I will run off with 500NBT profit.
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The existing NBT parking machenism is also a lending business, the Nu protocol borrows NBT from holders and pay interest.
Because of annonymous of NBT/NSR holders, any attempt to reference real ID credit record will fail. We either
- establish a new credit record system in an distributed way, and people with good credit NBT/NSR address are permitted to lending business.
Or - use collateral mortgage. If lending occurs between holders, any type of collateral is acceptable as long as they agree.
If Nu protocol involved in lending business, since we are factual reserve system the only acceptable collateral is NSR, while btc must be completely denied. There is a typical attack to fractal reserve system: attackers borrows tons of NBT by pledge lots of BTC, then they attack NBT pegging, once buy wall broken they buy back NBT at very low price and pay back to protocol.
We develope Smart Contract template for lending, people will borrow/lend NBT with each other. But I am more interested in lending business between people and Nu protocol. Can we use reverse parking machenism by lending NBT to NSR holders? So that there will be thousands of tiny commercial bank, actually everyone can become a tiny bank, and Nu protocol is the central bank. Therefore Nu protocol may earn profit and more important is control the circulation of NBT In the market.
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I think the NSR/NBT holders lending NBT can still be anonymous especially when they are managed by the protocol. All can go in a kind of lending pool (in the blockchain) with different offerings (duration, interest, cost to pay-off early). The lender need to be trusted though, so I agree that there are the two options (new credit/identity system and collateral) as quoted above.
But there is also the option to ask people to provide a real world identity. I suppose than many wouldn’t mind and fully understand that they need to identify themselves to receive a loan especially when there is no collateral. Here is the challenge on how we make an interface into the real world. Most exchanges are already doing this and I have seen several different processes. Maybe we can partner with 1 or more trusted exchanges and utilise their identification process. Another option is to set up such a service ourselves, but which may be expensive and complicated.
Another system might be that there is some kind of identity custodian who verifies user identities and securely attach them to openIDs, Google IDs or anything (e.g. in a blockchain) we think can be used to authenticate users once verified onto our lending platform. The identity custodians will have to built their credentials over time. I can imagine that lenders even adjust their lending terms (e.g. interest, or max height) depending on which custodian has done the verification on a certain account (verifiable in the same blockchain).
A few things to think about:
The cost of the identity verification service. Would a lender be prepared to pay say $25 or $50?
What kind of blockchain would we use to e.g. attach an OpenID to a passport number and a verification date?
What kind of identities will be acceptable? An American could verify an American passport, but likely wouldn’t have a clue how to verify a Chinese passport. Although I believe there are websites for that.
Anyway lot’s of rules and complications, but not impossible (given that exchanges can do it).
I think we should write a white-paper on this or something similar…
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Cybnate, last year I paid someone money for BTC mining rig, and never get my machine. He gave me his ID card copy and I transferred fund via bank account. Finally I called the police and nothing happens till now. Everything can be fake, including ID card.
So I prefer to “trust no one” police, every person is suspicious, even Jordan’s account may be hacked. To be frank, collateral mortgage is my only choice. I like a cold blood mechanism which treats gentleman and thief equally.
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That’s fine, but everything has its price. You like full collateral and may offer low interest to a lender. Others say I trust you with ID only to a certain value and with higher interest. I see it as a market with different risk appetites.
BTW Only a copy of ID card is indeed very weak. Alternatives are video sessions where the user present themselves with one or more IDs visible and recordable. Also when people are prepared to pay further background checks can be done in many countries.
In BTCJam you can run off with the whole lot if you want to at the moment…
the 500 deposit is in addition to the reference system.
But I am sure it can be done in many other different ways… Cybnate idea about an identity custodian is a good example of another way of utilizing a trusted third party to keep IDs and/or a deposit.
The risk of lending money is the reason why there is interest, risk can be minimized but not entirely removed.
i have lost some btc in btcjam even to trusty members with good payment history.
in p2p lending you can’t be sure for anything, thus the risk and the interest.
i think it is the same as gambling or investing
There is “long con” which means some good credit record persons finally commit sth bad, so I don’t even trust good guys because the “good tab” is just about past not future guaranty.
So our lending business is going to be kind of gambling? High risk high yield, this appetite is fine, e.g., I am investing XPM now, perhaps X10 next year due to side chain by SK, and maybe empty handed.
The difference is that I believe in the judgement of myself, e.g. XPM has some feature I really like and modified PoW is OK, even SK is missing, XPM also attractive to other programmers. However, I just won’t trust a certain person on line anymore because I can’t even assure if he/she is himself/herself. I prefer to open transaction’s “trust no one with your money” policy.
Any trusted central node/third party is the weakness of that system, I won’t trust central bank, let along other central node(third party).
11:34, “Don’t trust people with your money”, and Bitcoin’s success is the elimination of trust on central node.
I’ve mentioned it before, but if projects like the Cryptocurrency Bank overcome the wave of regulation they’re sure to encounter, it’s an ideal platform for NuBits lending. They would be the ones that invest in development of the lending processes, identity verification, and regulatory compliance. We should be the ones making sure the product they lend works.
These types of institutions may very well take a long time to come into existence however, so I agree that as shareholders we should be trying to kickstart the process. While I’m not familiar with BTCJam, I think your idea @Cybnate of looking at exchanges with existing KYC processes might be a great place to start, as they already function like a minimalist bank.
What would be a good first exchange to work with?
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I would like to keep the discussion focused on what actions need to be taken to make NuBit lending a reality.
Some have mentioned that BTCJam features high default risk. This is a concern for the lender, but is not really our concern. Our concern is whether BTCJam and other lenders perceive adding support for NuBits as a profitable course of action. Perhaps they are intimidated by it and just need someone knowledgeable to help them. Perhaps they need compensation for the effort it would take to support NuBits.
So, we need someone to step up and answer the following questions:
- Who are the peer to peer lenders best suited to supporting NuBit lending?
- These lenders need to be contacted to determine why they aren’t supporting NuBits and what it would take to interest them in doing so. Then shareholders should attempt to provide them with the assistance or compensation they require.
There is ample funding available for any course of action shareholders decide brings value. I am surprised to see that only Cybnate has requested and received funds for an initiative outside the scope of liquidity provision. I think shareholders and other participants are used to cryptocurrencies that have no model for funding their own development. But that is not our situation. There is no lack of opportunity here, just a lack of initiative.
There seems to be a desire for collateralized lending. This can certainly be done. Auto loans may be a viable avenue here. In some countries auto loan rates seem to be subsidized via governance but in many countries this is not the case and auto loan rates begin in the double digits. In some such countries people may be adverse to loans not denominated in their national currency. However, in many countries in Latin America, for instance, car prices are denominated in US dollars. Some research ought to be done to discover where auto loan rates are highest and what places would accept auto loans pegged to the US dollar. If a lower rate can be offered for NuBit lending, we can create a market. Possibilities for partnerships with established lenders (who can assess credit worthiness) and car dealerships should be assessed. Shareholders should consider compensating whoever is willing to do all the work to put this together.
Let’s take a moment to consider how loans such as auto loans would effect the NuBit economy. The first thing that would happen is a NuBit loan would be immediately exchanged for the currency the auto seller desired to be paid in. Then every month for the term of the loan there would be guaranteed demand for NuBits, as the borrower would need to purchase several hundred NuBits each month to repay the loan. This supports the peg and would create demand for exchange services. The creation of these exchange services would make NuBits easier to use. Investors would purchase NuBits with the goal of receiving interest on them. Lending will provide a multitude of important benefits to the NuBit ecosystem.
I’ve sent an introductory email to Celso & team with BTCJam, will update this thread when I hear back.
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That is not an easy question. I would trust CCEDK and I would trust a Dutch exchange as I would trust the people there as they need to comply to stringent Dutch KYC processes. Others might trust Vault of Satoshi, I don’t know them well enough, but they look reliable on first sight.
So if one of those exchanges could provide a proof of identity check with some smart process and ideally lodge that into a blockchain in a way it is verifiable, that would be great.
100% peer to peer lending is only possible if you can trust strangers, which most of us don’t. Or have 100% collateral and control over it. Most of the time you will need a 3d party to do some due diligence or vouch for them in some way when you trust the third party. A trust-less peer-to-peer lending system is one of the toughest things to crack in my opinion. Until someone has figured this out, I think we just need to tie into existing trust systems and interface them into the blockchain, so they are at least traceable and not able to be counterfeit.
Let’s see what comes back from that.
Auto loans is interesting to start with especially in countries where reliable banks are scarce and too expensive for most people. Ecuador is accepting dollars, but I you would need someone local who knows the market to write down a proposal for the shareholders. e.g. a car dealership.
True, but does not sound like a viable system therefore. Ideally NuNet should bring knowledge, processes and third parties (e.g. for KYC) to improve security and this can be a growing market for the Shareholders. Don’t see it taking off otherwise any time soon.
Would be interesting to see what @ronny at CCEDK thinks about this discussion.
I’ve contacted Vault of Satoshi multiple times since release trying to gauge their interest in adding NuBits, but haven’t even received a response. VoS cut their trading operations down to a handful of long-established coins last month, so adding NBT might be contrary to their current strategy. They are an excellent exchange however, so I still hope they’ll realize the opportunities that NBT trading pairs brings in early 2015.
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Yeah, we need an exchange to offer margin accounts backed in NBT. Not only would this be great for NuBits, it’s the only way for exchanges to even come close to competing with the likes of Bitfinex, OKCoin, etc.
if i understand correctly you wanted to convince traditional exchanges to add p2p lending fearures?
I’ve read all here but still unsure in which way I could help make this possible. If you put up some various points for consideration and send them to me on ronny@ccedk.com, my partner and I will go through them and see what could be done from our side. Thanks
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Very old topic, but I remembered that I had a look at it at some point in time.
So the first thing is that BTCjam also offers linked loans, which means you borrow a dollar amount and pay back a dollar amount (both in btc of course) which actually would lead to the same result as if we lent someone Nubits, right? The lender could receive more or less btc than he or she gave away.
But here is something with regard to the collateral: what if someone holds a good amount of a well established cryptocurrency that he or she does not want to liquidate right now but is interested in a loan. Couldn’t we take other cryptos as a collateral as long as the time of repayment for the loan is in the foreseeable future and the default risk rather small? I think most people who are really up for a cryptocurrency loan are very likely holding other cryptos as well. We could then decide which we accept and which not. At least that could be an entry point into the market.
Just a suggestion 
It is posted twice, which is not great: Nubits as Smartcoin on OpenLedger allowing to borrow, short, long etc, and tipping NBT, NSR, BKS amongst yourselves on forum and on social network!. Suggest you delete one of them.
sorry was not sure if this thread was visible same as other, did not wish to make it look like spam of any kind.
BTW this is an ineteresting (old) post.
I sent an email to loanbase.com recently.
I just suggested that they could implement the “Linked Loan” feature as their competitor (BTCjam) does. But instead of copying the idea from their competitor, they could use Nubits as an alternative.
Unfortunately I’ve never received any reply from that team…
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