BITUSD P2P Lending

[Mako]

looking forward  to it

[Mysto]

Would their be a way to add the variable interest yield of BITUSD into the repayment of the loan?

Actor A lends BITUSD to Actor B. B turn BITUSD into USD. Could those same BITUSD be holded somewhere (multisig?) And then be added to the total ROI?

I have thought about this as well and it doesn't seem possible. The reason is who ever owns the bitUSD is the one who gets the yield. In this case Actor A owns the debt. Actor B owns nothing. Actor C (who ever Actor B gives the money to) is the one who owns the bitUSD which means they are the ones who get the yield.

[RenaudGagne]

Would their be a way to add the variable interest yield of BITUSD into the repayment of the loan?

Actor A lends BITUSD to Actor B. B turn BITUSD into USD. Could those same BITUSD be holded somewhere (multisig?) And then be added to the total ROI?

[xiahui135]

I don't think a p2p lending will work.
the most important thing for lending is credit. But you can not know what kind of person behind the network, especially on a anonymous network like bitcoin or bts network.
but a P2P lending company which accept BitUSD maybe will work.  How you value the customer will rely on traditional way. But you may attract international investors if your P2P lending platform can earn more than those in their own country.

Borrowers can't remain fully anonymous. They have to verify their identity and reveal quite a bit about themselves if they want to take out a loan. Investors on the other hand can remain as anonymous as they want.

Yes, i agree with you. The investors may keep anonymous, and this is a convenient way for international investors.

[Mysto]

I don't think a p2p lending will work.
the most important thing for lending is credit. But you can not know what kind of person behind the network, especially on a anonymous network like bitcoin or bts network.
but a P2P lending company which accept BitUSD maybe will work.  How you value the customer will rely on traditional way. But you may attract international investors if your P2P lending platform can earn more than those in their own country.

Borrowers can't remain fully anonymous. They have to verify their identity and reveal quite a bit about themselves if they want to take out a loan. Investors on the other hand can remain as anonymous as they want.

[xiahui135]

I don't think a p2p lending will work.
the most important thing for lending is credit. But you can not know what kind of person behind the network, especially on a anonymous network like bitcoin or bts network.
but a P2P lending company which accept BitUSD maybe will work.  How you value the customer will rely on traditional way. But you may attract international investors if your P2P lending platform can earn more than those in their own country.

[rgcrypto]

Here is what okcoin does on their exchange!

http://www.coindesk.com/okcoin-offers-p2p-lending-international-users/

[Mysto]

I get it Mysto. Now since I am no dev and would like to promote bitusd, do you think they could take BITUSD off the shelf right now and start using it on their website without a new bitshare blockchain?

Yes but not in the way I talked about. What I mean is they could use bitUSD for its stability but as far as I know they can't use the bitshares blockchain as a ledger for who owns what loan. They could definitely use bitUSD right now if they wanted without a problem.

Since you are more on the marketing side you should consider registering at http://forum.nullstreet.com/. It's the "super secret" bitshares marketing forum which I think would suit you.

[RenaudGagne]

I get it Mysto. Now since I am no dev and would like to promote bitusd, do you think they could take BITUSD off the shelf right now and start using it on their website without a new bitshare blockchain?

[Mysto]

To me, btcjam and the like are probably hurting from bitcoin price volatility. BITUSD could solve their problem and benefit BitShares by growing the market cap.

Since I am a marketer(and not a dev), it would be my first instinct. Now I don't know if BITUSD can support it.

Are you interested personally in starting something like a BitsharesLend Mysto or are you  more interested in growing the market cap?

Yes bitUSD could easily handle that. I think you are misunderstanding me.


Allow me to quote a section of the Bitshares Music Paper to help clarify.

2.2.0 PeerTracks
The first front end to use the BitShares Music technology will be the PeerTracks website. Allowing for a user friendly way for artists to harness the true power of their fans through incentivized, peer 2 peer, talent discovery. Hence, BitShares Music and PeerTracks are two separate, independent entities. PeerTracks uses the BitShares Music blockchain and adds value to the network just as Bitpay uses the Bitcoin blockchain and adds value to that. One does not own the other. If PeerTracks were to disappear, or get shut down, this would not affect the BitShares Music blockchain anymore than Bitcoin would be affected if Bitpay was shut down. It would go on as long as transactions are processed. Other front ends could pop up, whether it be websites, apps, desktop clients, etc. PeerTracks does not have a monopoly on who gets to be the front end for the blockchain. There could be dozens or hundreds of websites all bringing in value and volume to BitShares Music.

So you see it's not Bitshares Lend or btcjam or bitlendingclub, it's Bitshares Lend and btcjam and bitlendingclub.
Bitshares Lending is the blockchain (the public ledger of who owns what).
Btcjam and bitlendingclub are the "storefronts" that rely on the blockchain.
Bitshares Lending makes money when a transaction takes place (for example someone trading a loan)
Btcjam and bitlendingclub make money by issuing the loans.

This is all of course assuming we could convince btcjam and bitlendingclub to use Bitshares Lend.
Also remember that as I said before we don't need to create a new blockchain (Bitshares Lend) we could just use the Bitshares blockchain but that is up to the devs and the community.

Hope this clarifies. Here is a link to the paper if you still don't understand...
https://bitsharestalk.org/index.php?topic=9360.0

[RenaudGagne]

If we can figure that out we could compete with them pretty easily.

Actually I take that back. If you think of Bitshares Lend like Bitshares Music then BTCJam could be what PeerTrack is to Bitshares Music. In other words BTCJam could be just another "storefront".

Edit: Same goes for bitlendingclub.

To me, btcjam and the like are probably hurting from bitcoin price volatility. BITUSD could solve their problem and benefit BitShares by growing the market cap.

Since I am a marketer(and not a dev), it would be my first instinct. Now I don't know if BITUSD can support it.

Are you interested personally in starting something like a BitsharesLend Mysto or are you  more interested in growing the market cap?

[Mysto]

If we can figure that out we could compete with them pretty easily.

Actually I take that back. If you think of Bitshares Lend like Bitshares Music then BTCJam could be what PeerTrack is to Bitshares Music. In other words BTCJam could be just another "storefront".

Edit: Same goes for bitlendingclub.

[RenaudGagne]

http://blog.bitlendingclub.com/2014/05/

[RenaudGagne]

Actually btcjam is not as good as bitlendingclub.com . They may get in trouble with trademarks in the future though...

They have a descent size blog that can give insights about how it works under the hood.

[Mysto]

Do you think I can approach https://btcjam.com and others like that with BITUSD? Can BITUSD support it?

That is very interesting. I wonder how they are able to issue loans everywhere like that (legally). I'll have to do more research when I have time.
If we can figure that out we could compete with them pretty easily.

https://btcjam.com/stats

[RenaudGagne]

Do you think I can approach https://btcjam.com and others like that with BITUSD? Can BITUSD support it?

[RenaudGagne]

Wow! That's a really interesting discussion.

It would bring a lot of attention to bitassets.

Do you think their would be an interest in diversifying in currencies(bitcny/bitusd) or do it with a smart wallet type where the currency is automatically converted?

[bitsapphire]

That is mainly where I come from.  I am in Canada and there is no way for me to get into it.

To make it international, there could be an internal credit score rating. Dont know how that would work though.

Yea I would love to diversify my consumer debt across multiple countries. If one country gets hit harder than other countries I won't be effected as much. I don't think creating an internal credit score rating would be the biggest of our worries because most countries have a good way of determining credit worthiness and all of the methods are pretty similar.

I think a bigger problem is that lending laws are different in every country (not only that but they can be different in different regions of the country). For example lending club is still trying to become legal in every state. There are p2p lending companies establishing themselves in many countries. The good news is we can walk in their foot steps.

Good point. I think separate traditional local institutions and companies might pop up in different jurisdictions around the world and become Bitshares gateways, that way they can comply with the local laws and KYC/AML laws. Furthermore Verisign-like identity certification and verification companies specifically for the blockchain might pop up for people who want to fulfill the legal requirements to invest in different jurisdictions. Investing and diversifying would become a matter of accepting different terms with a few clicks.

I think Kiva is already dong their lending similarly.  They collect and transfer the money worldwide to different locally certified microlending institutions who look after the disbursement and potentially collateralization requirements. This might be a huge business model.

[Mysto]

My only concern is that once bitUSD achieves close parity due to higher yields, the lower bound of interest creditors will accept on the market will be the effect annual bitUSD yield, pushing large debtors such as companies out of the P2P lending network, effectively slowing down the DAC expansion.

How high do you expect the yields to be on bitUSD?

Grade A loans make an average of 4.5% profit (if I remember correctly) and the interest charged is around 8%.
So this means that bitUSD yield would need to be around 7% because investors always think they can beat the average by picking A grade loans with their strategy. BitUSD yield would need to be around 5% to compete with the super low interest loans (~6% interest).

Also another thing is bitUSD yield is relatively safe but not guaranteed to be stable. So this could be another way to diversify.

[Mysto]

Do you mean it shouldnt be a separate software? I would like to know more about why it would be better.

The main reason is creating a DAC like (let's call it) Bitshares Lend would require a huge amount of resources. It would also split the community because the bitUSD from Bitshares would compete with the bitUSD from Bitshares Lend. So not only would their bitAssets compete but also they would compete for resources. At least that is one theory. Maybe it would be a good idea to keep them separate.

That is mainly where I come from.  I am in Canada and there is no way for me to get into it.

To make it international, there could be an internal credit score rating. Dont know how that would work though.

Yea I would love to diversify my consumer debt across multiple countries. If one country gets hit harder than other countries I won't be effected as much. I don't think creating an internal credit score rating would be the biggest of our worries because most countries have a good way of determining credit worthiness and all of the methods are pretty similar.

I think a bigger problem is that lending laws are different in every country (not only that but they can be different in different regions of the country). For example lending club is still trying to become legal in every state. There are p2p lending companies establishing themselves in many countries. The good news is we can walk in their foot steps.

I am not familiar with notes. I would love to learn more about that.

Sure, basically the way it works is you have an investor and a borrower. Let's say there is a borrower who wants $30,000. Once they get accepted by lending club their loan, credit score and other information (only info that is needed nothing that gives away their ID) gets publish so investors can see it. Investor have the opportunity to invest in increments of $25. Once the investor has given the borrower money he/she has created a note. So notes can be worth $25 or $3,500, whatever that particular investor gave them. I think the limit is 50% of the loan but I'm not sure, I've never tried.

Personally I only ever create $25 dollar notes but still invest $200 per person (so I create 8 $25 notes). The reason I do this is because notes can be sold and it's much easier to sell a $25 note than it is to sell a +$200 note.

Sorry if any of that confused you I'm not very good at explaining things.

[RenaudGagne]

I think if we could we should leave it on the bitshares blockchain and not create a new DAC.

Do you mean it shouldnt be a separate software? I would like to know more about why it would be better.

We could allow users from around the world to trade loans among each other as well as issue a loan to someone in a different country.

That is mainly where I come from.  I am in Canada and there is no way for me to get into it.

To make it international, there could be an internal credit score rating. Dont know how that would work though.

We could allow people to trade notes (loans) for almost nothing. Right now it's 1% to trade notes which is very high.

I am not familar with notes. I would love to learn more about that.

PS You have the same first name (Renaud) as the CEO of Lending Club... coincidence?
I think not! lol

Haha, I didnt know! Guess there is no coincidence.

[RenaudGagne]

My only concern is that once bitUSD achieves close parity due to higher yields, the lower bound of interest creditors will accept on the market will be the effect annual bitUSD yield, pushing large debtors such as companies out of the P2P lending network, effectively slowing down the DAC expansion.

It would make sense since the interest rates for very safe loans would compete with the yield of BITUSD.

But we must realize that we live in a very artificially low interest rates environment. In time of higher interest rates (we can only go up from here) this DAC may end up being a good place for safe loans. (When prime goes around 7% or more.

[bitsapphire]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.

Once the scripting language is up the way I would approach this is IOU tokens (like bonds) + external credit rating feeds. As a debtor you issue your IOUs to your creditors through crowdfunding. The debtor gets the bitUSD, the creditors get tradable IOUs. Some people or even contracts might even split and repackage the IOUs. The lenders decide whom to trust based on the external credit score data feed, which later can be modified and replicated internally on the DAC.

My only concern is that once bitUSD achieves close parity due to higher yields, the lower bound of interest creditors will accept on the market will be the effect annual bitUSD yield, pushing large debtors such as companies out of the P2P lending network, effectively slowing down the DAC expansion.

[Mysto]

What could be different?  People can OWN shares in the DAC to add to their portfolio? Earn interest if no position is taken (bitusd yield)?

I think if we could we should leave it on the bitshares blockchain and not create a new DAC.

Owning shares would be unique if Lending Club didn't start trading on the NYSE 2 weeks ago...
https://www.google.com/finance?cid=291564398667183

International in a way the gov can't regulate too much? Multi-currency?

Yea that is one thing that could help us stand out. We could allow users from around the world to trade loans among each other as well as issue a loan to someone in a different country.

Other things that might help us stand out are...
We could allow people to trade notes (loans) for almost nothing. Right now it's 1% to trade notes which is very high.
From what I remember it takes a while to trade note (I think it was 3-4 days). We could do it in a matter of seconds.

PS You have the same first name (Renaud) as the CEO of Lending Club... coincidence?
I think not! lol

[RenaudGagne]

The Devs hang around the forum all the time.   This is something we could really use some help figuring out how to market.

I don't think marketing this would be very hard at all. Everyone is always looking for a loan and word of mouth will help quite a bit.



The funny thing is they used a referral program back around 2012-2013 as part of marketing. Now I think they are just using word of mouth and targeted ads across the internet, as well as new stories/articles.

Also as I mentioned in the other post regulation shouldn't be a huge problem. Lending Club is slowly but surely taking care of regulation.

The biggest problem I see is what do we offer that is different/more appealing. We can't just mirror everything that Lending Club does and expect to succeed. We need something that separates us from the crowd. Personally I don't think the fact that we are decentralized is going to help with that aspect very much.

Great points. Usually companies with minimal marketing budget starts with boosted word of mouth (referral) and then move towards search ads.

Still,  the unique selling proposition must be crystal clear and the website has got to convert visitors into customers.

What could be different?  People can OWN shares in the DAC to add to their portfolio? International in a way the gov can't regulate too much? Multi-currency? Earn interest if no position is taken (bitusd yield)?

[Mysto]

The Devs hang around the forum all the time.   This is something we could really use some help figuring out how to market.

I don't think marketing this would be very hard at all. Everyone is always looking for a loan and word of mouth will help quite a bit.



The funny thing is they used a referral program back around 2012-2013 as part of marketing. Now I think they are just using word of mouth and targeted ads across the internet, as well as new stories/articles.

Also as I mentioned in the other post regulation shouldn't be a huge problem. Lending Club is slowly but surely taking care of regulation.

The biggest problem I see is what do we offer that is different/more appealing. We can't just mirror everything that Lending Club does and expect to succeed. We need something that separates us from the crowd. Personally I don't think the fact that we are decentralized is going to help with that aspect very much.

[bytemaster]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.

https://bitsharestalk.org/index.php?topic=9806.0

Good addon to the conversation.  Is there a Dev someone could refer me to?

Im a marketing strategist and this is a project I would like to sink my teeth into.

The Devs hang around the forum all the time.   This is something we could really use some help figuring out how to market.

[biophil]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.

Would the purpose of this be to enter into true unrestricted short positions on bitAssets?

Sent from my SCH-S720C using Tapatalk 2

[RenaudGagne]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.

https://bitsharestalk.org/index.php?topic=9806.0

Good addon to the conversation.  Is there a Dev someone could refer me to?

Im a marketing strategist and this is a project I would like to sink my teeth into.

[Mysto]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.

https://bitsharestalk.org/index.php?topic=9806.0

[RenaudGagne]

I get it now. It would be closer to a p2p bond market?

[RenaudGagne]

Thank you @bytemaster I didnt make the distinction between collateralized and uncolaterized. (Will look into it)

[BTSdac]

yes , base on block technology , many services can been supply base on BTS
great way  . people can use lend bitsud to company  and get interest

[bytemaster]

Collateralized lending is planned for BTS.   Unfortunately, what most people want is uncollateralized, trust-based lending.  For the uncollateralized model to work you need a global ID / reputation system and that is under development for BTS.   

[RenaudGagne]

Hey Everyone,

Fairly new here but having a blast. I have been interested in p2p lending for a while but in Canada, too much regulations makes it impossible.

How can we do this as a DAC?

Also, talking about the economics of it would be interesting too(BITUSD / BITGOLD ?). Jump into the discussion if you like the idea.