OTC Credit Default Swaps

[copumpkin]

I was wondering if anyone had considered CDSes on loans around here. To prevent fraud, we'd probably need to verify that any buyers are known, reputable members of the community, or they could someone could ask for loans under one identity and buy a CDS under another identity, then disappear/default and make money twice.

There are also other ventures that people could buy CDSes against. bitscalper or even larger bitcoin enterprises come to mind. Shades Minoco? It could give investors "insurance" against bad shit happening there.

Given how risky this market is, anyone selling CDSes could make really good money, too. But again, reputation would be important as the potential losses could be quite large. And of course, it'd be tricky to figure out a "right" price for this stuff, but should definitely be possible.

Anyway, it was just a random idea, and I wanted to see if people had any thoughts on it

[imsaguy]

I like it.

[ineededausername]

I've considered it before, and it would be a good idea.  I don't know how to price them, so I haven't dabbled in it.

[imsaguy]

I've considered it before, and it would be a good idea.  I don't know how to price them, so I haven't dabbled in it.

You'd need to consider several factors and come up with some sort of scale:

1) How long of a term?

2) How much is it for?

3) Who is it? What is their reputation like?

4) What are they using the loan for?

5) How reasonable is their method of repayment?

6) What is the overall btc market doing?

[pirateat40]

I would insure people that I have on my list.

[copumpkin]

I've considered it before, and it would be a good idea.  I don't know how to price them, so I haven't dabbled in it.

It'd be interesting to see what some of the creditors around here would be willing to pay for insurance. Or what speculators would be willing to pay to bet on someone's illegitimacy

Other open questions would include whether we want to make the open CDS contracts public, as an additional measure of risk for potential lenders evaluating a deal. I'm leaning towards "no" on that, but I guess it'd be up to individual CDS sellers. I'd expect GPG contracts to be crucial if the agreements are to be private.

[pirateat40]

I've considered it before, and it would be a good idea.  I don't know how to price them, so I haven't dabbled in it.

It'd be interesting to see what some of the creditors around here would be willing to pay for insurance. Or what speculators would be willing to pay to bet on someone's illegitimacy

Other open questions would include whether we want to make the open CDS contracts public, as an additional measure of risk for potential lenders evaluating a deal. I'm leaning towards "no" on that, but I guess it'd be up to individual CDS sellers. I'd expect GPG contracts to be crucial if the agreements are to be private.

Maybe its time for a true Bitcoin Credit Bureau.

[vuce]

I think that's a great idea. Let's do it! 

[teek]

need something with an elected board of directors

[imsaguy]

need something with an elected board of directors

dibbs on chairman/president/executive director/ceo/managing partner

[DannyM]

need something with an elected board of directors

dibbs on chairman/president/executive director/ceo/managing partner

witnessed.

[PatrickHarnett]

Like many "markets" it's starting to sort itself out with a few early adopters and people doing things.  Working on building up my loan portfolio because it is a worthwile service and while CDS might not be the right instrument, there is a fair degree of risk involved. 

Posting to keep up to date and expressing an interest given the other names in the thread so far.

[vuce]

I've considered it before, and it would be a good idea.  I don't know how to price them, so I haven't dabbled in it.

You'd need to consider several factors and come up with some sort of scale:

1) How long of a term?

2) How much is it for?

3) Who is it? What is their reputation like?

4) What are they using the loan for?

5) How reasonable is their method of repayment?

6) What is the overall btc market doing?

We should apply some game theory in order to get the general idea about those questions. It's been a long time since I've had anything to do with it, but I would look into it if there's interest when I get the time.

[Fiyasko]

need something with an elected board of directors

dibbs on chairman/president/executive director/ceo/managing partner

witnessed.

Stop putting those fucking troll posts up, All your fucking doing is spamming for a free post count, What you say has almost No relevance to the topic, You could walk in and say "witnessed" to almost Any fucking thread.

in ref to OP, I think it'd be cool if we could somehow pull/merge/import all the OTC ratings into this new possible system, So that it doesnt start out empty, Giving it a nice kickstart