Bitcoin Forum
November 22, 2017, 10:57:02 PM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: A clarification question  (Read 483 times)
lclclc223
Full Member
***
Offline Offline

Activity: 189


View Profile
April 07, 2016, 10:50:10 PM
 #1

I've been reading around the forum and I am slightly confused about the concept of collateral. If A takes a loan from B but B requires collateral in all coins, then isn't that the same as A trading B for altcoins? If A has a sufficient value of collateral in altcoins, why not use Shapeshift or a similar service?
1511391422
Hero Member
*
Offline Offline

Posts: 1511391422

View Profile Personal Message (Offline)

Ignore
1511391422
Reply with quote  #2

1511391422
Report to moderator
1511391422
Hero Member
*
Offline Offline

Posts: 1511391422

View Profile Personal Message (Offline)

Ignore
1511391422
Reply with quote  #2

1511391422
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1511391422
Hero Member
*
Offline Offline

Posts: 1511391422

View Profile Personal Message (Offline)

Ignore
1511391422
Reply with quote  #2

1511391422
Report to moderator
ElMoIsEviL
Full Member
***
Offline Offline

Activity: 182

★YoBit.Net★ 350+ Coins Exchange & Dice


View Profile
April 07, 2016, 10:55:10 PM
 #2

Because some not everyone like to sell them but get them back for later so you can put altcoins in collateral and get them back once you repaid the loan

DarkStar_
Hero Member
*****
Online Online

Activity: 798


JOLYY - The future of beauty!


View Profile WWW
April 07, 2016, 11:01:26 PM
 #3

Lets say I have 5 litecoin, but I expect the price to double or even triple soon, but I need bitcoin right now. I don't want to shapeshift it, since it might double before I get enough to buy litecoin again causing me to lose a bunch of money. The point of giving altcoin as collateral instead of selling it is that you hope that the price will go up soon, so you don't want to sell it. Shapeshift would be easier, but if you have 120% in litecoin/other good altcoin, it should be extremely easy to get a loan here, as most lenders would be happy for those kinds of extremely low risk loans.

            ███           ▄▄▄████████▄▄▄           ███       ▀███          ▀██▄ ▄██▀          ███▀
            ███         ▄████▀▀    ▀▀████▄         ███         ███          ▀█████           ███
            ███       ▄███▀            ▀███▄       ███          ▀██▄         ▄███▄         ▄██▀
            ███      ███▀                ▀███      ███            ███       ███▀███       ███
            ███     ███▀                  ▀███     ███             ▀██▄   ▄██▀   ▀██▄   ▄██▀
            ███     ███                    ███     ███               ███▄██▀       ▀██▄██▀
            ███     ███                    ███     ███                ▀███▀         ▀███▀
            ███     ███                    ███     ███                 ███           ███
            ███     ███▄                  ▄███     ███                 ███           ███
            ███      ███▄                ▄███      ███                 ███           ███
           ███▀       ▀███▄            ▄███▀       ▀███                ███           ███
██▄▄▄  ▄▄▄███▀          ▀████▄▄    ▄▄████▀          ▀███▄▄▄  ▄▄▄██     ███           ███
▀▀████████▀▀              ▀▀▀████████▀▀▀              ▀▀████████▀▀     ███           ███
........T H E   F U T U R E.................
......................o f   B E A U T Y
........


 ▀█▄             ▄▄▄▄▄▄
   ▀█▄      ▄▄███▀▀▀▀
    ▄██     ▀▀▀     ▄▄▄▄
 ▄▄▄ ██         ▄     ▀▀██▄
▀█▀█▀█▀▄       █▄     ▄██▀
               ▀████████
               ▀ ▀ ▀ ▀ ▀


      ▄▄
     ▀█▀▀▀

    █▄
     ███████▀▀▀
    █▄
      ▀▀▀▀▀
KenR
Hero Member
*****
Offline Offline

Activity: 910


「きみはこれ&#


View Profile
April 07, 2016, 11:58:09 PM
 #4

Because ,the collateral is just there for safety.The "B",lender in your case is simply not interested in the trade or the collateral.The collateral in such cases are always kept in an escrow.Moreover, "A" if keeps 120% of the amount as collateral,he would never dump them by defaulting the loan.

  ████
█ ████
█ ████
█ ████
█ ████ █
█ ████ █
█ ████ █
█ ████ █
█ ████ █
  ████ █
  ████ █
  ████ █
  ████
  ████
█ ████
█ ████
█ ████
█ ████ █
█ ████ █
█ ████ █
█ ████ █
█ ████ █
  ████ █
  ████ █
  ████ █
  ████
  .WEBSITE.
▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄
  .ANN THREAD.
.
▄▄▄▄▄▄▄▄
  ████
█ ████
█ ████
█ ████
█ ████ █
█ ████ █
█ ████ █
█ ████ █
█ ████ █
  ████ █
  ████ █
  ████ █
  ████
ricardobs
Hero Member
*****
Offline Offline

Activity: 603


Get free tokens @BountyPortals goo.gl/yAe168


View Profile
April 08, 2016, 07:28:43 AM
 #5

I've been reading around the forum and I am slightly confused about the concept of collateral. If A takes a loan from B but B requires collateral in all coins, then isn't that the same as A trading B for altcoins? If A has a sufficient value of collateral in altcoins, why not use Shapeshift or a similar service?
Suppose you have some dogecoins and you think its price will rise very soon and hence you dont want to sell them at cheaper price and at the sme time you need some BTC , in such cases what you do is take a loan by giving dogecoins as collateral.

Coinroll - Bitcoin Dice

[R9jMseudEduY34Wb9]
lixer
Hero Member
*****
Offline Offline

Activity: 630



View Profile
April 09, 2016, 03:09:06 PM
 #6

I've been reading around the forum and I am slightly confused about the concept of collateral. If A takes a loan from B but B requires collateral in all coins, then isn't that the same as A trading B for altcoins? If A has a sufficient value of collateral in altcoins, why not use Shapeshift or a similar service?
Because basically A believes that the price of altcoin is more than the loan and he does not have to sell it actually. Like you have a watch and it costs over 10k but when you sell, u get around 4k , for you its worth 10k .. getting my point ?

lclclc223
Full Member
***
Offline Offline

Activity: 189


View Profile
April 09, 2016, 06:43:32 PM
 #7

So you would want to use coins whose value you expect to increase
yenxz
Sr. Member
****
Offline Offline

Activity: 294



View Profile
April 09, 2016, 09:24:21 PM
 #8

I've been reading around the forum and I am slightly confused about the concept of collateral. If A takes a loan from B but B requires collateral in all coins, then isn't that the same as A trading B for altcoins? If A has a sufficient value of collateral in altcoins, why not use Shapeshift or a similar service?
that simple example is good,collateral is something that will taken by lender if people loan soemthing and can't pay it back. and by the way talk about shape shift,they already got serious problem,someone already post on bitcoin disscusion section.
Amph
Legendary
*
Offline Offline

Activity: 1694



View Profile
April 10, 2016, 05:59:52 AM
 #9

another reason is because maybe he need bot, the collateral and the loan, but since he does not have the right collateral for asking for double the value of the collateral he ask for half and use the collateral also, for when he is in trouble

then he regain the collateral and pay back everything
gkv9
Legendary
*
Offline Offline

Activity: 1218


!!! RiSe aBovE ThE StoRm !!!


View Profile
April 10, 2016, 06:24:39 AM
 #10

Collateral asked is above the amount that one borrows, and it's just because you need to prove that you are actually going to pay back, else how can someone trust you???
So, they ask you for coins, but they won't trade it or sell it unless you repay or default...
Both situations will have different effects...

Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!