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

[Egglaity]

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

[1713544952]

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[1713544952]

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[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!

[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.