What is acceptable collateral?

[slu2]

Is there a list of acceptable collateral?

I have saw some people offer up domain names, and I have saw people ask for alt-coin to secure a loan (doesn't seem like a real likely solution).   So what are the acceptable forms of collateral?  I suppose this is a case by case thing.  So what do you as a lender accept as collateral? 


Has anyone found a way to make vehicle titles work as collateral for coin?   Is there a standardize form or agreement?  How is that delegated?

What about a lien on property?   Has that ever taken place before?  If so how?
I would suspect a title company would have to be involved to attain title insurance, and then possibly a standard agreement that included the wallet addresses for both the borrower and the lender for issuance and repayment, and all of the aspects of the agreement included in writing.  I've used RocketLaywer.com before, and their agreements are customizable, and of course you can always include an addendum.

If there is a topic that is already started for this, please point it out to me.  Thanks!

[ncsupanda]

From the man himself, in the sticky listed here:
https://bitcointalk.org/index.php?topic=577765.0

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).
- 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.  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 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 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 negative trust from "OldScammerTag" are likely to get you negative-trusted by other users, like me.  

[slu2]

From the man himself, in the sticky listed here:
https://bitcointalk.org/index.php?topic=577765.0

All of that errors on the side of safety, it sounds like a really good outline.  But I don't suspect anyone would give alt-coin in exchange for bitcoin, as selling altcoin for bitcoin is much easier.    Its like someone loaning cash for cash.    "I have $150 worth of USD, I will let you hold on to my $150 for your $150 worth of Canadian dollar loan"  WTF?    That's like those stupid "secured credit cards", borrowing against your own money?  I've never understood that.

But I hope some day there is a way to utilize titles and deeds with bitcoin lending.   So far I haven't came across a good solution for that.

Thanks for your response

[haploid23]

Since alt coin collateral is not your thing, ship something small but valuable. The more liquid it is, the better collateral it's considered as. For example, a small artifact might potentially have high value, IF you can find the right buyer. But that's the problem, it might be hard to find someone to buy. Now if you provided a newest release iphone, everyone and their mom wants one, so it can easily be sold in worst case scenario. Same with precious metal, it's easily sold.

Be creative. But just note, this is not an excuse to be stupid either.

[QuantumLeap]

I think the most acceptable collateral is altcoin. But recently many new lenders are accepting bitcointalk accounts as collateral.

[Vod]

I think the most acceptable collateral is altcoin. But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

[QuantumLeap]

I think the most acceptable collateral is altcoin. But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

But I'm sure accounts has value to this lenders.

Spodermen
Bitcoins101
Candystripes
s1lverbox
Quickseller
alesx.onfire
marcotheminer
ndnhc

[haploid23]

But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

But I'm sure accounts has value to this lenders.

-snip-

Just because some accept accounts as collateral doesn't mean it's good collateral. If I were to give up my account as collateral to get a loan, then sign an address to recover the account, then quickly sold off the account, I would have the funds from the loan and the funds from sold account. What are you going to do?

Personally, anyone that requests a loan from me and offers an account as collateral, automatically gets denied. They'd have a better chance of getting the loan without collateral than to offer an account. When you offer an account, that means you have no respect for you own account and probably wouldn't mind ditching it either. I mentally check these people off as untrustworthy.

[Quickseller]

I think the most acceptable collateral is altcoin. But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

It takes time to create an account (you cannot become a Legendary member overnight) so it would not be accurate to say that it costs nothing. Accounts are valued via Proof of Posting and Proof of number of weeks at least one post has been made so to speak.

The reason accounts have value is because of signature campaigns. They allow the owner of an account to generate some level of revenue (without scamming). I can say that the business of trading accounts is very profitable.

@ haploid23 - theymos has publicly said (on reddit) that account recoveries are a very low priority, that he needs to conduct an investigation as to if the person claiming to own the account is the actual owner and somewhat implied that this is a more complex process then simply verifying a signed message.

EDIT: Also if all you use is an account's reputation to make sure a loan gets repaid then the only incentive for a person to repay the loan is their ability to continue to borrow in the future. You do have some honest players in the bitcoin world but they are few and far between. If you were to open a scam accusation against someone when they don't pay you back then all that can happen is they get negative trust. The negative trust is not even visible in most of the boards on the forum. Negative trust would prevent them from likely being able to scam in the future, but they could still trade as they can use escrow (which is free) and I don't see escrow reallocating goods/funds just because it is claimed that an account owes someone else money. If you take an account as collateral then you have something of value that you can attempt to sell in the future.

[slu2]

I can see a bitcointalk account being very valuable and useful.  That makes sense. 

These are all good ideas.     I have been looking all night for a potential that there is a bitcoin title company out there.

Maybe I should put one of those together.   

[slu2]

You know, like a Bitcoin Title Loan type of company. 

Contact me if you are interested.   I think I can make this work, with the right time and some additional financial backing.
If Payday and Title loan companies can loan money on a small scale, without too much red tape, there has to be a way to legitimately make a bitcoin title loan company. 

[MickGhee]

You know, like a Bitcoin Title Loan type of company. 

Contact me if you are interested.   I think I can make this work, with the right time and some additional financial backing.
If Payday and Title loan companies can loan money on a small scale, without too much red tape, there has to be a way to legitimately make a bitcoin title loan company. 

itys actually a good idea

[elitenoob]

I think the most acceptable collateral is altcoin. But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

There is always some value, because there are campaigns that can be joined with certain ranks, or they can be used to scam other people...

[slu2]

itys actually a good idea

This should be pursued.  I will continue to do my due diligence, and I will put a business plan together.

Anyone interested, we could for a corp, issue stock, etc.    All hypothetical, but let me do some more research.

Anyone who is interested send me a PM.   Due your own research.   Im willing to invest in this if we can hammer out the fine details.

[jonald_fyookball]

But recently many new lenders are accepting bitcointalk accounts as collateral.

A bitcointalk account as collateral is a joke, imo.  It costs nothing to create, so what value does it have?   Are people willing to jump off a bridge just because I, a LEGENDARY member, ask them to??

But I'm sure accounts has value to this lenders.

-snip-

Just because some accept accounts as collateral doesn't mean it's good collateral. If I were to give up my account as collateral to get a loan, then sign an address to recover the account, then quickly sold off the account, I would have the funds from the loan and the funds from sold account. What are you going to do?

Personally, anyone that requests a loan from me and offers an account as collateral, automatically gets denied. They'd have a better chance of getting the loan without collateral than to offer an account. When you offer an account, that means you have no respect for you own account and probably wouldn't mind ditching it either. I mentally check these people off as untrustworthy.

I agree.  personally I would never sell my account unless someone offered me an ungodly sum for it.

[bitbunnny]

What do you consider ad an ungodly sum?

[jonald_fyookball]

dunno but I wouldn't sell my account for $1000. that's for sure.

[elitenoob]

dunno but I wouldn't sell my account for $1000. that's for sure.

quoted, so you would sell it at all

[jonald_fyookball]

dunno but I wouldn't sell my account for $1000. that's for sure.

quoted, so you would sell it at all

If someone offered you enough money you would sell yours too.  I wouldn't sell mine for anywhere near market value was my point.  
Not sure what you're implying, but please don't invert what I said.

[slu2]

What is market value for an account?  I've never saw one bought or sold, Ive heard stories though.

I prefer to deal with people who have atleast gone through the trouble of verifying their identity


https://ardeva.com/login/verifications/