Bitcoin Pawn Shop

[TECSHARE]

Would anyone have interest in collateralized loans of Bitcoins backed by valuable goods? Any feedback would be appreciated.

[JMAHH]

Sounds good, but I'm concerned about the logistics. How would the collateral in question be safeguarded?

[TECSHARE]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

[JMAHH]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

[TECSHARE]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

That's the idea.

[JMAHH]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

That's the idea.

Unless this is a purely local effort, on a larger scale, things will get more complicated.
- I can't send you big objects since it is likely shipping costs will be outsized. That means you should set an explicit limit to object size.
- How are the shipping costs handled?
- How is the value of the object in question determined? (You won't accept a toothpick for a 1000BTC loan, but what will you accept?)

Just a few points, to brainstorm

[fabrizziop]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

That's the idea.

Unless this is a purely local effort, on a larger scale, things will get more complicated.
- I can't send you big objects since it is likely shipping costs will be outsized. That means you should set an explicit limit to object size.
- How are the shipping costs handled?
- How is the value of the object in question determined? (You won't accept a toothpick for a 1000BTC loan, but what will you accept?)

Just a few points, to brainstorm

You can use virtual items as collateral, such as TF2 items, WoW, DOTA 2, D3, etc. No shipping and cost of items is widely known.

[JMAHH]

You can use virtual items as collateral, such as TF2 items, WoW, DOTA 2, D3, etc. No shipping and cost of items is widely known.

Ah, very smart! Sounds great.

[edit] and no need for vaults and shotguns then

[TECSHARE]

Well in my case I probably wouldn't be doing anything so large it would become a target worth going after, but as far as security, the actual storage site would not be revealed and I am armed. I could also probably find a safe. I would be the only one with access to any of the items.

So you would do the loaning, and I would give you an object in collateral. Correct?

That's the idea.

Unless this is a purely local effort, on a larger scale, things will get more complicated.
- I can't send you big objects since it is likely shipping costs will be outsized. That means you should set an explicit limit to object size.
- How are the shipping costs handled?
- How is the value of the object in question determined? (You won't accept a toothpick for a 1000BTC loan, but what will you accept?)

Just a few points, to brainstorm

You can use virtual items as collateral, such as TF2 items, WoW, DOTA 2, D3, etc. No shipping and cost of items is widely known.

I may or may not be willing to do this, really depends on price stability as well as resale market. I would certainly consider it tho. I suppose if it was priced correctly anything is possible. Obviously shipping costs would prohibit larger or heavier items, but there are still plenty of inexpensively shipped goods that would work. As far as what is acceptable and its value, just like any real life pawn shop you never know until you ask. What might be worth 1 BTC to me might be worth 3 to some one else. As the issuer of the loan I would have to consider the possibility of non-repayment and resale value of the item and price the loan and fee accordingly on a case by case basis.

[tgmarks]

virtual objects for collateral.  It's an interesting idea, I give you guys props for working on thinking outside the box.

[Monkey1]

Nice idea.  What sort of rates are you going to offer on virtual goods?  You are surely not going to know what the value of all goods from all games etc are?

[TECSHARE]

Nice idea.  What sort of rates are you going to offer on virtual goods?  You are surely not going to know what the value of all goods from all games etc are?

That is very true, but I do have google, and I know a whole lot of gamers.

[JMAHH]

My only problem is...

Why, as a debtor, should I go through the 'hassle' of sending you collateral if there are others that loan out without collateral?

(Because you would offer larger loans?)

On the other hand, you'll definitely be bugged less by scammers 

[TECSHARE]

My only problem is...

Why, as a debtor, should I go through the 'hassle' of sending you collateral if there are others that loan out without collateral?

(Because you would offer larger loans?)

On the other hand, you'll definitely be bugged less by scammers 

A few reasons actually:
1) You are more likely to be approved
2) Zero identification requirements (less hassle and more anonymity)
3) Because my fraud rate will be lower I can offer larger loans at more inexpensive rates
4) Often people need Bitcoin loans in times of scarce Bitcoin liquidity, and in those times you will be less likely to get a non-collateralized loan.

[Bitcoin Oz]

 Loaning out fiat for holding onto bitcoins is good. Virtual items for bitcooin loans is pretty neat.

[Stephen Gornick]

Would anyone have interest in collateralized loans of Bitcoins backed by valuable goods? Any feedback would be appreciated.

Forget the "loans" concept, how about simply helping people convert their unneeded stuff to bitcoins.  

eBay has a list of privately run "Drop Centers" that will take your items and list them on eBay, take a commission, and then send the proceeds to the party that dropped them off.

Like a consignment shop.

The problems for that are shipping costs (sending to the drop center, then the drop center shipping to the auction winner), regulatory costs (pawn shops / consignment shops / drop centers have restrictions to prevent selling stolen property), and basic economics ... after all the hassle, is your old but still working blender going to get you even a satoshi after going through all this?

But there probably is an opportunity for an existing consignment shop that has a reputation for being fair (and who only accepts items that have a chance of being successful at auction or direct sale), to add payout in Bitcoin and increase their inventory as a result.  

From another thread:

However, there are many who would not normally visit a pawn shop but would if only they know the proceeds would be provided in bitcoins.  The advantage to the pawn shop operator is an increase to inventory of more valuable items.   They don't need many boom boxes but jewelry or a nice commercial electric drill and now the operator might become interested.

Incidentally, I did speak to a couple of pawn shop operators.  Until they have customers coming in asking if items can be pawned in exchange for bitcoins, they generally will be less than enthusiastic.  But just like how the UK Copy Writer learned that being the first supplier in the industry to accept bitcoins gives an advantage over the competition ( http://www.ukcopy.co.uk/blog/2011/11/the-amazing-power-of-bitcoin ), the first pawn shop to do this will likely find it to be worth the effort.

[legolouman]

I like the idea of this. In this thread https://bitcointalk.org/index.php?topic=106465.0 some GLBSE shares were offered as collateral. The idea of collateral is a good way to allow larger loans on newer members.

[ErnestoJuarell]

Do you have Battletoads?

[Monkey1]

Ok then, give me an idea of conversion rates.  WOW gold, EVE ISK etc!

[TECSHARE]

Ok then, give me an idea of conversion rates.  WOW gold, EVE ISK etc!

PM me a list of what you have