Careful with BTC loans

[nelruk]

I'm investing in BTCJam since April 2014 and since then I have been realizing several things about how serious are the ways in case that one loan isn't paid or the things about a fake account and sort of. Anyway, last august I decided to put my BTC in a loan agreement (BTCjam Loan No.16654) with the Creditor for a bitcoin loan in the amount of 0.00101 bitcoins at 9.0% interest every 3 days., says my Award.

I know, is a very small amount but considering that other people put almost 0.8, someone realize is not a joke and you wonder what REALLY BTCJam can guarantee;

The answer is: NOTHING[/i] and let me explain this. When someone is in default, your loan goes to a third-party which make arbitrage take care of your case and they send you an award telling you "person A didn't pay you X amount of BTC and he/she should" but the thing is, wherever the loaner is, BTCJam has no power at all to do nothing; remember they just put the platform and they deliver another company to do the arbitrage. When you think, "Ok but I can do something in order to make the company respond, in the e-mail says, (the black is mine):

The mechanics are straightforward and explained here on our website: http://www.net-arb.com/FAQ.php#Enforcement. However there are costs involved in that process that may make it impractical. The costs vary depending on several factors including geography as a main factor since court action must be filed in the debtor's jurisdiction.

It may be possible for co-creditors on a particular loan to join together to pursue collection, but you will have to contact BTCJam Support for information about possible co-creditors since the rules of arbitration prevent us from sharing personal information. We advise you to consult an attorney regarding the feasibility of undertaking any collection action before embarking on that path.

[/i]

This is a particular case because the loaner named Marchenry Hernandez (fake account and person I think) since his first message didn't say a word and...nothing. Other dates are the following:

Covina, CA 91722
United States
marcchernandez@gmail.com
https://www.facebook.com/marcchernandez
Phone: 16268234440
Driver's License D7676407

As conclusion now (YES, NOW) I realized loans with BTC are dangerous because no company (so far) can assure you nothing about your return. But if you do this either and you like to do, be careful in people which you borrow money and be aware that is a real person. I don't speak of my experience with Bitbond because they're more honest: they practically tell you if you don't get paid, we will give you all our info about the guy and do whatever you like to do and is for another post. So far, I believe these practices will have more efectiveness when the time move on and also more people still using criptocurrency.

For me is simple: CAREFUL

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[ytr8]

 i never loaned with my Bitcoin,because no preson or company  can do a guarantee for Bitcoins now.some intermediaries who i don't know many are not to be trusted for  me!

[Window2Wall]

It can actually be more risky to loan very small amounts as you have on BTCjam as they only give you an arbitration award and will not actually attempt to collect delinquent loans on your behalf. This means that you will first need to win arbitration (almost a certainty) and then would need to front the expenses of taking the borrower to court, winning the case and getting judgment (if they have not paid this should not be an issue, however it would be much more complex if they have filed for bankruptcy), and collecting on their assets.

[BayAreaCoins]

Loans and Bitcoins go together about as well as oil and water.


Never make gambling loans. That is a important thing to learn early as well in Bitcoinland.

[odolvlobo]

When you loan someone money, you have to anticipate the possibility that they won't pay you back. A default will wipe out all of your profit, so you can't ignore the possibility.

In your specific case, I would be curious why someone would want to go to the trouble of borrowing 40 cents. That would make me suspicious.

[Window2Wall]

When you loan someone money, you have to anticipate the possibility that they won't pay you back. A default will wipe out all of your profit, so you can't ignore the possibility.

In your specific case, I would be curious why someone would want to go to the trouble of borrowing 40 cents. That would make me suspicious.

Loans on BTCjam are crowd funded. Each person lends a very small amount to make a larger loan. The borrower makes payments to BTCjam (I think) and BTCjam will disburse payments to the lenders' accounts based on how much is owed to them via that loan.

The amount the OP lent was only his portion, the borrower probably had a much larger loan

[Elwar]

At least they lost the collateral that they put up for the loan right?

[Lazlo]

At least they lost the collateral that they put up for the loan right?

I don't think they use collateral on btcjam, just net-arbs rulings afaik

[doof]

Lending something, that the police have no real understanding of, no resources, or any laws around, over the internet to anonymous people isn't the best idea IMO.

[Mewtwo]

Lending something, that the police have no real understanding of, no resources, or any laws around, over the internet to anonymous people isn't the best idea IMO.

And bitcoins that can be mixed to being untraceable.

[miztaziggy]

a bitcoin loan in the amount of 0.00101 bitcoins at 9.0% interest every 3 days.

I'm not sure what you expect to be honest.

The interest rate you charge is supposed to reflect the risk and provide a small profit.

A bank may charge me 5% a year for a few thousand ££ loan as it considers me low risk.

A pay day lender may charge someone the equivalent of 2000% per year as they're a much higher risk. I have read that thousands and thousands of people are in default on these types of loan, but, that's because they're lending to irresponsible people that are high risk.

Charging 9% (compound interest) every 3 days would give you something like 33,000 times your initial investment after a year. If you ask me, that is reflecting a pretty insane risk of non-payment.

So, he didn't pay - what did you expect?

[Jesu]

Btcjam is just a scammers paradise. Build up a bit of feedback then just scam once you get a decent amount. I wouldn't suggest lending anyone you didn't know btc at all.

[pereira4]

Loans and Bitcoins go together about as well as oil and water.


Never make gambling loans. That is a important thing to learn early as well in Bitcoinland.

But, if BTC pretends to be an actual currency, how will loans work? Because loans have to exist, otherwise unless you inherit money, you are out of the game if you want to start a business and whatnot..

[CryptoCarmen]

Loans and Bitcoins go together about as well as oil and water.


Never make gambling loans. That is a important thing to learn early as well in Bitcoinland.

But, if BTC pretends to be an actual currency, how will loans work? Because loans have to exist, otherwise unless you inherit money, you are out of the game if you want to start a business and whatnot..

Loans should work normally. But in this moment you are not legally well covered in most countries. But most important are you wiling to lose 1 BTC fro lets say 10% interests and that BTC will gain 100% value in this time. On my opinion is just not worth the risk. Yes if you loan to someone that is 100% trustful. Basically is same as with loaning anything else with difference that you must not lose your BTC!!!

[Q7]

If only things are as simple as the word 'trust' means. There is no such thing as guarantee. I mean you don't know who is behind that screen. There is no black and white or digital agreement. Even then, if that person defaults what are you going to do? law doesn't apply. Conclusion... for that level of risk, i would rather earn nothing but stay safe with the money

[Pingu]

Loans and Bitcoins go together about as well as oil and water.


Never make gambling loans. That is a important thing to learn early as well in Bitcoinland.

But, if BTC pretends to be an actual currency, how will loans work? Because loans have to exist, otherwise unless you inherit money, you are out of the game if you want to start a business and whatnot..

Bitcoin loans  can work just as well as any other loans, but don't lend money to people who you don't trust or if you arent protected legally. Would you loan money to a masked stranger on the street without a contract? No, so don't do it with btc either.

[UsernameBitcoin]

Many scammers on BTCJam. Don't trust those "verifications". After all, it's gambling.

[Jake Humphrey]

never invest on margin.

[Jamie_Boulder]

Some questions and a little research goes a long way in saving yourself from being scammed.

[chek2fire]

In my opinion bitcoin p2p loan is a great idea but i think BTCjam has to improve customer protection.