BTCjam - Any Thoughts or Experiances

[jonald_fyookball]

it seems that they are TRYING to run an honest service.
However, by its very nature, its a scammer magnet.

disclaimer: That's just my personal opinion as I've never used the site.

[impresionesmline]

They could offer a good alternative to protect the "investors" but they do not want to do it.

[minerbobbert]

I wrote this up on another thread after being accused of being a scammer, I guess I could share it here:

I have previously used Prosper.com, and they had a better system, in my opinion. They actually posted data from the credit report (such as total debt, monthly payments, delinquencies, etc) as well as the verified income so lenders could do their own risk assessment rather than relying on a system which gives points for linking an eBay account or managing to game the system by continually getting larger and larger loans in a sort of reverse-Ponzi scheme. It also fails by letting the debtor set the terms of the loan - a better auction system would be to let the lenders specify what interest rate they are comfortable with and then offering a loan at those terms to the borrower that they can choose to accept or reject. There is also no flexibility in the terms. The longest term they have is one year, which makes the whole thing run more like a payday lending outfit than an alternate to traditional banking. I have some other cards I would take out smaller loans for (in order to build up credit on BTCJam) if it meant I could end up getting a sufficient loan to pay off some of my larger debts - but all of those would be prohibitively expensive to try and pay off within one year, so there is no point. But extended terms would make that possible - I could even end up financing a car or something through it. I have over six figures in student debt (med school is pricey!), and I'd love to pay that to a bitcoin investor over 20 years rather than the federal government. Right now, that isn't possible.

I think BTCJam or peer to peer lending in general with bitcoin has huge potential, but it just isn't there yet.

[PerrythePlatypus]

I personally think that BTCjam have a huge potential to become a good p2p lending platform. I have invested some bitcoins in the borrowers at BTCjam and made quite some money. Look at this blog post: http://blog.btcjam.com/post/75934926878/the-3-rules-of-peer-to-peer-lending-for-investors

[fulanomengano]

I've been playing around with BTCJam for the last couple of months. I have about a 10% default rate, but the loans are around 30% so I am netting 20% for the time being.

I really like the idea of p-2-p lending (ala prosper.com), but I am just too worried that the BTC will vanish the instant I put some real numbers into the account. My gut tells me these BTCJam guys are legit, however.

You really think you are getting a 20% return!?!?! If you say you are getting 30% per loan and you have a 10% default rate and then do 30-10 = 20, then you are dumber than a 4th grader, since even my 4th grade son knows that's not how you calculate it. Following your logic, if you have a 30% default rate, you will be even. Well ... nope.

Let's look at an example.

For simplicity (it seems that you will need that) let's say you make 10 loans of $100 each, at 30%. Three of your loans (30%) will default, and the other 7 will pay back $130 each. You invested $1,000 and you got back $910 (7 x $130). That's a 9% loss. Welcome to the wonderful world of financial math.

FM

[Bransonbig]

Thought I'd post my own BTCJam experiences here - hopefully a balanced view of what BTCJam has meant for me.

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.

I share your thought on start ups from 3rd world. It's such great idea. I will check you on Facebook.

[Blazed]

I at one point was thinking about lending a couple BTC on the website, but everyone I have asked said you will most likely loose coins... not worth risk.

[gondel]

I LOVE BTCJam. Excellent source of coins without having to mine

To the OP:  See the account above?  See the big red SCAMMER tag?

That's exactly what you're going to find at btcjam...and they're not as easily identified.

Hi really not sure why, but the really big sign SCAMMER is gone and it is written by a newbie already :/
Not sure how this happened
BR

[monbux]

I LOVE BTCJam. Excellent source of coins without having to mine

To the OP:  See the account above?  See the big red SCAMMER tag?

That's exactly what you're going to find at btcjam...and they're not as easily identified.

Hi really not sure why, but the really big sign SCAMMER is gone and it is written by a newbie already :/
Not sure how this happened
BR

Read the post here, https://bitcointalk.org/index.php?topic=603586.0
theymos posts about removing "legacy scammer tags" View the discussion there as well.

[gondel]

I LOVE BTCJam. Excellent source of coins without having to mine

To the OP:  See the account above?  See the big red SCAMMER tag?

That's exactly what you're going to find at btcjam...and they're not as easily identified.

Hi really not sure why, but the really big sign SCAMMER is gone and it is written by a newbie already :/
Not sure how this happened
BR

Read the post here, https://bitcointalk.org/index.php?topic=603586.0
theymos posts about removing "legacy scammer tags" View the discussion there as well.

I saw the threat, but not sure why some people who are big scammers are still here and still saying things that are not appropiate at all. I am living in Bulgaria and everything here is like scam and the government is still leaving people who are scammers do their old scam stuff...i am just tired of this! It is European election day here today and the biggest scammers will join the government..too sad!

[Pobre]

My friend invested in BTCjam and what he got was SCAM SCAM SCAM..... maybe he wasnt lucky enough to catch a legit borrower.... Can you do anything if the borrower doesnt pay you back? I guess NO

[dyask]

My friend invested in BTCjam and what he got was SCAM SCAM SCAM..... maybe he wasnt lucky enough to catch a legit borrower.... Can you do anything if the borrower doesnt pay you back? I guess NO

After just looking at the site I have to say it is very scary for investors.   First they don't make the linked loan thing clear and when you know about it you can't even search for loans that are just BTC.   Then when you do find a BTC only loan the interest rates tend to be very low.    This is really geared for people that are only used BTC short-term.  Basically it seems deceptive.  

[cooldgamer]

The place is a massive haven for scammers.  I also don't think they're the most honest company after saying on Reddit earlier this week that they had ~90% repayment rate.  Pretty easy to see that it's waaay below that.  I'd bet it's at least below 80% and that's being nice

[dyask]

The place is a massive haven for scammers.  I also don't think they're the most honest company after saying on Reddit earlier this week that they had ~90% repayment rate.  Pretty easy to see that it's waaay below that.  I'd bet it's at least below 80% and that's being nice

Well I found the site *VERY* misleading.   If you aren't extremely careful you can lose BTC even with a good loan because of the linked loan concept.  Really I bet there are a ton of loans where people expect BTC to go up, so they just borrow what they can to pay back less BTC as the value of BTC increases.   They push the "Make more bitcoins" angle hard, but they don't brother to explain it for investors.   So as an investor you not only have the risk of a bad load but the risk that the market moves against you.  

[chssater]

The scammers and dishonest people are a minority within our community, that are decreasing day by day. When a borrower activates his/her loan, they are under a legally binding contract called arbitration, and the personal information of the borrower will be handed to the investors if they do not pay back on their loans (See more below). However, currently, our repayment rates are above 90% and investors are getting 19% APR on average.

 See here as to why we think investing with BTCJam is such a great idea:
http://blog.btcjam.com/post/75930899818/why-invest-with-btcjam

And here is what happens when someone doesn't pay back:
http://blog.btcjam.com/post/78529756680/what-happens-when-a-borrower-does-not-pay-back-his

To minimize risk and increase returns, read this:
http://blog.btcjam.com/post/75934926878/the-3-rules-of-peer-to-peer-lending-for-investors

Hilarious. By "legally binding contract" do you mean that you will do absolutely nothing and give me no personal information?

This site is terrible. No one ever use it or you will be sorry. I have lost more money than I care to share by getting scammed and receiving no method or help into investigating the borrower.

[notaek]

BTC jam is absolutely terrible.  I invested in a couple guys who had the max trust rating possible, yet all of them defaulted.  That seems to be the consensus on the site.  Notice how most of the people that have said they actually had a good experience with btcjam were all newbie accounts.

[BTCJamSupport]

I see great success in BTCjam, has anyone loaned coin and got a good return there? I think the operator is just trying to keep it alive so he can keep scraping fee's. I also researched the company they are listed to be in brazil but have someone in the US that is part of the company. This opens them up to illegal lending practices, illegal use of likeness on the website when someone defualts and other types of legal problems. They are even seeking investments from parties in the US.

RiverboatBTC, are founders are from Brazil but moved to the US to go through 500 Startups. We incorporated in the US and are now based in San Francisco.

[dyask]

BTC jam is absolutely terrible.  I invested in a couple guys who had the max trust rating possible, yet all of them defaulted.  That seems to be the consensus on the site.  Notice how most of the people that have said they actually had a good experience with btcjam were all newbie accounts.

If they really had something they would be running it more like a bank.   People would deposit bitcoins and get interest in bitcoin, BTCjam (the bank) would be making the loans and collecting them.  Instead they are using this loan broker model then insures they get paid and pushes all the risk on the lenders.   I also think that BTCjam is trying to be deceptive for example they way they present the loans.  Clearly many lenders wouldn't do a linked loan if they understood they were also taking on the risk of the value of BTC to currency changing.   BTCjam doesn't make this information easy to sort through or to even find a lot of times. 

[notaek]

BTC jam is absolutely terrible.  I invested in a couple guys who had the max trust rating possible, yet all of them defaulted.  That seems to be the consensus on the site.  Notice how most of the people that have said they actually had a good experience with btcjam were all newbie accounts.

If they really had something they would be running it more like a bank.   People would deposit bitcoins and get interest in bitcoin, BTCjam (the bank) would be making the loans and collecting them.  Instead they are using this loan broker model then insures they get paid and pushes all the risk on the lenders.   I also think that BTCjam is trying to be deceptive for example they way they present the loans.  Clearly many lenders wouldn't do a linked loan if they understood they were also taking on the risk of the value of BTC to currency changing.   BTCjam doesn't make this information easy to sort through or to even find a lot of times. 

The model you suggest is obviously superior.  Of course, they opted for the model that maximizes the amount of money they make while punishing their honest users.  It's a shame.

[BTCJamSupport]

BTC jam is absolutely terrible.  I invested in a couple guys who had the max trust rating possible, yet all of them defaulted.  That seems to be the consensus on the site.  Notice how most of the people that have said they actually had a good experience with btcjam were all newbie accounts.

If they really had something they would be running it more like a bank.   People would deposit bitcoins and get interest in bitcoin, BTCjam (the bank) would be making the loans and collecting them.  Instead they are using this loan broker model then insures they get paid and pushes all the risk on the lenders.   I also think that BTCjam is trying to be deceptive for example they way they present the loans.  Clearly many lenders wouldn't do a linked loan if they understood they were also taking on the risk of the value of BTC to currency changing.   BTCjam doesn't make this information easy to sort through or to even find a lot of times. 

Though I agree that we can improve on educating, we do have the explanation on our FAQ page. We recommend users to take out linked loans if their income is denominated in Bitcoin since it is less risky for them. The average loan term is about 34 days and the likelihood of the Bitcoin price to rise an incredulous amount in that time is very unlikely which make investments in linked loans less risky for investors to loose BTC (though they will always be receiving the dollar amount they invested with linked loans so technically no money is lost). Read more about it here: https://btcjam.com/faqs#Loans
See which loan is right for you here: https://btcjam.com/faqs/loan-type-chart