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[theboss]

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[dust]

If your deposits are 100% insured by a reserve fund in an offline wallet, why are you paying interest for deposits instead of just using your own funds?

[dust]

If your deposits are 100% insured by a reserve fund in an offline wallet, why are you paying interest for deposits instead of just using your own funds?

Any deposits I take in will be less than what my personal BTC balance is in my offline "reserve" wallet (a substantial amount).
The reserve funds would only be used in case of defaulted loans.
I would still be able to pay out deposits and have my share for my services without touching the reserve fund.

Why not lend directly from your reserve wallet and not have to pay anyone interest? In both cases, you are risking your reserve funds if someone defaults.

[unclescrooge]

So, you have the fund, but you want to loan them and pay 2% weekly for... for what?

[BrightAnarchist]

I feel there is no need to touch my reserve wallet if both me and my depositors can receive interest from lending in the first place.
I realize the risk to my own reserve funds and have no problem with it.

You must have mild OCD just like me, because I've done similar things before

So basically, people are profiting from your irrational psychology, whereby you setup a cold storage wallet and have a strong emotional need to keep it "pristine", yet at the same time want to profit from loaning out the funds.

Of course, ideally you should first prove the account ownership and balance total by signing a message with your private key before taking deposits.

[thirdlight]

you should first prove the account ownership and balance total by signing a message with your private key before taking deposits.

That.

[dust]

Ok, here are some examples:

We will look at two lending cases for each method of lending:
Success: 50BTC 1 Month loan is paid back
Default: 50BTC 1 Month loan is defaulted on

We will assume 2% interest/week (non compounding for simplicity of the math) to depositors and 10% interest for the entire month loan
You take 50BTC in deposits
Let's say your reserve fund is 60BTC

Your Deposit/Lending Offer:

Success case:
You pay your depositors 4BTC/week
You gain 5BTC from the loans interest
The loan is paid back
Your reserve fund is untouched
You have 60BTC (reserve) + 5BTC (revenue) + 50BTC (paid back loan) - 54BTC (owed to depositors)
Your net is 61BTC (1BTC profit)

Default case:
You pay your depositors 4BTC/week
The borrower defaults and you earn no interest
Your need to take 54BTC from your reserve fund to pay depositors
You have 60BTC (reserve) - 54BTC (owed to depositors)
Your net is 6BTC (54BTC loss)

Lending Directly From Reserve:

Success case:
You loan 50BTC from reserve
You gain 5BTC from the loans interest
The loan is paid back
You put 50BTC back into reserve
You have 60BTC (reserve) + 5BTC (revenue)
Your net is 65BTC (5BTC profit)

Default case:
You loan 50BTC from reserve
The borrower defaults and you earn no interest
You have 10BTC (reserve)
Your net is 10BTC (50BTC loss)

In both scenarios, taking deposits costs you 4BTC

So one of the following must be true (in order of most to least likely)
1. You are not insuring deposits 100%
2. You like losing money
3. You are a scammer

[drakahn]

Losing money to become a bigger name in a baby economy is not irrational...


and also this

you should first prove the account ownership and balance total by signing a message with your private key before taking deposits.

You can do it from inside the latest bitcoin-qt client [file] [sign message], the version i've got built right now has verify in the client so that's easy enough to do

I would suggest looking into getting a credit rating from Patrick.

[area]

I would suggest looking into getting a credit rating from Patrick.

[dust]

dust, you are correct, I would be taking little net profit from these services.

As far as me losing money, your examples are me defaulting on every other loan (a highly unlikely situation).

I agree that every borrower defaulting is an unlikely scenario.  I used the cases of no one defaulting and everyone defaulting to illustrate that it costs you money when you take depositors regardless of the outcome of your loans.

[OneEyed]

Loans are not the only things I would be doing with deposited funds.

That doesn't change the equation. If your deposits are 100% insured, then you will never do anything with more than you have in reserve, and will always earn less money and take more risks than if you were using your own funds.

[bitdragon]

Requirements

    Forum Full member or higher
    Identification
    Proof of collateral
    Any other credentials I may need (especially for larger loans)

Do we users get this level of information from you too?

Loans

Rates

    8%-10%

These rates are per week, per month ?

Will you be sending any deposits on to Pirate ?

Thank you

[PatrickHarnett]

I would suggest looking into getting a credit rating from Patrick.

Browsing the threads - I notice this comment and wish to add one of my own.  I have previously loaned 600 coins to TheBoss without problem - it was collateralised, but still a large loan for a new customer.  I have not accessed a credit rating or position for him, nor been approached to add it to WPW.  I'll look at that tomorrow.

[Onichan]

I'll open an account. PM me an address please.

[Micon]

9-10-2012 interest payout's completed

creeping zombie jesus. 

You can't be serious.  Bitcoin Holdings?  (Savings and Loans)  2% /wk

You are expecting the same forum to fall for the same scam huh? 

Actually, you have a fighting chance...

anyway, who did you scam your interest to?

[Bjork]

I don't mean to be "like Micon" but come on...

Who would trust somebody who says they have a wallet in cold storage with 100% of any deposits..

Either this is a very poorly thought out scam, or worse, you actually thought that that would be a good idea.  Either way not somebody who I'd trust my money with.

[Shadow383]

Requirements

    Forum Full member or higher
    Identification
    Proof of collateral
    Any other credentials I may need (especially for larger loans)

Do we users get this level of information from you too?

^did you miss this post? 

[Micon]

I would suggest looking into getting a credit rating from Patrick.

Browsing the threads - I notice this comment and wish to add one of my own.  I have previously loaned 600 coins to TheBoss without problem - it was collateralised, but still a large loan for a new customer.  I have not accessed a credit rating or position for him, nor been approached to add it to WPW.  I'll look at that tomorrow.

no shocker that this scam comes with the PatrickHarnett seal of good loan.

can't wait to see the credit report on this guy...

[Bitcoin Oz]

Requirements

    Forum Full member or higher
    Identification
    Proof of collateral
    Any other credentials I may need (especially for larger loans)

Do we users get this level of information from you too?

^did you miss this post? 

+1

[🏰 TradeFortress 🏰]

I may be willing to deposit, but since loaning is becoming more difficult I will watch for a while.