[EDU] The Rule of "No Collateral, No Loan" - IGNORE AT YOUR OWN RISK!

[DiamondCardz]

As in 2013, it seems the trend has continued - a massive influx of users, both new and old, has continued to hit the Lending section with more and more loans being asked for daily. Due to scams a "rule" has been created which, while not currently "enforced", is basically a minimum requirement to get a loan. Note that this isn't an official forum rule, it's just a rule that most lenders will follow.

The rule of "No Collateral, No Loan" means that in order to get a loan you must give collateral that is equal, or preferably higher to the amount you are being loaned.

If you completely ignore this sticky and make a loan request with no collateral, without having massive trust on the forum, the chances of you getting negative trusted feedback and therefore having a Trade with Extreme Caution tag is almost 100%.

In general the amount lenders will be looking for is collateral equal to 110%-120% of the amount you are being loaned. Why is this? Well, first, they want to discourage you from running off with the funds. Collateral also needs to be something that can easily be sold, which brings me to my second point - your $500 worth of ink isn't going to cut it as collateral. Normally lenders will want things such as Altcoins or precious metals, although things that can be sent electronically are preferred.

A common question is why don't I just sell my collateral? Well the reasoning behind collateral is that you think it's going to appreciate in price or do not want to sell it, encouraging you to pay back the loan to have your collateral returned.

However, you must also watch out for collateral scammers. These guys take your collateral and run, without sending you the loan. Avoid this by using escrow.

This applies to lenders too - for your own sake, please follow this rule, both for your wallet and to discourage scammers from coming here.

The below post is also part of this [EDU].

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[Vod]

What is considered collateral?

Collateral is something that can easily be resold to cover the loan value plus interest should the loaner default on the loan.

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).  Coins must be moderately traded on multiple exchanges.
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.  Try localbitcoins.com

What is not considered collateral?

- Items they want to sell.  They don't want it back, so they will default.  It's scammy unethical behavior and will lead to negative trust.  Check their recent posts!
- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  You can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Games codes or similar.  To verify the collateral you need to use the code, which destroys the collateral.  Consider this a purchase, not a loan.  (Post in Digital Goods instead)
- Most new alt-coins or alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come over 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)  Examples:  Steam
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear. (Collateral Scam)
 - Use only "Hero Members" or "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
- A list of trusted escrows can be found here:  https://bitcointalk.org/index.php?topic=855778.0
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

[KWH]

Maybe add the accepted collateral requirements as well, have it all in one sticky.

[sonysasankan]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

[DiamondCardz]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

It is a sticky, yes. Now I wouldn't ban users who do that but I do support actually moderating the Lending section and putting criteria in place for a loan, and deleting clear scams (sympathy loan scams etc.) instantly. Posts that clearly ignore the criteria could also be deleted just as the Giveaway threads are. Of course until theymos sees the issue in the Lending forum, that's not gonna happen.

[Crypto.Conyo]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

[DiamondCardz]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

No, not all, but I do agree there should be criteria put in place (information, etc.) rather than some of the 10 word loan requests we get which are basically spam.

[sonysasankan]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

Or maybe create split on the loans section. It could be like the Marketplace in bitcoins and the other marketplace inside the altcoin subsection. Only in this case the two would be residing in the same section. One where altcoins for collateral is compulsory. The other one can be non-alt coins and other electronic/physical goods for collateral or even without collateral. That would keep the first section full of genuine quality posts and the other one the shady place with scammers where you tread at your own risk and people who want to risk lending can still do so if they want to gamble for out of this world returns. Then there would be no excuse for posting a no-collateral post on an altcoin collateral only section. It can simply be moved to that section without deleting no?

[DiamondCardz]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

Or maybe create split on the loans section. It could be like the Marketplace in bitcoins and the other marketplace inside the altcoin subsection. Only in this case the two would be residing in the same section. One where altcoins for collateral is compulsory. The other one can be non-alt coins and other electronic/physical goods for collateral or even without collateral. That would keep the first section full of genuine quality posts and the other one the shady place with scammers where you tread at your own risk and people who want to risk lending can still do so if they want to gamble for out of this world returns. Then there would be no excuse for posting a no-collateral post on an altcoin collateral only section. It can simply be moved to that section without deleting no?

Raise your suggestion in the Meta section. I do think that would work, but obviously I am not an admin and telling your ideas to me won't make anything happen.

[sonysasankan]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

Or maybe create split on the loans section. It could be like the Marketplace in bitcoins and the other marketplace inside the altcoin subsection. Only in this case the two would be residing in the same section. One where altcoins for collateral is compulsory. The other one can be non-alt coins and other electronic/physical goods for collateral or even without collateral. That would keep the first section full of genuine quality posts and the other one the shady place with scammers where you tread at your own risk and people who want to risk lending can still do so if they want to gamble for out of this world returns. Then there would be no excuse for posting a no-collateral post on an altcoin collateral only section. It can simply be moved to that section without deleting no?

Raise your suggestion in the Meta section. I do think that would work, but obviously I am not an admin and telling your ideas to me won't make anything happen.

What's a meta section? How Do I find out who's the mod for the lending section. Don't see any moderator titles in the section heading. I really don't understand the hierarchy system at Bitcointalk... I see some as "staff", then there's also "global moderators". Is each staff assigned a section of the forum to moderate or something? I'm not very old here in the forums and havent really ventured outside posting replies and PMs 

[DiamondCardz]

This needs to be a sticky and will avoid a lot of clutter here. The genuine loan seekers get lost in all this shit.

In fact I would go one step further and ban the user who are all like "oh but I would never ever ever cheat some one cross my heart and its for the dying people of coinistan", etc. No collateral needs to be enforced just like the No giveaways rule and the "reserved" posting rule. I'm all for reducing nightmares

I agree. Even if it is not a forum rule, it could be a section rule.
All requests for a loan without a collateral, should be closed. If a user insists with these kind of requests, must be banned.
More than the 90% of the posts in this section is currently pure garbage.
CC.

Or maybe create split on the loans section. It could be like the Marketplace in bitcoins and the other marketplace inside the altcoin subsection. Only in this case the two would be residing in the same section. One where altcoins for collateral is compulsory. The other one can be non-alt coins and other electronic/physical goods for collateral or even without collateral. That would keep the first section full of genuine quality posts and the other one the shady place with scammers where you tread at your own risk and people who want to risk lending can still do so if they want to gamble for out of this world returns. Then there would be no excuse for posting a no-collateral post on an altcoin collateral only section. It can simply be moved to that section without deleting no?

Raise your suggestion in the Meta section. I do think that would work, but obviously I am not an admin and telling your ideas to me won't make anything happen.

What's a meta section? How Do I find out who's the mod for the lending section. Don't see any moderator titles in the section heading. I really don't understand the hierarchy system at Bitcointalk... I see some as "staff", then there's also "global moderators". Is each staff assigned a section of the forum to moderate or something? I'm not very old here in the forums and havent really ventured outside posting replies and PMs 

That's correct. There aren't any mods for the Lending section right now as there are no rules that can be enforced here, and spam and all that is usually dealt with by the global moderators. Also, meta is https://bitcointalk.org/index.php?board=24.0

[KWH]

What is considered collateral?

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.

What is not considered collateral?

- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Most alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)
 
When should you use Escrow?

 - Never send collateral directly to a newbie offering you a loan, as they are likely to take your coins and disappear.
 - Use only "Hero Members" for escrow - they have a vested interest in the community with the days they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

Finally, do not encourage scammers to come here!  Giving out loans to newbies with no collateral, or loans to people with "SCAMMER" under their name are likely to get you negative-repped by other users, like me.  

[DiamondCardz]

For reference...BTC is not collateral for a BTC loan. That's like me saying "Here's $5 collateral, can I have that $100 loan now?" First, I might as well have just taken out a $95 loan, and secondly, if you're offering BTC as collateral you obviously have less than 100% collateral else you wouldn't be taking out the loan, meaning you're probably not going to find someone to loan to you.

[Rupture]

I do loans without collateral here: https://bitcointalk.org/index.php?topic=590231.0

[KWH]

I do loans without collateral here: https://bitcointalk.org/index.php?topic=590231.0

[RyanMilligan1]

What is considered collateral?

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.

What is not considered collateral?

- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  It's great that you can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Most alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear.
 - Use only "Hero Members" for escrow - they have a vested interest in the community with the days they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

Finally, do not encourage scammers to come here!  Giving out loans to newbies with no collateral, or loans to people with "SCAMMER" under their name are likely to get you negative-repped by other users, like me.  

Another for 'small valuable items' could be jewellery. I was just looking at watch collection and thinking that could cover over a 100K btc loan.

[CCU]

Thanks for the warning and the general knowledge.

I've come to invite those who like to share knowledge to consider teaching at CCU (Cryptocurrency University), we expect to be up and running by Fall of 2014.  

Here is a link to our request for instructors: https://bitcointalk.org/index.php?topic=632961.msg7061983#msg7061983

 

[DiamondCardz]

Note: You need to acknowledge this if you are taking a loan out - if you are a new member (Newbie, Jr. Member, perhaps even a Member), trying to take out a loan without collateral will almost always result in you receiving negative trust and being marked with a red "TWC" tag. Mods will not remove this and neither will Admins.

[Muhammed Zakir]

Note: You need to acknowledge this if you are taking a loan out - if you are a new member (Newbie, Jr. Member, perhaps even a Member), trying to take out a loan without collateral will almost always result in you receiving negative trust and being marked with a red "TWC" tag. Mods will not remove this and neither will Admins.

What if that person have no collateral but can give the btc back as he promised?

Kindly,
        Muhammed Zakhir

[sonysasankan]

Note: You need to acknowledge this if you are taking a loan out - if you are a new member (Newbie, Jr. Member, perhaps even a Member), trying to take out a loan without collateral will almost always result in you receiving negative trust and being marked with a red "TWC" tag. Mods will not remove this and neither will Admins.

What if that person have no collateral but can give the btc back as he promised?

Kindly,
        Muhammed Zakhir

Any scammer "can" give the BTC back. Collateral acts as an answer to "if he doesn't". Its to protect the lender, not prove the borrower's trustworthiness.

[renee25]

namecoin now has an option for "scrow" you pay namecoins to an address and they give you the related .bit domain it's still in beta and running on command line, and as everybody know development is slow but someone surely will build something interesting here...

[leevalle]

Coulda mobile wallet be an acceptable form of collateral?

[Muhammed Zakir]

Coulda mobile wallet be an acceptable form of collateral?

Yes! but it is little difficult. You must have some coin it!
Kindly,
      MZ

[leevalle]

Coulda mobile wallet be an acceptable form of collateral?

Yes! but it is little difficult. You must have some coin it!
Kindly,
      MZ

I mean mobile wallet like ISIS WALLET, which is tied to my bank and credit card. Its a form of NFC patment

[DiamondCardz]

Bumping this as it might still stop a couple people from wasting their time trying to get a loan with no collateral. Obviously, scammers are scammers and they'll still attempt to scam, but this sticky will stop some people from wasting their time.

[Bobblehead Pete]

Hmmmm... can anyone give an example of a perfect collateral if the one who wants to loan is in, for example, asia?

[slu2]

Has anyone figured out how to correctly and safely offer up Real Estate deeds, or car titles, with a lien or something of that sort.

I have a 4 plex deed and all of my vehicles are paid for with title in hand.   But how to accomplish a lien or something like that?

I may have to try to find a lawyer that deals with Bitcoin, but so far I haven't found anyone who has a confident answer on this, including my own business lawyer.

[DaNksta]

If they had collateral they probably wouldn't need a loan =/  most would sell their stuff or use it as collaterall for a pawn shop loan

[Muhammed Zakir]

If they had collateral they probably wouldn't need a loan =/  most would sell their stuff or use it as collaterall for a pawn shop loan

2 different answers based on 1 answer? Some collateral are precious which we don't like to sell but you need money, so you can take a loan putting *it* as collateral.

   ~~MZ~~

[slu2]

I got a loan 2 days ago at BTCJam.com for nearly 4 BTC, no collateral.

It took two tries, but I finally got funded.

I am seriously considering setting up a "title loan by bitcoin" company.   This has to be fairly easy to put together.

[DiamondCardz]

I got a loan 2 days ago at BTCJam.com for nearly 4 BTC, no collateral.

It took two tries, but I finally got funded.

I am seriously considering setting up a "title loan by bitcoin" company.   This has to be fairly easy to put together.

Because BTCScam is a terrible site where gullible people go. The repayment rate is something like 75% I think. You lose a ridiculous amount of cash investing.

[slu2]

I got a loan 2 days ago at BTCJam.com for nearly 4 BTC, no collateral.

It took two tries, but I finally got funded.

I am seriously considering setting up a "title loan by bitcoin" company.   This has to be fairly easy to put together.

Because BTCScam is a terrible site where gullible people go. The repayment rate is something like 75% I think. You lose a ridiculous amount of cash investing.

I made a mistake investing the amount of 0.2 btc in two scammers.  So I've lost 0.4 BTC in bad investments, but I have made all of the coin back and then some, so my losses have been covered by my gains.

My loan will be paid back, so I will be another good example of BTCJam.

[abstream]

All this threads for lending makes me wonder - why would you lend bitcoin to forum members if there are exiting platforms/websites for lending(where borrowers have some credit score) - I am not posting the names since I am really interested in the answer and I am not here to spam or advertise...

[abstream]

liquid altcoin?

Hmmmm... can anyone give an example of a perfect collateral if the one who wants to loan is in, for example, asia?

[btcminer021]

Good sticky. Would be nice to see a list of Legendary members who facilitate escrow in order to strengthen the community.

[DiamondCardz]

I've been rather shocked by the fact people are getting back into the habit of requesting No Collateral loans, and I'd strongly encourage lenders to start enforcing this rule more closely again. Just because one No Collateral loan worked doesn't mean it's a good idea.

That said, I understand why the threads offering No Collateral loans came about - there's clearly a fairly attractive market there and you could make some nice coin from the interest. But should still not request No Collateral loans without high trust (i.e. my level, not trying to boast).

[cryptodojo]

Great tidbit of info for Newbies to lending.  Thanks for educating us ALL!

[hunkey600]

i was just thinking why give negative trust if someone has requested loan without collateral, i mean he has not done anything wrong yet....i mean if you think borrower is not trust worthy then simply avoid that person and don't give loans. I am just saying this maybe because of this someone innocent can suffer.

[Muhammed Zakir]

i was just thinking why give negative trust if someone has requested loan without collateral, i mean he has not done anything wrong yet....i mean if you think borrower is not trust worthy then simply avoid that person and don't give loans. I am just saying this maybe because of this someone innocent can suffer.

Are you telling to encourage people without any trust who is very probable alt of established users to ask for loans in a place where users even scammed for as little as $1(maybe less)? Leaving negative trust is to prevent scam. You can see most accounts will be inactive after receiving negative trust which shows those accounts were made solely to ask loan(s).

[DiamondCardz]

i was just thinking why give negative trust if someone has requested loan without collateral, i mean he has not done anything wrong yet....i mean if you think borrower is not trust worthy then simply avoid that person and don't give loans. I am just saying this maybe because of this someone innocent can suffer.

Because it prevents people from being scammed, simply. It's the best measure that can be taken to avoid endless scamming and in all fairness it's only applied where a scam is extremely obvious - no sane person goes on an anonymous online person and asks for a 2 BTC loan with no collateral or anything.

[hunkey600]

i was just thinking why give negative trust if someone has requested loan without collateral, i mean he has not done anything wrong yet....i mean if you think borrower is not trust worthy then simply avoid that person and don't give loans. I am just saying this maybe because of this someone innocent can suffer.

Are you telling to encourage people without any trust who is very probable alt of established users to ask for loans in a place where users even scammed for as little as $1(maybe less)? Leaving negative trust is to prevent scam. You can see most accounts will be inactive after receiving negative trust which shows those accounts were made solely to ask loan(s).

i am not encouraging any scam. just looking for any alternative. Maybe you guys are right

[hunkey600]

i was just thinking why give negative trust if someone has requested loan without collateral, i mean he has not done anything wrong yet....i mean if you think borrower is not trust worthy then simply avoid that person and don't give loans. I am just saying this maybe because of this someone innocent can suffer.

Because it prevents people from being scammed, simply. It's the best measure that can be taken to avoid endless scamming and in all fairness it's only applied where a scam is extremely obvious - no sane person goes on an anonymous online person and asks for a 2 BTC loan with no collateral or anything.

I was just looking if there is any alternative, maybe you guys are right.

[Vod]

Second post updated to include the following escrow list:

- A list of trusted escrows can be found here:  https://bitcointalk.org/index.php?topic=855778.0

[phishead]

I'm curious as to if I would want to take a loan, how would I know at what % rate I would need to set, along with how long in duration? What if I have multiple things I could give in collateral so I could increase the incentive to get a loan? I know I'm a junior member with no trust, but if say I wanted to purchase something that's pretty expensive, and need some time to pay it back, but have the collateral items to make the incentive worth it (mostly physical goods with some altcoins), what would I need to do?

I'm not saying I really want or need a loan right now, but I'm rather curious.. Because there are a couple things in the market place I would want to buy right now

[whywefight]

I'm curious as to if I would want to take a loan, how would I know at what % rate I would need to set, along with how long in duration? What if I have multiple things I could give in collateral so I could increase the incentive to get a loan? I know I'm a junior member with no trust, but if say I wanted to purchase something that's pretty expensive, and need some time to pay it back, but have the collateral items to make the incentive worth it (mostly physical goods with some altcoins), what would I need to do?

I'm not saying I really want or need a loan right now, but I'm rather curious.. Because there are a couple things in the market place I would want to buy right now

check the threads of people that are active atm. most of them have terms and explain them in detail.

[Misiak4]

Thank you for this post. Link to trusted escrows is quite helpfull for me because I want to start my own loan "business".

[aRegularNobody]

What is considered collateral?

Collateral is something that can easily be resold to cover the loan value plus interest should the loaner default on the loan.

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).  Coins must be moderately traded on multiple exchanges.
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.  Try localbitcoins.com

What is not considered collateral?

- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  You can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Games codes or similar.  To verify the collateral you need to use the code, which destroys the collateral.  Consider this a purchase, not a loan.  (Post in Digital Goods instead)
- Most new alt-coins or alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come over 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)  Examples:  Steam
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear. (Collateral Scam)
 - Use only "Hero Members" or "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
- A list of trusted escrows can be found here:  https://bitcointalk.org/index.php?topic=855778.0
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

This Guy is a piece of work..... Who are you?  why do you determine what is and is not valid collateral?   I guess writing something makes you the authority!  half ass wanna be mod but is really nobody!

[DiamondCardz]

This Guy is a piece of work..... Who are you?  why do you determine what is and is not valid collateral?   I guess writing something makes you the authority!  half ass wanna be mod but is really nobody!

Someone is a little salty, man. His advice is fair. You could raise the same question to me for making this thread - it's just advice that is generally agreed upon by the community and has been refined via suggestions by the community. Want to make a suggestion?

[Zeroxal]

I would like to add something regarding forum account as collateral. I got scammed and have a thread here: https://bitcointalk.org/index.php?topic=1256710.0
Would be nice to warn other lenders to ask for a signed message from a 3 month old unedited bitcoin address when getting a forum account as the collateral.

[erickimani]

that is a very good rule. I have noted it. thanks

[Vod]

Second post updated to include the following collateral:


What is not considered collateral?

- Items they want to sell.  They don't want it back, so they will default.  It's scammy unethical behavior and will lead to negative trust.  Check their recent posts!

[dre1982]

Is there a reason why newbies aren't allowed on this sub forum. Halve of all topics here are closed because it are newbies asking for loan. Just made this sub forum available for Member+ or so. Would make this whole sub forum a lot nicer.

[--Encrypted--]

Is there a reason why newbies aren't allowed on this sub forum. Halve of all topics here are closed because it are newbies asking for loan. Just made this sub forum available for Member+ or so. Would make this whole sub forum a lot nicer.

newbies are allowed here. it's just almost all of the newbies tend to ask a for loan without collateral.

and about restricting newbies from this forum.. just read this topic, which is just one of the many topics requesting the same thing.

[DarkStar1O9]

I don't know if a .0001 loan bothers someone then they must be going through some sort of complex and/or slow method of converting over their bitcoin from their main currency. Amounts over .02 BTC I agree about being more cautious with.

[cornish_will]

Hi Long time Not here busy busy

I have one point im alwasy confused about collateral loans especially with alt coins is the fact if u wanted borrow 1Btc and had enough alt coins to cover colatteral then wouldnt you just sell the coins on an exchange?

Just curious

[Quickseller]

Hi Long time Not here busy busy

I have one point im alwasy confused about collateral loans especially with alt coins is the fact if u wanted borrow 1Btc and had enough alt coins to cover colatteral then wouldnt you just sell the coins on an exchange?

Just curious

If you were to sell the altcoins then you will miss out on any potential price appreciation that would happen between when you take out the loan and when you repay the loan. You would also incur trading fees/costs both when you sell the altcoin and when you buy it back (and if your position is large enough you would incur some slippage in both directions).

Some people also like to borrow btc in order to buy even more altcoins (eg they are using leverage)

[MFahad]

Hi Long time Not here busy busy

I have one point im alwasy confused about collateral loans especially with alt coins is the fact if u wanted borrow 1Btc and had enough alt coins to cover colatteral then wouldnt you just sell the coins on an exchange?

Just curious

If you were to sell the altcoins then you will miss out on any potential price appreciation that would happen between when you take out the loan and when you repay the loan. You would also incur trading fees/costs both when you sell the altcoin and when you buy it back (and if your position is large enough you would incur some slippage in both directions).

Some people also like to borrow btc in order to buy even more altcoins (eg they are using leverage)

Yes agree with you. they buy more ALT coins with bitcoins and then trade them for profit.
this is how they tend to ge tmaximun profit. So they require more and more BTC

[JeemFromBoston]

I have a perfect rating wkth over 100 trades on localbitcoins, as both seller and buyer.

Would this LBC account be valid as collateral?

[--Encrypted--]

I have a perfect rating wkth over 100 trades on localbitcoins, as both seller and buyer.

Would this LBC account be valid as collateral?

no.

- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)

[BigBloke]

Thank you for this info I will put this to use if I ever decide to lend people money. 

[Egglaity]

I like how you give good examples of collateral in this.  But thank you for the info

[Apper1990]

I always see people using twitter accounts as collateral.  I wonder how safe that is

[Sailse]

Can I use a gift card as collateral?

[Thicitch]

Does a keyboard count as collateral?

[BlokeTodd]

Giftcards shouldnt be accepted as collateral

[Mailserver]

Thanks, interesting read.

Will take inboard what you said.

[btclight]

Hello

I have 180 days old limited paypal account which ready to cash out via bank account or credit card

and already received email from paypal for allowed cash out funds

I also called via phone to paypal and can ask paypal for transfer funds to another paypal account if required

I have NOT any bank or card so can not cashout funds myself

amount available in limited paypal account around 220 USD +

can give all userid password, email password etc

can give this as Collateral for get loan 100 USD + worth of btc loan?

waiting for help

thanks

[morantis]

i have to say that some ways of collateral make no sense to me in terms of altcoins

I have seen on here and on sites that are just for lending, a collateral of say Doge for a Bitcoin loan. The person needs $1000 in Bitcoins and puts up $1100 in Doge to get the loan.  Ok, i have never understood this method.  If you have $1100 worth of Doge, just exchange it for the $1100 in Bitcoins or straight to FIAT if that is the need.  And they do it like that, the amount of the loan, plus some.  Then they pay interest on the loan, meanwhile they are sitting on the Doge.  While prices rise and fall, the standard altcoins of Doge and LTC and BTC are going to be fairly strong for a while.  Why hand someone your $1100 worth of Doge and not have access to it to pay interest on a loan of another top five altcoin. 

Just exchange the coins one for the other and save the money.  In the end, if you pay the loan, you are right back at Doge, no Bitcoin and minus interest.  Whatever the loan was for might have paid off.  If you exchange the Doge, get the BTC and at the end, switch it back to Doge, same results.  You have the Doge, no BTC and whatever profit your enterprise made or lost, but without paying the loan interest.

It is a riddle to me.  Putting up $800 worth of Doge to back a $1000 BTC loan, that makes some sense.  You are locking down a 80% repayment no matter what and not risking your own full $1000, but a higher collateral amount, just in a different coin is ludicrous to me.  Unless someone can explain it.

[--Encrypted--]

Why hand someone your $1100 worth of Doge and not have access to it to pay interest on a loan of another top five altcoin.

because people might believe that doge prices will go up before they get enough money to buy it back.

[cryptohustla]

Why hand someone your $1100 worth of Doge and not have access to it to pay interest on a loan of another top five altcoin.

because people might believe that doge prices will go up before they get enough money to buy it back.

i guess that explains it though i was also confused ..

[KingTylerVVS]

Thank you for these guidelines.

I know you mentioned domains, so can we offer our website as collateral?
OR Artwork?

2 EXAMPLES IN ONE: http://www.d3fc.me/2016/07/PRICELESSHeirloomArtwork.html

(I am an artist and the developer of www.d3fc.me)

I seek a loan but only from someone who can afford to lend around 5 grand for a period of a few years.

I have a brilliant strategy that will generate bitcoin ad revenue and repayment is virtually guaranteed.
Get this: facebook ads cost around $10 for 10 visitors.
Bitcoin ads can attract bitcoin enthusiasts, 10 for 7¢. And bitcoin ads on my site pay almost as much.
I can attract one visitor for 7¢ and have them visit over and over and over, for free if they enter an email.
My site already had tons of advertisements set up in unobtrusive places.

I am 100% ok with escrow, but I can't lose access to my site in the mean time,
or I wont be able to update it and add content for visitors.
Currently the website login is authenticated and well protected.
How do I share access and relinquish control 100% if I default?

I don't want to be thought of as a scammer and I mean all the best.
I do want to be transparent. I already owe 1.3 bitcoins to bitcoin jam... Nowhere else though.
(NOTE: it is tied to USD so if the price spikes I can pay back with my current .55 bitcoin savings)
I would have paid it off a year ago except cloud mining sites are all ponzis and I lost a lot of coin back then.
(Yes I was naive and should not have invested in cloud mining. Lesson learned.)

I will be forced to continue working 60 hours a week at minimum wage,
just to cover bills and then repay the loan, until I get a decent sized loan. NO SOB here, just facts.
If I get a big loan the first thing I will do is pay back the 1.35 bitcoins I owe btcjam.
Then finish my site with layers of content and email marketing funnels.
For big projects that get millions in investments,
the 1.3 bitcoins I owe priced at the current USD value is chump change.
I think my project honestly deserves far more than I am asking. Anyways...

Thanks again for this sticky - it is very informative.
And thanks for any answers you can give me.

Cheers! Long live Bitcoin!

[wallacerj]

What is considered collateral?

Collateral is something that can easily be resold to cover the loan value plus interest should the loaner default on the loan.

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).  Coins must be moderately traded on multiple exchanges.
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.  Try localbitcoins.com

What is not considered collateral?

- Items they want to sell.  They don't want it back, so they will default.  It's scammy unethical behavior and will lead to negative trust.  Check their recent posts!
- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  You can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Games codes or similar.  To verify the collateral you need to use the code, which destroys the collateral.  Consider this a purchase, not a loan.  (Post in Digital Goods instead)
- Most new alt-coins or alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come over 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)  Examples:  Steam
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear. (Collateral Scam)
 - Use only "Hero Members" or "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
- A list of trusted escrows can be found here:  https://bitcointalk.org/index.php?topic=855778.0
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

Very well explained. Congrats 

[the_mixologist]

What is considered collateral?

Collateral is something that can easily be resold to cover the loan value plus interest should the loaner default on the loan.

- The best collateral is another crypto-currency, such as Litecoin (also written as LTC).  Coins must be moderately traded on multiple exchanges.
- Some digital wares such as domain names can be considered as long as the user cannot recover it.
- Small valuable items that can be shipped though the mail - i.e. gold, silver, iphones, etc.
- Large items, such as a motorcycle or guitar can be used if you live close to the person giving you the loan.  Try localbitcoins.com

What is not considered collateral?

- Items they want to sell.  They don't want it back, so they will default.  It's scammy unethical behavior and will lead to negative trust.  Check their recent posts!
- Items not in hand.  Don't trust a user that promises to give you something *when* they default!  Tracking numbers only show something has been mailed - it could be an empty box.
- Future income.  You can prove you'll make xx coins in the next few days, but nothing forces you to send those coins to pay your debt.
- Identification.  So what if they can prove who they are.  Are you going to spend more money and time taking them to court on untested legal grounds?  You'll probably just walk away, like everyone does.  ID is useless.
- Games codes or similar.  To verify the collateral you need to use the code, which destroys the collateral.  Consider this a purchase, not a loan.  (Post in Digital Goods instead)
- Most new alt-coins or alt-coins that trade for satoshis are not good collateral as they can become worthless overnight.
- Paypal should never be used - they are anti-bitcoin and will rule against you 100% of the time.  Escrow can't even help, as paypal charge backs can come over 6 months later!
- Most valuable online accounts can easily be recovered by social engineering (the user contacting support to say they were hacked, and regain control of the account)  Examples:  Steam
 
When should you use Escrow?

 - Never send collateral directly to a low activity/post account offering you a loan, as they are likely to take your coins and disappear. (Collateral Scam)
 - Use only "Hero Members" or "Legendary Members" for escrow - they have a vested interest in the community with the time they have spent here.
 - Do not use a third party escrow service unless hero members can vouch for it - it's too easy to create a website, do a few escrows then disappear with a big balance.  Rinse and repeat.
- A list of trusted escrows can be found here:  https://bitcointalk.org/index.php?topic=855778.0
 
When considering the trustworthiness of a user, ignore "Posts" as there are schemes that pay a user per post.  A person can make 1,000 useless posts in one day and contribute nothing to the community.  Instead look at the "Activity" number - that gives you a more accurate tally of how involved the user is in the community.

Ignore the sob stories that users post - it's just a scam to get your coins.  If a person really is in such a situation, they can turn to family, friends or other social circles they frequent.  They are just posting in our community because the payment is anonymous and irreversible.

Sry, so if I use the domain name as the collateral, how can we evaluate the price? Because i checked the different est domain name, also not the same price some are high, some are low?

[retampan]

I want to loan, i have collateral. But many people deny my loan request.

[szpalata]

I want to loan, i have collateral. But many people deny my loan request.

.

"Do you want to loan" or you want a loan? If you want a loan then you must basically have some reputation here, you can't have a newbie account with less than 20 post and expect to be trusted for a loan even if you have adequate collateral. It's understandable that people tend to behave this way because a lot of things happen on the Internet and everyone is looking out for his or her security.

[johnny1234]

i am trying to understand this collateral business.  i have noticed loans request on this site where the BTC account is used but how does that work if your a newbie?  i have accounts with paxful and localbitcoin but they currently have zero balance.  can they be used?

[Vod]

i have accounts with paxful and localbitcoin but they currently have zero balance.  can they be used?

How much are you out if you don't get your free accounts back?   

It's obvious you are just looking for a way to scam some free coins.  I suggest you interact with the community before begging for money.

[krishnapramod]

Facebook, Twitter, Steam, Localbitcoins, Paxful, cloud mining accounts, gift cards, collateral cannot get better than this

More than a couple of years ago I had asked a loan as a newbie and got painted in red by vod. I did not had any intention of scamming when I asked the loan at that time, but the point is decentralization brings too much anonymity with it, even it takes some time to build trust with an identifiable object, and just jumping into lending section and asking 1 BTC loan does not scale anywhere on the trust factor. Now I have repaid half a dozen loans on BCT, it took couple of years to build some trust in an anonymous environment, but still worth it ...So newbies if you just have "accounts" as collateral do not bother posting a loan request and be a bait for sig spammers

[tanvirnsu5]

Just to get clarify, does domain Name/webhosting will be accepted as collateral?

[mrcash02]

What are people here most accepting as collateral?

I would like to try lending money, but I don't know if it will worth, as we can't accept accounts as collateral and alt coins (depending the altcoin) are too risky and I'm not sure if many people here will give alt coins as collateral, as was said above on an old post:

i have to say that some ways of collateral make no sense to me in terms of altcoins

I have seen on here and on sites that are just for lending, a collateral of say Doge for a Bitcoin loan. The person needs $1000 in Bitcoins and puts up $1100 in Doge to get the loan.  Ok, i have never understood this method.  If you have $1100 worth of Doge, just exchange it for the $1100 in Bitcoins or straight to FIAT if that is the need.

Physical items are impossible to deal, as we are in very far away countries and mail services usually steal packages.

[PunkAngel]

I need to borrow a loan. If anyone is willing please contact me. I don't want much money, just a enough to buy some groceries please. I have a reddit account that I can use as collateral. I am not sure what else is exactly used for Collateral but I am willing to consider whatever options you suggest.

[aadje93]

Not valid and wrong place to post your loan request please read teh first post if you not understand what is a valid collateral it's really not hard to read and underatand it :/

[PPOC]

Looking for ideas on obtaining 75K USD loan from trusted reputable source to finance a commercial property investment for 3yrs. Have ETH and BTC for collateral but don't want to sell as I believe the run is no even close to the top of the hill. Willing to put up 150K worth of coins, I talked to 2 banks but they have no ideas on how to collateralize digital assets.

Any suggestions?