Bitcoin Forum

Starfish is offering a service for borrowers and lenders based around a personal credit rating.  For borrowers, the cost to obtain a rating is 5BTC.  For lenders, the cost is zero.

To obtain a rating I'll look into the usual stuff I do when assessing a loan.  This will include asking for personal information, and before the anonymity brigade get all up in arms, this is about money so get over it (otherwise it may as well be a donation).

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Over the past year I have had the pleasure to deal with a lot of very good people in the lending section (the majority), and the displeasure of dealing with some scumbags (the minority).  A little while I ago I introduced a rating system for deposit takers to help identify some of the risk/return trade-offs and that is still a work in progress.

I have also been approached (and I also check with) other lenders when asked for a loan.  I have also been asked by some people about an individual "credit rating" system and I've tossed around various ideas for a few weeks.  The piece that I was missing was related to the dual questions of:

Borrower: "why should I get a Starfish rating?" and
Lender: "why should I trust a Starfish rating?"

My answer to that is to back the ratings with cash. 
If I rate someone and they default on a loan, I offer to take over the loan at the percentages given in the table below.  The offer is only good for one-time per rated person, and excludes interest.  That is a sensible thing to do to prevent various games being played.  Also, loans need to be reasonably well documented, because successful loans can be used by borrowers to improve their Starfish rating, and if a lender wishes to cash-in the guarantee, they need to have documentation as well.

1 Starfish	Bad Risk	up to 10BTC paying 50% for first claim
2 Starfish	-	up to 25BTC paying 60% for first claim
3 Starfish	-	up to 100BTC paying 70% for first claim
4 Starfish	-	up to 250BTC paying 80% for first claim
5 Starfish	Trusted	up to 1000BTC paying 90% for first claim

some questions you might be asking
What if someone defaults?
Obviously a defaulted loan gets a special score of zero.

Why should I pay 5BTC to you?  5BTC is a lot!
You don't have to pay.  5BTC helps sort out those serious about getting a loan from those opportunistic people wanting to scam lenders.  Also, it helps cover the insurance default costs, and the cost of running the scheme.

I got a lousy score - you did it wrong/I disagree with you/I want my money back
Tough - this is designed to weed out bad risk people.  If you're paying to get a rating and it comes out bad, you must have something to cause it, and I'll probably tell you why.  I'm backing my own money on this so if you do default, I carry the risk.

User XYZ got a X-Starfish rating - mine is lower, and I'm better than them.  Why/it's not fair
You'll probably never know and fairness is subjective.  The information held on the people being rated will not be disclosed other than their rating.

I've done X-thousand of bitcoin business with you or XYZ, why do I need a credit rating?
You probably don't.  I have customers I'll lend 1000 coins to on the basis of past performance and recommendations from people that have extended large loans as well.

Lender XYZ is demanding I get a credit rating, but I don't have 5BTC and it's unfair.
Look for another lender, one prepared to take on a different level of risk.  This isn't a compulsory scheme, just one that is available.

Lender XYZ makes terrible loans - won't that drive you out of business?
I'm covering my ass by doing due diligence on the borrower first.

Reserved for published ratings.

https://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.png

BurtW
Cablepair (added 28-Aug-2012)
Gigavps
wachtwoord



https://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.png

Immuzikation  (added 24-Aug-2012)
Slider1978



https://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.png




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https://i.imgur.com/iBQQr.png

I like this idea behind this. How does one become a lender?

Interesting.  IFL.

Do you plan on rescoring borrowers after a certain period?

Yes - as information comes to hand.  It's not a static exercise.  Plus, it would be in the borrower's interest to get an improved score over time as that should lower their borrowing cost.

You should rate those ppl on who pays what thread

I figured as much, but it was worth checking. :)
This shows promise and would be a valuable service to the community; I hope it goes well.

+1, I vote a sticky for this, wheres maged?

Why wouldn't I trust my personal data with a starfish?  :P

Just kidding, nice idea. I hope you don't get shakaru'd.

The starfish already has my personal data on file somewhere, as I've done a loan through him in the past

I would do it, not necessarily because I'm asking for "loans", but I am basically receiving "loans" each time someone buys my coins (since they are basically giving me the coins they will be receiving back in the mail).

Yes I do.  (and a successful loan it was too)


I'll add the info to my dirt collection (under the rock) - the object of the exercise, like the WPW thread is to keep data confidential.  For example, today I have done a preliminary rating for someone, very interesting, but it's not public.

As for being shakaru'd, I hope not, but I expect to suffer a couple of painful losses in the course of setting this up.

This is a great idea 8)

I would love to get myself rated, though have little need to at the moment so spending 5 BTC would be frivolous.

This will undoubtedly take some time to set up and is not without risk, so thanks Patrick.

A copy of your real credit score... free and more valuable to a potential lender if you are actually a good credit risk.

While you might be right, there's a certain attraction to us being self regulating.

Fkn wrd.  Kind like Luxembourg.

I have no particular use for a credit score - I assume you're talking something USA based.  That doesn't help in the framework that is essentially non-recourse loans.

Also, people that have established borrowing reputations are unlikely to need to obtain a score unless they are looking to do something different.  Using ScottJ as an example, our arrangement is working fine and I wouldn't expect him to need to spend 5 coins to get a rating.  If he went to Kluge for a loan, he'd cite me as a reference.

If a personal credit score isn't considered, potential customers might conclude they have no particular use for the rating service you are offering.  There is a strong correlation between one's credit score and their ability and willingness to repay loans.

Thanks for the comment - it's useful to consider different points of view.

If someone was offering that as support for their credit worthiness, then that would probably help some people.  However, credit scores are not universal (for instance, I don't have one) and in a recourse/contractual sense, people are more likely to pay in real life when there are consequences versus bitcoin land where most scams go unpunished. 

not if they got a back stabbing exwife who F**ked up their credit score just to be a spiteful B**CH >:(

How does one go about doing that?

At first I thought it wasn't wise to have the lowest "insurance" be 50%, but then I realized what you did there, you clever asteroidea. 50% of 10BTC is 5 BTC, the price of the rating ;)
Nice work :)

this is great.

how does one go about finding out their own personal credit score?

If you're lending, you just ask him. If you're borrowing, it'll cost you 5 BTC

How do we verify someone's rating apart from a PM to Patrick?

Maybe a pgp signed star fish certification, with a well known public key. Or Patrick publishes all ratings, but I am sure not everyone rated would want that in public.

That's what the reserved post #2 is for.  I was going to add some of the most reputable borrowers to give an idea, and then got distracted working out how to insert a small starfish image - I'll be working on it today.

So that's what "reserved" means. I have been trying to figure that out for the longest time. At first I thought it had to do with GLBSE for some reason.

I just noticed this today for the first time while reading a thread.... Great idea man......:)

I think this is a great start. I think over time several of these will merge into a bitcoin Transunion type rating. This will become much more important as we see more BTC revolving accounts.

As someone who is considering being a lender, this is fantastic... I have wanted to do loans, but the risk was always higher than the reward for me, this will help leveling the playing field...

Great idea..

It is buried in another thread, but the only person who approached me about a rating backed out.  Why, because I asked for the same information I would of any other loan I might undertake including a photo ID.  They didn't trust me enough to provide it.  Result, zero Starfish because I'm not about to provide funds to someone if they can not even front up with something simple like that.

Maybe something like this?
https://i.imgur.com/osxqG.pnghttps://i.imgur.com/osxqG.pnghttps://i.imgur.com/osxqG.pnghttps://i.imgur.com/osxqG.pnghttps://i.imgur.com/osxqG.png (0)
https://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.pnghttps://i.imgur.com/osxqG.pnghttps://i.imgur.com/osxqG.png (3)
https://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.pnghttps://i.imgur.com/gaDZc.png (5)
or...
https://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.pnghttps://i.imgur.com/iBQQr.png
 :P

I was looking at the image insert last week - didn't quite get it the way I wanted - thanks for supplying some code :)

You're welcome :)

Offtopic: you can also supply width and/or height:
https://bitcointalk.org/index.php?action=dlattach;attach=7730;type=avatar

Given the inspiration from Nimda, I've put a couple of sample names/ratings into post#2.

and here's 0 :)
https://i.imgur.com/kesSE.jpghttps://i.imgur.com/kesSE.jpghttps://i.imgur.com/kesSE.jpghttps://i.imgur.com/kesSE.jpghttps://i.imgur.com/kesSE.jpg

What are the criteria for the different credit ratings? And what is the info you will be needing?

 A rough and quite arbitrary/subjective guide:

How do you get a five starfish rating like Giga?  Borrow multiple thousands several times and repay on time/in full/no fuss.

How to get a four-Starfish rating like Slider1978?  He has completed two loans ( a few hundred coins each) running more than half a year.  Good communication, prompt payments.  Extremely solid track record.

A three-starfish rating would require a decent OTC or referral from one of the other regular lenders.  i.e. a track record.  Strangely enough, I've done quite a few transactions with Bitlane (even if he is mad as batshit sometimes - see zero starfish below), but he's been reliable in my trading with him.

A two starfish rating would require a decent amount of ID, plus something that you have that is at risk like your online reputation.  Particularly useful for people like forum staff, those that have bitcoin businesses or a ton of posts about sensible things.  You might have completed a small trade/loan with someone else.

A one-starfish rating means worth risking a small loan, but not established.

How to get a zero-rating? Complain about having to provide any information and that Bitcoin should be anonymous - forget it.  Previous default, dodgy dealings, or just being a pain in the ass generally.

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Copied from a message I prepared for someone last week:

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Ok, the usual stuff is for you to email me some information - better if it's from a work email or a non-free account, but I understand people have gmail accounts - send to <email>  (and yes, this stuff is confidential, and what I would ask for doing a loan)

Date of birth, phone, address, photo ID showing address and/or DOB is good (might be more than one doc).  A passport can be handy.
Do you have a job and who?  (Basically, that's evidence to help identify you with an address and a person.)

Online presence - personally I don't use facebook, but many do.  What other online communities would verify/vouch for you.

Trading? On the forum, OTC-web of trust?  What are you putting at risk if you fail to repay a loan?
(i.e. some people have invested years building reputation and pulling a simple scam for a few coins wouldn't be worth it)

Repayment ability - how are you going to manage this?  Do you mine, have some sort of fancy trading strategy, or simply going to put money from day-job into coins to cover things.  Can you provide collateral?

Essentially, the more you can prove you are real and honest, the better.  Some people on the forum don't understand that, and some ID elements can be faked. 

Do I get a special rate if I let you into the SaltySpitoon? You did get in a fight after all, even if you did lose. But you are a world champion kickboxer, so I guess its alright.

On a more serious note, is there any way to get a star fish rating without personal ID and stuff? I know you say that its money, so anonymity doesn't matter, but what if you have forced anonymity?

With no ID you would be pretty limited in the credit anyone could/should extend - also it limits the ability to recover funds.  Essentially you're asking people to send funds to a random address and hoping it will come back.  If you had a decent reputation for trading elsewhere, people might extend greater trust. 

I have done many loans without full ID verification, but used other assessments.  However, for the Starfish ratings where I'm taking on a contingent liability, that's different and requires a higher level of proof, and hence ID is important.

How's my credit rating ?

I am currently looking for a 2500 BTC loan. You know how it is....I have something coming in to cover it.

Will you reduce giga and burtw 5-starfish rating when their pass-throughs default?

Patrick,

I believe it would be beneficial to order the lists in alphabetical order. When many will have used Starfish Personal Credit Ratings, it will be hard to find a user.

Within categories or as a whole list.  I would imagine someone quoting a rating would provide a direct link, and <ctrl-f> is heavily used in my browser so I didn't consider it a big issue.  However, I will update when I add the next person.

Pass-throughs are normally uninsured and at depositors own risk.  Burt and Giga are not running big pass-throughs like Payb.tc

Hey Patrick, how's Trendon's Credit Rating doing ?

Do you need more info to get everything calculated ?

He hasn't asked for one. 

I would say, try the bitcoin-otc system, but as it were it's a JOKE as well.

pirateat40 HAD a rating from 08-23-2012 from a user that has SINCE DISAPPEARED.
http://bitcoin-otc.com/viewratingdetail.php?nick=pirateat40

Gotta love it.

haha

yes, I'm going to be changing that