Issuing loans in Bitcoin, how we could do it

[AicecreaME]

I think it’s going to be difficult to issue and make loans using bitcoin. Cryptocurrency price varies depending on what season it is, hence making it risky to loan and borrow because of its volatility. If ever someone borrowed btc and its price increased after he’ll have to pay more than he borrowed.

Another thing, its much more complex to have a crypto bank as it would definitely need some personal information, hence users need to provide for security reasons of the lender. If you would compare this concept to banks, this is certainly much of a hassle because it’s just going to be digital transaction unlike in banks where it requires physical appearance of the borrower. There should also be a contract stating the terms and conditions if the borrower wasn’t able to pay the amount and its interest on time.

The idea is nice, but risky. I honestly don’t know how we can pull this off. Maybe if concrete policies were be given, it can happen. Hoping to hear more opinions about this matter. Will read the new replies to this thread.

[wheelz1200]

I started to think about it. How a bank and folks could issue loans to people?

Currently, when you need to borrow money, your banker just edits your balance account and create money magically. You then pay back monthly.
Banks won't be able to do that with Bitcoin with its limited supply. You can't print bitcoins.

But now, between folks. Let's say I'm the banker and you're the customer looking to borrow money to buy a house. I can lend you the money but how to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.

Its just like lending someone cash no different.  You either get it back or you don't then you have to legally deal with it.  Bitcoin is no different.  I dont think banks will get into lending bitcoin because lime you said they would have to have 100% coverage meaning they cant just loan bitcoin magically...but they can lend their own coin 

[oHnK]

I started to think about it. How a bank and folks could issue loans to people?

Currently, when you need to borrow money, your banker just edits your balance account and create money magically. You then pay back monthly.
Banks won't be able to do that with Bitcoin with its limited supply. You can't print bitcoins.

But now, between folks. Let's say I'm the banker and you're the customer looking to borrow money to buy a house. I can lend you the money but how to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.

Its just like lending someone cash no different.  You either get it back or you don't then you have to legally deal with it.  Bitcoin is no different.  I dont think banks will get into lending bitcoin because lime you said they would have to have 100% coverage meaning they cant just loan bitcoin magically...but they can lend their own coin 

If that is the case, it will be difficult for those who borrow bitcoin in countries that have not legalized bitcoin. Lending and borrowing conventional cash money has been accepted by everyone and every country has prepared related regulations. But bitcoin is a little different because not all countries recognize it. How?

[proTECH77]

I will not advise anyone to issue loan in bitcoin.  I don't think it will be possible for someone to come out with good profit at the end of the payment. Bitcoin is a decentralized currency which it will be hard for such loan to be granted to anyhow person in the country.
Many people go to bank to collect loan to improve their businesses and also Carter's for their family too. Collecting loan from bank, depend the amount of money collected that will determine the interest you will be paying every month to the bank,to balance up within a year. Many people find it difficult to balance up within a year because of the interest attache to it, is too high for me, that is making them not to meet up with their interest that caused them to lose their properties and other valuable things.
I don't think, it will be easy for someone to issue loans in bitcoin and expect that person to meet up with the payment .when the price is going down how would that person meet up with the loan unless interest will not go to be involve in such loan because if intereste involved no way the person can meet up the way other people use to Meet up with bank loan in the country.

[pankowri]

This can be an interesting one after the implementation of the whole process. I am thinking it's afterward situations. It can be expanded with zero-sum and non-zero-sum theory. That means it can be a win-win situation for both just because of increasing the price of Bitcoin. Because the supply is limited, so the price of it can be increased anytime. Sometimes this win will work for the lender and sometimes it will work for borrower.

[Darkelf11]

How to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.

People can do same thing like what banks do. They can create a contract of agreement between the lender and the borrower just to make sure that everything will be okay until the end. A normal lender has its own power even if he is just an ordinary person and not a bank. There are many things to think of, people borrows money when they really are in need. When loaning with bitcoin, I think it is better if you would loan the amount in USD but in the form of bitcoin for if the value increases, the amount of money borrowed will also increase.

[Russlenat]

How to be sure you will pay me back with full interests? With banks, the solution is easy, the bank seizes the house and you can't do something. But the average Joe hasn't the same 'power' than a bank to collect a debt.

People can do same thing like what banks do. They can create a contract of agreement between the lender and the borrower just to make sure that everything will be okay until the end. A normal lender has its own power even if he is just an ordinary person and not a bank. There are many things to think of, people borrows money when they really are in need. When loaning with bitcoin, I think it is better if you would loan the amount in USD but in the form of bitcoin for if the value increases, the amount of money borrowed will also increase.

Contract is the most value, however, for loans with collateral, I think it's hard to measure how much is the value of collateral if the collateral is a property, as anytime bitcoin will pump or dump, that would give the borrower an option whether to pay the loan or not and just let the collateral be foreclose.

[Fortify]

Ultimately you would issue a loan with Bitcoin in the same way you would issue many other loans, except you would probably peg it against the USD value of bitcoin. Many people all around the world borrow in USD, but they can suffer badly if the exchange rate goes the wrong way - many loans made in Turkey face this problem for example. Ultimately it is the lenders who will have to judge whether it is possible to do this and if the returns are worth the risks. They will expect a large amount of collateral due to the volatility of cryptocurrency and it is unlikely that many borrowers will consider it to be a good deal. They might also only offer it to high net worth individuals and those with an impeccable credit report.