Is P2P lending a predictor of a challenging future for Bitcoin?

12/29/2015 05:35:00 pm Unknown 0 Comments

So this morning I woke up asking myself this simple question, If Bitcoin achieves mass adoption, how would we solve the problem of ever increasing debt?

This blog post is more the ramblings of a crazy man than a scientific theory, but bear with me as I elaborate.

I have been investing in p2p lending sites for almost 2 years now, and constantly been running into the same problem........ There is no rule of law. This means that people can borrow money and not pay it back with nothing to stop them except a loss of reputation, which is not always tied to a real human being anyway.
I often have told myself that this is fine and it's the way the world should work, in this way we can weed out the bad lenders and too much borrowing would naturally correct itself as lenders are more careful of who they lend to. But is this a good thing? And is this the only solution a market would find?
What has upset me about the situation with non-paying borrowers is the way lenders sometimes become very aggressive in their comments about them, you will frequently see the term 'scammer' being used for anyone who decides they are not willing to pay a loan back. Granted often these people never intended to pay back the loan, so the label is correct, but the blanket aggression is worrying. I've also seen individual lenders hoping that non paying borrowers get arrested and thrown in jail and things as extreme as that.



This has lead me to wonder, how much will the lenders, who after all are just regular humans like me or you (perhaps), exploit the borrowers and what types of laws or rules will be introduced regarding the non payment of P2P loans. Currently the world only functions because new money is created to pay down old debt, but with Bitcoin that's simply not possible, so what would be the alternatives?
furthermore, who would be incharge of these laws, given the international nature of the internet?

I'm sure someone will correct me, but wasn't this the problem that lead to interest being outlawed under the 'usery' laws in days gone by when Gold was used as money?

Most of the sites impose a fixed interest rate based on the users credit rating, but this is also wrong for so many reasons and instantly kills the short term loan market on any platform that introduces it.

So what is the answer? How can we lend to each other without asking the borrower to put up their liberty as collateral? QE is a dirty word in Bitcoin circles, but without it, is it possible for our money to work for us all?

Let me know your thoughts in the comments below,

also check out my new site when you get a chance, and keep your ears peeled for more information about AdFete, It's a reallly interesting new project I'm currently working on.

www.cryptosi.com

My predictions for 2016

10/19/2015 09:45:00 am Unknown 0 Comments

2016 in Bitcoin

I think Bitcoin's killer app is Equity Crowdfunding, I heard Vinay Gupta equate investing in a startup to buying a lottery ticket, so when investments can be a small as 10p then you have a nice place for people to gamble on companies legally. 

My Predictions for 2016 :
1) Augur Becomes a BIG player despite Ethereum making little headway,
2) NXT becomes Bitcoin's main rival purely down to its asset exchange and products developed from it.
3 )Shapeshift.IO takes Bitcoin to a much bigger userbase by consolidating the value of Altcoins
4) The fiat world continues to print money
5) England get knocked out at the group stages of the Euros despite winnning all the qualifiers
6) Mainstream media tries to convince the west to go to a war with Russia. Nobody agrees
7) Banks are exposed of corruption in a huge scandal, nobody goes to jail
8) Counterparty continues to exist, People Continue to overlook it. Nobody cares
9) Someone decides to sell equity in a documentary via Blockchain tech.
10) Bitcoin price doubles slowly up to $500+ (takes a big jump when halving occurs)

So there you have it, all these will become a reality, I'm going to try to produce videos next year, I've been planning it for some time now and never gotten around to it.

Feel free to share your predictions in the comments section below.

Top 5 Crypto producing assets (Autumn 2015)

10/04/2015 02:07:00 pm Unknown 0 Comments

So you've heard about Bitcoin and you are wondering how you can make money from it?

The first thing you will read about is 'mining' and that is not nearly as productive as it used to be, also you need to take into account the price of mining equipment, then there is cloud mining which I've not yet invested in (and am very sceptical of). You could just hoard Bitcoin and wait for them to raise in value, but I think its a good idea to diversify.

So a good choice is to invest in assets which produce a dividend, these assets are 5 that I personally have invested in and would recommend for various reasons, but the main things to be considered when buying an asset are : The development team behind the asset, The ROI, The ease of use, Potential for capital gains. I have rated each asset on these factors.


So  without any further adieu and in no particular order here are the Crypto S.I Top 5 for Autumn 2015

-----------------------------------------------------------------------------------------------------------

Dash Masternode    

These next two assets come from the NXT ecosystem, which as far as I'm concerned is the first and still the best Bitcoin 2.0 project. NXT is the only real competitor to the much anticipated Ethereum, although they are quite different, NXT benefits from having a fully functional decentralised platform, There are loads of features of NXT that you may find interesting such as proof of stake, NXT-Freemarket (which is a working competitor to OpenBazaar) and the amazing 'Supernet'.

The best thing about NXT is that it is decentralised, but you do not need to download an entire blockchain to use it. The 2 assets that I've chosen on the Nxt platform are both available on the asset exchange and they are:
MMNXT 979292558519844732 assetid - A market making assets which makes a steady daily profit, dividend is paid weekly every friday. It's around 0.5%-1% depending on how much money the fund has generated.
Coinomat 7474435909229872610 assetid - A rival to the heavily funded Shapeshift.io, Coinnomat is a simple hassle free way to trade crypto currencies without having to sign up and trades are completed within minutes. The interface (website) is arguably not as slick as Shapeshift, and the platform definitely has less funding, but we can all buy into this platform for as little as we like, whereas Shapeshift is having funding rounds via Bnktothefuture with a much higher minimum buy-in. A small fee is charged per transaction and a percenttage of this is is given as a dividend to shareholders, this is not always paid on time and obviously would change depending on the success of the service.

My MIM hell..... The Day The Fun Fell Out Of Cash Deposits

5/16/2015 09:43:00 am Unknown 0 Comments

What is MIM? It's known by various acronyms, and it means Man In The Middle.

MIM is a type of scam which some clever idiot decided to attempt to use against me. I was quite lucky not to get caught out as it was only the local bitcoin feedback system that saved me from losing £2000.

So here's how it works,
   The scammer makes a request with me at the same time they contact someone else and offer to sell them something, they then tell their buyer to deposit the payment into my account, Once the money has been deposited into my account I will send the scammer Bitcoin thinking that everything is fine and it's just another trade, however the scammers buyer will never recieve the goods they have paid the scammer for, and when they go to the police to get some much deserved justice, they only have my bank details as evidence, I dont know what happens to me after that but I'd assume I would have to re-imburse the scammed buyer and try to get my Bitcoin back from the scammer, which as we all know is nigh-on impossible.

So how did I avoid it?
  I was fortunate that The LocalBitcoin Platform is very difficult to scam with, There were a few factors in the trade which raised my suspicion, firstly the scammers account was under 24hrs old, a big red flag. Secondly The scammer seemed very very keen to do the deal off the localbitcoins platform, and wanted the bitcoins released extremely quickly. Finally during the negotiations of the deal, an alert appeared above the users name stating that they had violated terms of service, Together all these factors are enough to alert a seller to be EXTRA vigilant, and usually it would spell the end of any negotiations for most traders. On this occasion I was too fast to hand over my bank details so the scammers buyer did actually deposit £2000 into my account, she had no clue what bitcoin was!

How did things end?
  My situation got particularly complicated because the scammers buyer actually paid the money to me, at this point I needed to find the buyer and return their money, When I asked the scammer for ID they sent me the victims passport so luckily I had enough information to actually find the victim and contact her, the problem was that she was not home when I called but I was convinced at this point she had been scammed. I then had to be certain that whoever came forward claiming to be the victim was indeed the victim and not the scammer.



How can this be avoided in the future?
  I'm not too sure it can be stopped fully, but I think a good way to protect yourself is to ask for the 'buyer' to send you a picture of the receipt used to deposit funds, and have this receipt say TO PURCHASE BITCOIN, surely no 'victim' will be silly enough to buy something and write something totally different on the receipt when requested to. In this situation personal ID is really no protection at all.

A little lending advice

2/03/2015 01:49:00 pm Unknown 0 Comments

I am thinking of making a video to help people with lending techniques for both btcjam and bitlending club. They will be based on the techniques that I'm using which have been successful for me.

I had a conversation about it with someone on google hangouts just now, so though I would share my advice via my blog for the rest of you:

BTCJam A revolution in lending?

1/03/2015 02:33:00 am Unknown 0 Comments

I have been meaning to blog about BTCJam for some weeks now, but i've been to interested in funding loans and watching payments come in to bother to share my experience with you all.

I do somewhat regret my decision not to blog earlier as since I've started to use BTCJam I've also found out and started to invest in Bitlending club.  It does mean that I will be giving a slightly less glowing reference to BTCjam in light of using it's far superior rival BitLending Club.



Anyway let my critique begin........

BTCJam is a crowdfunding platform for people and organisations to take out loans. These loans are funded by the crowd, made up by investors (like me) who are willing to invest and wait for the repayments (with interest of course). The beauty of this concept is that it means that the banks and payday loan companies can keep their noses out of our financial affairs, and hopefully people can borrow at lower than loan shark rates and people can invest with a better return than the nonsense 5% you will get on an isa this year. Of course holding an isa is a lot easier than searching through the bogus loans on BTCJam to find the gems, but in the last 2 months (which was also my first two months) I've made over 30% ROI, unheard of in banking terms and possibly a little far fetched in stocks and equities. also take into account i'm not an experienced lender and i've fallen foul to plenty of fraudulent loans.

Fraudulent Loans......
I don't want to harp on about the level of fraud found on this site, because it really isn't a deal breaker for me, there a few really annoying things about the site which I will get onto in a bit, but generally, the fraud loans are quite easy to spot and haven't proven enough of a problem to take my impressive earnings down too badly. Let me clarify a fraudulent loan is a loan made by a fraudster impersonating another person, not a loan where the person loses interest and leaves the site or doesn't bother to return, or where they run into trouble and then simply run away. Often investors on BTCJam label people as fraudsters just because the loans gone bad, I call that being a sore loser. :)

The main problem with BTCJam is that the site itself takes payment from the moment the loan is activated, so even if the loan is fraudulent then BTCJam get paid, this is obviously bad as it means they have less incentive to weed out the bad loans before they are offered and financed. Not to suggest that BTCJam don't care if it's users get defrauded or not, but it's clear that they still get paid.

Censorship.......
The biggest bug I have to bear with Btcjam is the level of censorship on the site, they won't allow the sharing of websites or the use of certain words in your comments and loan applications, while they will cite that this is to 'protect you', it's clearly just a way of them trying to have a little more control over users communication than they should be attempting to gain, this for me is the single reason for me to ever leave the site (won't happen anytime soon though, the profit is too good). I get the feeling that if BTCJam become successful they will go the way of Apple, Paypal and HP and but users a distant second to profits. But that's all speculation.

Verification.................
BTCJam does the usual KYC stuff, I've already uploaded enough information to them to make stealing my 'identity' a piece of cake, I'm not to clingy with my 'identity' so it's ok, but it may prove a problem for others who want to borrow on the site. however I cannot see a way around this style of verification and the BTCjam system is quick and painless, I had my documents verified within 48 hours.

All in all BTCJam has become one of my most used sites, and a great place to meet new people and learn about what's happening in the crypto world, and while I don't feel it's the best in it's genre, I feel you should all definitely sign up and make a bit of interest on there. So from me it gets a solid 3/5