Bitcoin Forum

https://bitcointalk.org/index.php?topic=81542.0 (https://bitcointalk.org/index.php?topic=81542.0) using Patrick's "who pays what" thread would it be a good idea to setup a glbse asset that invested in  this sector of the bitcoin  market ?

In particular,it would invest across all the "deposit takers" as a way to spread the risk that something happens to one lender. As lenders graduated from "new lenders" to established they would be added to the fund.

Discuss.

there are several versions of this idea floating around - I really need to take a week off work (from my day job) and spend some time on this area and update some of the credit rating stuff and add in the "funds" that are operating.  I think next week might work as I should be past my current projects.

A proposal I've submitted is to have depositors pay a relatively insignificant fee if the lender is in a "trusted circle." In return, another lender (or group of lenders) co-sign the deposit.

For instance, if someone had a 1kBTC deposit in my program, they could pay .2% of principal per month to have Patrick co-sign. I would be willing to co-sign loans ("deposits") to Patrick at a rate of .1% principal per month.

We do not necessarily need to exchange BTC each time one of these co-signs happen, but we should keep a type of unified book showing who owes what to who, and only pay out insurance debts each month. This eliminates a lot of the hassle if, for example, I co-sign 10 of Patrick's deposits, and he co-signs 10 of mine. If they're roughly the same total value, we wouldn't have to pay anything to each other.


The evolution path is obvious. The lending cartel can form an insurance agency similar to the NCUA/FDIC, with insurance fees going directly to a wallet with multi-sig implemented (something similar could also be implemented). In event of a bank failure, each lender of the cartel must approve to pay out depositors of a failed deposit-taker. Fees would not be equal for everyone, but based on credit ratings assigned by various lenders. The average would be submitted, agreed-upon by other lenders in the lending insurance cartel, passed on to the deposit-taker seeking insurance, and then they have the option of accepting or rejecting. The deposit-taker could then either charge depositors the fee, or include it for everyone and pay fees himself.


Thus, there is no need for a fund or additional hassle for depositors, depositors will be insured at a minimal but subjective rate, and hassle for deposit-takers will be minimal.