Silk Road forums

Market => Product offers => Topic started by: Banjo on March 11, 2012, 06:30 pm

Title: Bitcoin loan system: request for comments and input
Post by: Banjo on March 11, 2012, 06:30 pm
Hello all,

I think I am going to start offering loans on SR. Below I've outlined the system I am considering setting up. Does this seem fair to you, as far as rates go? Do you see any way I could improve the system?

Here is the reputation system I will set up.

To be eligible for a loan, you must have at least 5 successful purchases on SR, and no auto-finalizations (correct me if I'm wrong, but as a seller, I'd be able to see both of those, correct?)

The following schedule will apply to your interest rate, and how much money you're eligible for:

0-10 loans:
3 BTC max loan amount, 7 days to repay loan, and 35% interest. Yes, I'm aware this is a little steep, but I figure this is where my highest risk is.

11-20 loans:
5 BTC max loan amount, 10 days to repay loan, and 25% interest.

21-30 loans:
7 BTC max loan amount, 10 days to replay loan, and 20% interest.

31-40 loans:
10 BTC max loan amount, 14 days to repay loan, and 15% interest.

41+ loans:
15 BTC max loan amount, 14 days to repay loan, and 10% interest.

75+ loans:
Eligible for special benefits, such as larger loans, payment plans, or multiple loans out at the same time.

Account creation process:

1.) Loans will be listed as a product in SR, for a price of $1USD.
2.) You buy the loan like you would any other product. Instead of sending me your name/address, you will send me an encrypted AND signed bitcoin address.
3.) Assuming you meet the criteria, and your account is in good standing, I will then transfer the money to the address you provided me. I will respond via a PM with the address you are to send the repayment to.
4.) I will create a unique bitcoin address for each account I have so that I can easily see who has paid be back.
5.) I will make an entry on a spreadsheet that will contain ONLY the following information: your SR username, your bitcoin address, your total number of loans, due date of your loan, and current balance.
6.) You are welcome to update your bitcoin address that I have on file at any time, but the new address MUST be signed by the same key that you used to open your account. This will help insure I am dealing with the same person.

Security on my end:

Spreadsheet will be manually encrypted. All communication will be done via TOR. My entire hard drive is encrypted using TrueCrypt. Only I have physical access to my computer.

My "business" will operate Monday-Saturday. Response time will be between 0 and 4 hours on those days. Orders made on Sunday will be processed Monday morning.

Title: Re: Bitcoin loan system: request for comments and input
Post by: Kandi on March 20, 2012, 10:04 am
I never understood these loan things on here.
How do u prevent users from just not paying back? 5 successful transactions doesn't exactly mean "honest person" but I could be wrong.
If u had a good system then this would be pretty cool.
I am just curious.
Title: Re: Bitcoin loan system: request for comments and input
Post by: riddikulus on March 20, 2012, 11:45 am
I have a hard time understanding why someone would need 1-3 BTC 10 times. I can see once or twice maybe when you're starting out but you pretty quickly figure out what's what.

Saying I'm going to borrow $15 to pay back $20 in a couple of days is pretty dumb.
Title: Re: Bitcoin loan system: request for comments and input
Post by: EnterTheMatrix on March 20, 2012, 01:36 pm
Hello all,

I think I am going to start offering loans on SR. Below I've outlined the system I am considering setting up. Does this seem fair to you, as far as rates go? Do you see any way I could improve the system?

Here is the reputation system I will set up.

To be eligible for a loan, you must have at least 5 successful purchases on SR, and no auto-finalizations (correct me if I'm wrong, but as a seller, I'd be able to see both of those, correct?)

The following schedule will apply to your interest rate, and how much money you're eligible for:

0-10 loans:
3 BTC max loan amount, 7 days to repay loan, and 35% interest. Yes, I'm aware this is a little steep, but I figure this is where my highest risk is.

11-20 loans:
5 BTC max loan amount, 10 days to repay loan, and 25% interest.

21-30 loans:
7 BTC max loan amount, 10 days to replay loan, and 20% interest.

31-40 loans:
10 BTC max loan amount, 14 days to repay loan, and 15% interest.

41+ loans:
15 BTC max loan amount, 14 days to repay loan, and 10% interest.

75+ loans:
Eligible for special benefits, such as larger loans, payment plans, or multiple loans out at the same time.

Account creation process:

1.) Loans will be listed as a product in SR, for a price of $1USD.
2.) You buy the loan like you would any other product. Instead of sending me your name/address, you will send me an encrypted AND signed bitcoin address.
3.) Assuming you meet the criteria, and your account is in good standing, I will then transfer the money to the address you provided me. I will respond via a PM with the address you are to send the repayment to.
4.) I will create a unique bitcoin address for each account I have so that I can easily see who has paid be back.
5.) I will make an entry on a spreadsheet that will contain ONLY the following information: your SR username, your bitcoin address, your total number of loans, due date of your loan, and current balance.
6.) You are welcome to update your bitcoin address that I have on file at any time, but the new address MUST be signed by the same key that you used to open your account. This will help insure I am dealing with the same person.

Security on my end:

Spreadsheet will be manually encrypted. All communication will be done via TOR. My entire hard drive is encrypted using TrueCrypt. Only I have physical access to my computer.

My "business" will operate Monday-Saturday. Response time will be between 0 and 4 hours on those days. Orders made on Sunday will be processed Monday morning.

Just one dishonest customer loss will cut into your profit and make your business nonviable.

Matirx
Title: Re: Bitcoin loan system: request for comments and input
Post by: jochem on March 20, 2012, 04:53 pm
I think it's pretty smart to let a customer build up trust with your scheme, you'll probably have earned 15 BTC on the customer before he's eligible for such a loan (and run away with it). On the other hand, why would I want a loan of 3 BTC (costing me 1.05 BTC)? I know you get a shitload of people begging for BTC in the forums, but I don't think they have enough transactions to apply for your loans anyway.

And how do you suppose you're going to enforce people not paying? I could take a loan with you, get 3 BTC and just decide not to pay you back. There's nothing that you can do to get me to pay you back. You might just end up giving out free money.
Title: Re: Bitcoin loan system: request for comments and input
Post by: gustono on March 20, 2012, 05:00 pm
I think it's pretty smart to let a customer build up trust with your scheme, you'll probably have earned 15 BTC on the customer before he's eligible for such a loan (and run away with it). On the other hand, why would I want a loan of 3 BTC (costing me 1.05 BTC)? I know you get a shitload of people begging for BTC in the forums, but I don't think they have enough transactions to apply for your loans anyway.

And how do you suppose you're going to enforce people not paying? I could take a loan with you, get 3 BTC and just decide not to pay you back. There's nothing that you can do to get me to pay you back. You might just end up giving out free money.

There is nothing he can do really, flawed system, don't even try to do this.