Anything operating above a sort of Mutualism is an attempt to profit at anothers expense thus is a form of irrationality as it creates or sews the seeds of societal conflict(s). In order words making enough money to cover expenses and a bit at the top for ones own survival is justifiable but to abuse the people's trust and amass an enormous degree of wealth while doing little to no work (not producing anything) is an exercise in Selfishness not Self Interest. Of course these are "moral" and "ethical" claims... and such ideals are subjective but I am quite sure an inter-subjective consensus can be formed and those who do not comply ostracized from participating in social and economical exchanges.

nedbert9: Ayn Rand would argue with you -- capitalism is already moral (not only a convenience that seems to work). It is moral from basic principles.  And those morals go in contrast to the kind of morals that religion preaches.

Um, why are people not borrowing money at 0% and then lending it out to tother people for more?

The amount of money available at 0% doesn't really make that worthwhile, assuming we could even get the loans in the first place :)