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I registered back in January 2014 after getting sick of the banks in the UK giving close to nothing by way of interest on my savings. As with every diversified investment portfolio, I didn't dump all my savings into Bitcoin, but I do have what I consider a sizeable chunk of cash invested now (10 BTC at the present time).
In the early days I had relative success, but Bitcoin being so far detached from real currency, I paid little attention to the amount I was investing in one borrower, this was fine for most of January but one borrower did default on a 0.2 BTC loan (0.2 - nothing really?! Well yes, actually, it was £100 back then!!) In this instance, the user claimed their ID had been stolen by way of a Gmail compromise - their identity documents left in their "sent" folder from a previous credit application, and allegedly used to sign up to BTCJam and take out a loan. Whether or not this was true is largely irrelevant as BTCJam could only verify the data they were sent, and as that was (again allegedly) a full set of identity documents, for all intents and purposes they were dealing with the genuine article.
After this episode, I became a bit more cautious with my Bitcoins, scrutinising lenders motives more and lending less to single lenders - this paid off and I had a full month with no issues (pitfall number 1: I can't tell you how much I made as there is no transaction history...yet - we are promised this is coming soon).
Then came March (or "Black March" as I like to call it). In this month, I (and many others) fell victim to a number of defaulters, with varying levels of creativity in their stories;
- One borrower just decided he wouldn't bother repaying, and stuck around long enough to taunt his investors about the fact
- Four borrowers took the coins and ran with no word at all
- One borrower claimed they had lost their Bitcoin wallet to a hardware failure on a hosting platform - we eagerly await the outcome of that one
- One borrower had issues with paying back the loan, but is still in contact with the investors so I'm not writing this one off yet
- One borrower, who had worked hard on their reputation, and was highly respected in the community, came up with a story about how his email, Facebook and crucially BTCJam account had been compromised, spurious loans posted, and the proceeds taken without his knowledge. Again, this could have been true (I think he was a grade-A scammer) but this is where BTCJam COULD have done something - at the time, they didn't have two factor authentication. Had they had this, then the story would have been less plausible.
- One borrower got in over their heads and are currently working out how to sort that one out with their investors
So all in all, not a great month - I personally lost 3 BTC in the above scams - the most infuriating one is of the "reputable borrower" who took off with over 10 BTC of other peoples money - I believe this could have been avoided if 2FA had been in place at the time (2FA is available now so hopefully this will never happen again)
I was at the point where I was going to let all my loans mature then pull them out of BTCJam, but few things have changed (including my risk appetite) which make me think it might be worth sticking around a bit longer. It was a total gamble putting so much of my cash into Bitcoin in the first place, I thought I might as well make it worth my while.
April is looking much better, there are a tighter group of investors and borrowers thanks to the Facebook group ReliableGar mentioned above, and we all look out for each other.
I expect to make back my losses over the course of this month, with careful investment at the forefront, and an army of people and some great tools at our disposal, it is a much safer place to invest than it was 3 months ago. We also have access to a fantastic tool written by one of the Facebook users (http://jam.sd.ai) which gives a wealth of information on borrowers and investors to help people make more informed decisions.
I'm well known by BTCJam for being vocal about what they could do to improve things, the good thing is they do listen, 2FA being a good example, just a shame it cost investors so much before they got there.
Credit where its due though, Alexis and Flavio are working hard to make BTCJam work, and the Facebook group are spurring them on regularly. If you fancy dropping by, just search for "Investors of BTCJam.com" on Facebook and we'll welcome you with open arms.
