[FULFILLED!] 10,000 BTC loan - LONG TERM

[yochdog]

Just wanted to drop a line to everyone following this loan with curiosity.

The first payment was made last week.  We actually changed the terms to monthly payments, at the request of the lender. 

Also, the principal amount was bumped to 11,000 BTC.

Just FYI.  I am absolutely stoked by the implications of large BTC lending like this. 

Translation: "brb, buying a 600cc motorcycle"

lol.....fun, but no.  Went to a much more profitable use than that!   

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[yochdog]

Just a quick update for those of you following this loan with curiosity:

I recently made the July payment (early obviously), and the next payment is not due until August.  My intent is to continue paying down the loan quickly, as I anticipate the exchange rate and difficulty to keep climbing.  The announcement of the BFL SC has also got me a little worried. 

On a related note, the hedges I had set up at Bitcoinica worked great......until Bitcoinica went tits up.  Now, I am not only denied the hedge as BTC continues the move upward, I am also waiting on a refund of 100's of BTC I had on deposit.  Any ideas on where to go in order to structure another hedge would be appreciated!

regards,

-Yochdog

[copumpkin]

On a related note, the hedges I had set up at Bitcoinica worked great......until Bitcoinica went tits up.  Now, I am not only denied the hedge as BTC continues the move upward, I am also waiting on a refund of 100's of BTC I had on deposit.  Any ideas on where to go in order to structure another hedge would be appreciated!

Sorry to hear that, and I hope you get your money back soon. Honestly, I'd just look for some kind of OTC contract with savvy people around here or on IRC. You get much more precise control over your terms. If it's big enough, you might want to mail a physical contract, but otherwise a GPG-signed contract would be sufficient to destroy someone's WOT reputation if they screw you (of course, you'd only want counterparties with high reputations to begin with, so they have something to lose there).

I've been doing GPG contracts for a while with people on #bitcoin-otc and have some fairly large and valuable contracts arranged that way.

Edit: by GPG contract, I mean a text file explaining all the terms and the parties involved that is signed using GPG by all parties.

[memvola]

On a related note, the hedges I had set up at Bitcoinica worked great......until Bitcoinica went tits up.  Now, I am not only denied the hedge as BTC continues the move upward, I am also waiting on a refund of 100's of BTC I had on deposit.  Any ideas on where to go in order to structure another hedge would be appreciated!

One of the options platforms maybe?

[brendio]

On a related note, the hedges I had set up at Bitcoinica worked great......until Bitcoinica went tits up.  Now, I am not only denied the hedge as BTC continues the move upward, I am also waiting on a refund of 100's of BTC I had on deposit.  Any ideas on where to go in order to structure another hedge would be appreciated!

Sorry to hear that, and I hope you get your money back soon. Honestly, I'd just look for some kind of OTC contract with savvy people around here or on IRC. You get much more precise control over your terms. If it's big enough, you might want to mail a physical contract, but otherwise a GPG-signed contract would be sufficient to destroy someone's WOT reputation if they screw you (of course, you'd only want counterparties with high reputations to begin with, so they have something to lose there).

I've been doing GPG contracts for a while with people on #bitcoin-otc and have some fairly large and valuable contracts arranged that way.

Edit: by GPG contract, I mean a text file explaining all the terms and the parties involved that is signed using GPG by all parties.

PM sent.

[brendio]

On a related note, the hedges I had set up at Bitcoinica worked great......until Bitcoinica went tits up.  Now, I am not only denied the hedge as BTC continues the move upward, I am also waiting on a refund of 100's of BTC I had on deposit.  Any ideas on where to go in order to structure another hedge would be appreciated!

One of the options platforms maybe?

I reckon that's be quite an expensive way to hedge over 5 years, with the constant need to roll over contracts from month to month.

[yochdog]

Another update for those of you following this loan:

The 6th payment was made today, well ahead of schedule.  The next payment is not due until November, but my intent is to continue aggressively paying down the loan to lessen the effects of any further price increases. 

I have already taken a f**king bath with BTC/USD near doubling since the loan origination....I cannot express how furious I am with Bitcoinica at this point. 

Oh well, a risk I knew up front. 

[Clipse]

At this rate and what I expect BTC would grow to over 60months and also taking note with difficulty increases, I suspect you would be repaying >200% interest on this over 60months, hard luck ouch.

[yochdog]

At this rate and what I expect BTC would grow to over 60months and also taking note with difficulty increases, I suspect you would be repaying >200% interest on this over 60months, hard luck ouch.

And just as easily we could repeat the crash of last fall, then I get paid to have borrowed money.  Also, did you not notice the accelerated payments?  I am not holding this thing for 60 months.  Not even close. 

None of us has a clue how all of this will turn out.

[yochdog]

Another quick update regarding this loan:

Both the November and December payments have been made, and the next payment is not due until January, 2013. 


On a side note, given the fiasco that is Pirateat40 and BTCST, perhaps it is time for lenders to be a bit more discerning in their lending and have more reasonable return expectations.  Someone offering 3,300% APR is either gambling with your money or has no intent to pay it back.

People bitch, moan, and attack me for the fact that I only offer 10% to my lenders.  Wake up people.....that is a reasonable rate.  Expecting more is silly and an invitation for scammers. 

Example:  "Fuck you, I will never lend money at 10%!  Oh, this guy will offer me 2,000% per annum.....hell yes, take my money!" 


A scammer is going to offer whatever it takes to part you from your funds.  To compare those rates with a loan that will ACTUALLY BE PAID BACK is the height of ignorance. 

Just my .02 bitcents. 

[markm]

This is indeed awesome.

However it has occurred to me... and this actually is not really to do with you at all (or let us say, one surely hopes it is not)... how easy it could be for someone to just make stuff like this up. It'd be even better than pirateat40's bunch of OTC ratings of 10, it might never even occur to people to think anyone would make this stuff up.

SO I do hope that someday the big fish who made the loan does 'fess up, or something, so the next big scammer doesn't get to point at this great story to "prove" how "legit" his or her own great backstory is...

Again, I am not at all suspicious of this story.

It is the next one I am worried about...

-MarkM-

[yochdog]

This is indeed awesome.

However it has occurred to me... and this actually is not really to do with you at all (or let us say, one surely hopes it is not)... how easy it could be for someone to just make stuff like this up. It'd be even better than pirateat40's bunch of OTC ratings of 10, it might never even occur to people to think anyone would make this stuff up.

SO I do hope that someday the big fish who made the loan does 'fess up, or something, so the next big scammer doesn't get to point at this great story to "prove" how "legit" his or her own great backstory is...

Again, I am not at all suspicious of this story.

It is the next one I am worried about...

-MarkM-

I can understand that.  The lender is very well known on the forums, and has been part of Bitcoin since long before many of us even heard of it. 

I asked if I could identify him publicly, but he prefers to stay anonymous.  I am guessing that is in part to avoid the deluge of requests that would flow his way should people know he can lend such amounts. 

Fortunately for most deals that go down around here, both parties confirm it and the results are known to all. 

[nimda]

I hate to say it, but we need something like Bitcoinica. You could have taken out a long and been fine when USD/BTC doubled, and I could have taken out a short and been covered when BTC dropped from 15 to 8 (For the record, I actually sold at 15, but holding BTC does make me want to hedge a bit.)

[yochdog]

I hate to say it, but we need something like Bitcoinica. You could have taken out a long and been fine when USD/BTC doubled, and I could have taken out a short and been covered when BTC dropped from 15 to 8 (For the record, I actually sold at 15, but holding BTC does make me want to hedge a bit.)

 

I used Bitcoinica to hedge this loan, and now I have nothing to show for it.

It still hurts.....

[markm]

Hmm, I had been thinking that my Long+Short baskets idea would not have worked for this due to needing as much bitcoin as one was trying to hedge, which in this case would have been as much as one borrowed.

But it just struck me... what was really used out in the world was fiat, not bitcoin. So maybe a BTCslUSD basket type of thing could have been useful. Buy the baskets, sell the long on fiat piece, hold the short on fiat piece. That would leave you short on fiat, which is basically what borrowing fiat amounts to.

This stuff still confuses me though so maybe that is totally wrong/confused view of it... Maybe exactly the wrong way around?

-MarkM-

[zebedee]

The problem is that 10% is very low for a such loan. I have 7.5-7.8% bonds that are much safer investment than you.

Where did you get these bonds! I need to buy some...

Well, let's start with sovereigns.  Let me introduce you to Portugal and Greece, you may have heard of them

For corporates, there are so many bonds yielding 10+% that I'd guess you don 't know much about bonds....

Many companies would kill to borrow at 10% from a bank, at any-time call.

[yochdog]

The problem is that 10% is very low for a such loan. I have 7.5-7.8% bonds that are much safer investment than you.

Where did you get these bonds! I need to buy some...

Well, let's start with sovereigns.  Let me introduce you to Portugal and Greece, you may have heard of them

For corporates, there are so many bonds yielding 10+% that I'd guess you don 't know much about bonds....

Many companies would kill to borrow at 10% from a bank, at any-time call.

I do not think I would call Portugal/Greek bonds a very attractive credit risk.  The chances of you being de-valued are very high. 

Also, most publicly traded companies can currently borrow at sub-4%......plus they get a tax write-off for the interest. 

10% corporate lending would be laughed out of the building. 

[zebedee]

Well, let's start with sovereigns.  Let me introduce you to Portugal and Greece, you may have heard of them

For corporates, there are so many bonds yielding 10+% that I'd guess you don 't know much about bonds....

Many companies would kill to borrow at 10% from a bank, at any-time call.

I do not think I would call Portugal/Greek bonds a very attractive credit risk.  The chances of you being de-valued are very high.  

Also, most publicly traded companies can currently borrow at sub-4%......plus they get a tax write-off for the interest.  

10% corporate lending would be laughed out of the building.  

Of course they're not attractive.  That's why the rates are high!  Not sure about the meaning of "you being de-valued" is - defaulted on, sure - if you mean currency devalued, then they can only redenominate debt under domestic law.  Much of it is international law, or in a foreign currency in the first place.

There are many companies borrowing at or yielding over 10% in the corporate bond market, as you would know if you knew anything about it.

[yochdog]

Well, let's start with sovereigns.  Let me introduce you to Portugal and Greece, you may have heard of them

For corporates, there are so many bonds yielding 10+% that I'd guess you don 't know much about bonds....

Many companies would kill to borrow at 10% from a bank, at any-time call.

I do not think I would call Portugal/Greek bonds a very attractive credit risk.  The chances of you being de-valued are very high.  

Also, most publicly traded companies can currently borrow at sub-4%......plus they get a tax write-off for the interest.  

10% corporate lending would be laughed out of the building.  

Of course they're not attractive.  That's why the rates are high!  Not sure about the meaning of "you being de-valued" is - defaulted on, sure - if you mean currency devalued, then they can only redenominate debt under domestic law.  Much of it is international law, or in a foreign currency in the first place.

There are many companies borrowing at or yielding over 10% in the corporate bond market, as you would know if you knew anything about it.

ROFL.  You just popped off to a guy who has his CFA charter, his CPA, and runs a financial firm with 500 million under management. 

Obviously I don't know anything about it. 

[zebedee]

ROFL.  You just popped off to a guy who has his CFA charter, his CPA, and runs a financial firm with 500 million under management. 

Obviously I don't know anything about it. 

Don't want to get in a pissing match but my career was in the global bond markets.  So yes, it's clear you don't know anything about it.