How are altcoins collateral

[Bardman]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

Most smaller loans (less the .1 or so) are almost certainly going to be for gambling, (what else could they be for?) I don't think lenders particularly care though as long as they are sufficiently protected with collateral.

Yes. But those who gamble are obviously never gonna use altcoins as collateral

[1713563602]

1713563602

[1713563602]

1713563602

[1713563602]

1713563602

[Quickseller]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

Most smaller loans (less the .1 or so) are almost certainly going to be for gambling, (what else could they be for?) I don't think lenders particularly care though as long as they are sufficiently protected with collateral.

Yes. But those who gamble are obviously never gonna use altcoins as collateral

They would if they both want to gamble on Prime dice (for example) but also have CLAIMS (for example) and think they will increase in value over the corse of the loan

[fildza]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

I actually saw some that said they were going to gamble the loan and still received it, with collateral but still why would anyone loan money to a gambling addict

You just said with collateral. So what the problem if he want gamble ? He have collateral

[Bardman]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

I actually saw some that said they were going to gamble the loan and still received it, with collateral but still why would anyone loan money to a gambling addict

You just said with collateral. So what the problem if he want gamble ? He have collateral

Well i dont know, moral reasons? Like why would you help a gambling addict to gamble?

[Equinoxx]

You can use an exchange to convert the altcoin into Bitcoin / any other cyrpto currencies.
Someone can do whatever they want with their loan, even if they don't pay you back. That is why they have a collateral

[fildza]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

I actually saw some that said they were going to gamble the loan and still received it, with collateral but still why would anyone loan money to a gambling addict

You just said with collateral. So what the problem if he want gamble ? He have collateral

Well i dont know, moral reasons? Like why would you help a gambling addict to gamble?

Well, if he honest want to use the loan for gamble even have collateral of course I will not give but not many people honest today

[Equinoxx]

Most people won't give loans out to people who are suspected of going to gamble with it and quite rightly as you're almost certain to lose it, though I don't doubt some people take loans out under a different story and then gamble with it anyway.

I actually saw some that said they were going to gamble the loan and still received it, with collateral but still why would anyone loan money to a gambling addict

You just said with collateral. So what the problem if he want gamble ? He have collateral

Well i dont know, moral reasons? Like why would you help a gambling addict to gamble?

Well, if he honest want to use the loan for gamble even have collateral of course I will not give but not many people honest today

That's the sad part. And the only way to seem trustworthy is by having a good title below your username

[pawel7777]

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

The only scenario such collateral makes sense is what DAT said.

Imagine you have 100 LTC and you're absolutely sure that LTC price (expressed in bitcoins) will go up, so obviously you want to buy more of them. Selling 100 LTC to buy 100 LTC doesn't make any sense. So it's best to borrow bitcoins (using LTC as collateral), buy more litecoins. When (if) the price goes up, sell LTC, repay the debt and enjoy the profit (+ sell those 100 LTC you got back if you want to).

Simple.

[Bardman]

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

The only scenario such collateral makes sense is what DAT said.

Imagine you have 100 LTC and you're absolutely sure that LTC price (expressed in bitcoins) will go up, so obviously you want to buy more of them. Selling 100 LTC to buy 100 LTC doesn't make any sense. So it's best to borrow bitcoins (using LTC as collateral), buy more litecoins. When (if) the price goes up, sell LTC, repay the debt and enjoy the profit (+ sell those 100 LTC you got back if you want to).

Simple.

Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me

[pawel7777]

Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me

Scenario:

You have 100 LTC and no other funds available

You know for sure that LTC price will go up within 1 week.

What do you do?

[Bardman]

Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me

Scenario:

You have 100 LTC and no other funds available

You know for sure that LTC price will go up within 1 week.

What do you do?

Wait for it to go up? You cant know it for sure so it would be really risky to get a loan. Lets say 100 ltc = 1 btc
So you will get a loan of 1 btc using your 100 ltc as collateral, you will need to pay at least like a 5% of interests so thats 1.05 btc back, the ltc price would have to go up by a lot to compensate all the trouble and the fees so not a really good idea

[pawel7777]

Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me

Scenario:

You have 100 LTC and no other funds available

You know for sure that LTC price will go up within 1 week.

What do you do?

Wait for it to go up? You cant know it for sure so it would be really risky to get a loan. Lets say 100 ltc = 1 btc
So you will get a loan of 1 btc using your 100 ltc as collateral, you will need to pay at least like a 5% of interests so thats 1.05 btc back, the ltc price would have to go up by a lot to compensate all the trouble and the fees so not a really good idea

All true, but this is not a question of whether it's a smart move or not and what's the probability of the price going up.

Providing you know/believe/willing to gamble on price going up (higher than loan interest and related costs), then it makes perfect sense to take such loan. If all works as planned, you'll gain much more than just by holding and selling those 100 LTC alone.

[fildza]

Wait, what you are saying is that someone wants a loan of btc to buy ltc giving his already owned ltc because he believes ltc price will go up? Seems pretty stupid to me

Scenario:

You have 100 LTC and no other funds available

You know for sure that LTC price will go up within 1 week.

What do you do?

But usually we always see people ask for small loan about few 0.05-0-5 btc and I not see people want ask for loan and use altcoin as collateral for expect the price will go up

[activebiz]

some would like to keep the coin as a long term investment. usually the collateral is not of as much value as the loan.

[dragon321]

I've been thinking about the same thing and you're kinda right - altcoins for collateral are... less than ideal. But the thing is that there aren't many good alternatives:
a) no collateral - legit borowers are drowned out by scammers
b) accounts - doesn't really solve the problem with scams
c) rl items - a little inconvenient in most cases

so yeah... if anyone figures out a system that would prevent most scams (you'll never get them all) while still being simple and fast  that person could make some nice money.

[Bardman]

I've been thinking about the same thing and you're kinda right - altcoins for collateral are... less than ideal. But the thing is that there aren't many good alternatives:
a) no collateral - legit borowers are drowned out by scammers
b) accounts - doesn't really solve the problem with scams
c) rl items - a little inconvenient in most cases

so yeah... if anyone figures out a system that would prevent most scams (you'll never get them all) while still being simple and fast  that person could make some nice money.

Accounts as collateral are good if you use escrow of course. Any other digital goods that are easy to sell and their value doesnt change much should be a good collateral

[TwinWinNerD]

You can leverage your holdings this way if you have a good trade in mind.

[SirChiko]

I never understood how would anyone use an altcoin for collateral, i mean if you want 1 btc loan but you have like 100 ltc, why not sell the ltc yourself instead of asking for the loan?

As if you belive that your altcoin will rise in price but you need the btc funds for something, then you borrow the summ in bitcoins and give altcoin in that value as collateral and after you repay it, the borrower will give them back to you.
It's simpler and faster as physical collaterall.

[bitboy11]

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

It's very simple...they are asking for a loan despite the fact that they already have funds available.
They just don't want to risk their own money but hope to turn the loan money into a profit.

[XinXan]

If someone believes the LTC/BTC exchange rate will increase then they would take that loan.

No, what im saying is that if you already have the amount of money you need in altcoins what would be the point of asking for a loan

It's very simple...they are asking for a loan despite the fact that they already have funds available.
They just don't want to risk their own money but hope to turn the loan money into a profit.

That makes no sense because they are giving a collateral thats worth 120% of the loan wich is THEIR money so they are actually risking more money.