Many thanks to the GetHashing overlords, for allowing us to create this forum on GetHashing!
We have only just opened our business to the crypto world, and we have already commenced the next phase of our business development projects.
Keep an eye open here to see the latest Bitlend consumer services, products, and specialized offers, arriving over the upcoming months. Bitlend will combine the worlds of fiat and crypto finance together, in ways that create consumerism of services and products. We will be more than just a traditional Bitcoin lending model.
Our mission: To create consumer-based financial products, which provide crypocurrency users real options to fulfill their consumer-based needs.
“Solving the crypto industry’s financial needs bit-by-bit.”
Thanks. Yes, we have much work ahead of us. Commercial integrations with other crypto-based businesses will be on the horizon. We focus on consumerism and ease of use. The industry is highly constrained in this area. We will be developing realistic financial programs, which make using crypto more meaningful and effective, and which begin to address normal consumer needs; something we do not see much of in the current environment.
Working the kinks out with a small group. We found a lot of things we did not uncover during the testing period. Even with a small group of people, you still do not find all of the issues (bugs) in the background until you go live. Once we have these few remaining kinks fixed, we will open the floodgates to the everyone who requested an invite.
First, the credit rating system is not focused on social media, like the others. Second, we are mitigating much of the industry’s 17.5% default rate by running two credit rating systems parallel to each other. Finally, this is not the full dog and pony show. We opened the platform to traditional lending, like the others, knowing that “services” would be created to leverage lending benefits through partnerships with other companies, which sell products and services of their own.
Our focus is to create financial products which can actually be collateralized, but in a fashion that allows the borrower to receive the full benefit or use now, versus a layaway type of environment. There are also financial services which will bridge the worlds of fiat and crypto currencies. Micro-lending, remittances, and direct consumer revolving credit lines are only a few of the services being developed. Some take a lot more time to implement, due to the odd regulatory regimes in multiple countries, while others are fairly easy to build infrastructure for, using existing fiat world financial products.
Some of the Bitlend team are also involved in another project, almost complete, which will “internationalize” the consumer base, as well as fill two main components that consumers need, especially in the crypto industry: ease of financial use, and; ability to purchase a wide variety of consumer goods available to normal fiat world consumers.
Services are another aspect of crypto that are very limited at present. It is not a focus to force real world businesses to accept or adopt crypto in as much as it is for consumers to be able to instantly translate their crypto characteristics into fiat world characteristics.
In essence, Bitlend is in the early stages of becoming a real “banking environment” that addresses basic, and in some cases advanced, consumer needs which are daily occurrences. We started with a small island, and are projects are designed to enlarge the island over time, adding services and special financial vehicles which encompass most of the crypto consumers daily needs base.
I know, it sound extravagant, but who else would you expect to actually develop and implement (address) such needs which have long-since been vocalized by the crypto world, over these past years?
There are 6 current owners, with varying percentages of ownership. We also have a sizable percentage of the company set aside for “in-common (inside) investors.” who we will bring into the business when/if the need arises. We will build our crypto and currency base over time and as is needed to service the customer base. We have no intentions of being anything less than a pseudo bank. It is not just about normal money lending. We are venturing forth to begin the process of building a crypto/fiat economy. Our products and services will be developed to this goal/end.
In the first month or so none of the loans are collaterallized or secured. However, we are finishing the relationships needed to offer products and services where the accounts are funded through loans, and we retain control of the accounts as collateral until the loans are repaid.
I am exploring the notion of selling loan insurance to the peers, but I have not had time to set up a financial model (remember: I am Mr. Spreadsheet) that will show me the potential liability exposure to Bitlend. That would only be for unsecured loans however, and for obvious reasons.
How secured loans are handled:
A secured account loan is structured to ensure that Bitlend retains full control of the account (generally a crypto-based service) until the Borrower has satisfied their loan obligations, outlined in the executed promissory note that they sign at the beginning of the loan disbursement period.
When the Borrower defaults on their secured loan, Bitlend/Peers retain the installment payments made, and Bitlend/Peers may sell the collateral note in the Bitlend marketplace, or keep the collateral account depending on its purpose (I am avoiding specifying what that account would be ). The note/account is generally sold at discount to value, and potentially could yield a higher yield on the note whe coupled with installment payments already made and forfeited by the Borrower. In the case where there is more than one Peer funding a collateralized loan, Bitlend assumes control of the account/note and sells the note/account in the Bitlend marketplace, distributing the proceeds of the sale, proportionately to the Peers’ percentage ownership of the note.
Once we get to that phase, we will ensure that the structure will have possibly other options as well, within the marketplace. Some Peers may wish to retain interest in the account funded, buying other Peers out of the note through the marketplace. I will design it so that it makes sense, yet minimizing the coding complexity for the devs.
Bitlend sounds pretty cool however I’m curious on getting more details about verbiage below.
Is this only for colored assets or other type assets ?
This is inferring that one will have to provide Bitlend the account access to ones assets and if so the dividend payments from that asset will be paid to whom ?
Just wondering - if it’s an asset being used as collateral does it make more sense to have assets themselves transferred oppose to obtain account access, however dividend payments would be an issue, right ?
Although it may be possible to use other coins to secure, or partially secure loans, it is by far not the only focus of the model. The main focus is based on commercial relationships with retailers or service providers, where such accounts or products can be controlled for the period of time the loan is outstanding. The problems with focusing only on altcoins or coloured coins is that their market values can vary dramatically, creating a mathematical formula the borrower may use in their decision making process, resulting in a purposed default on their loan; leaving us stuck with worthless collateral.
The industry currently suffers from a default rate of around 17.5%. Most of this is due to a lack of proper securitization as well as a lack of borrower due diligence. The reason Peers suffer most of this loss rate is due to the lack of screening of the respective Borrowers. Our credit rating system is far more stringent than what we have been able to uncover in the current industry, which relies more on social media connections than anything else. We would rather originate fewer loans, with higher quality, and lower risk, than open the floodgates to anyone or everyone who prefer the shroud of anonymity. We cannot fulfill our project plans when borrower quality is not compelled to conform to the needs of the lender(s).
Securitized loans is something that the lender must create through relationship building with the very service/product providers seeking to tap into the extremely large market that cryptocurrency affords to them (substantially more consumers with access to more consumer capital). Moreover, the use of proper legal structures creates an environment of enforceability that we also do not see in this particular industry. You need the legal document(s) in place to facilitate the ability to recover the very assets which were loaned against. This is the main reason Borrowers must sign a promissory note for every loan they request. Promissory notes are legally binding in most countries of the world. For the U.S. and Europe, they are all that is required to pursue legal remedies within the courts or with credit collection agencies.
Our Credit Rating system is stringent. The less information the Borrower is willing to divulge the less they can borrow and the higher the interest rate. That is fairly straight forward, but with little or no information given, with proof of such information, you cannot even borrow on the platform. There are no E-class Borrowers on Bitlend. Moreover, if you miss a payment date, chances are your credit rating will drop to E regardless, because we just do not subscribe to the concept of lending money to pseudo-anonymous borrowers. You need to visit the local loan shark on the nearby street corner if you want that kind of loan, without strings attached, but even then, the loan shark knows who you are, and where you live and work.
If/when we decide to use altcoins or coloured assets as collateral, the Borrower will relinquish control over those assets by depositing them to a locked wallet on our platform. The requirements for loan performance will be the same, in that the risk of asset loss will be high should a missed payment or default occur. I have “considered” converting the collateral at the time of deposit, replenishing the coins when the loan fully performs. We capture the then market value of the coins, precluding a diminished value in the future (for loans over one or two weeks) based on market analytics of the coin’s exchange value history. Example: If altcoin 1 has a long-term history of devaluing at an annual rate of 35%, then the expected market value of the coin is less than initially valued as collateral for loan, when the payback period is greater than 30 days. It is risk mitigation that we have to address in a financial model. If I sell the coins on the market today, and the loan performs, we buy the coins back from the market several days before the last payment is due, and replenish the Borrower’s locked wallet. This is only a concept. We are in the finance business, where risk should be borne by the borrower, not the lender, under crytocurrency environmental conditions. We are not setting out to be the easiest lending platform in this space, but the most secure and most comprehensive model, engaging in the building of consumerism through financial economic modeling. Initially, it starts in the mode we have, advancing over a very short period of time. When referring to “staking” coins, I see no model where this would work as collateral, in that there is no way we can secure those coins while maintaining the staking aspect of the underlying coin. At this moment in time, we have no plans on the board for staking any coin. We leave that to their respective coin networks. It is not the typical function of a bank-like entity, to lock up capital into staking cryptos, which may or may not be fully leveraged in the borrowing/lending model.
Depending on the product/service being sold (through us as lenders) account ownership would be started by us, not the borrower. We would hand the account over to the borrower once they have satisfied their loan requirements in full. In the case of altcoins, that is explained above. As a borrower, you should not be able to hold your own assets, independent of the financial institution, while simultaneously using the same assets as collateral for a loan, with the same institution. In essence, it is not a collateralized loan anymore, but just a promise to liquidate assets should financial difficulties arise from which the borrower is unable to satisfy their loan requirements. Bitlend would always act as temporary holder of all collateral used to secure loans on the platform, not the peers, and certainly not the borrowers. The definition of collateral is that which can be readily taken by the lending institution, either through repossession or through direct liquidation of the held asset within the control of the institution.
Yes. We only accept valid documentation of identify, address, income, credit standing (fiat world), etc etc. Our model is a lot more stringent however, due to our ongoing development model. We are not simply a bank, we are also a commercial development entity, developing tendrils into various commercial areas of “economy.” There is a lot more on the horizon, which when announced, will make more sense of our intentions and direction. We are only starting out as a normal lending model, because we have to open the doors now for exposure and to build economic activity from which we can continue to innovate.
Adam and Joe are business colleagues of Prestige Auditing, one of my fiat world enterprises, yes. They both have agency positions with Prestige Auditing and act in other capacities as well, such as software development for Prestige, and later InstantAudit (a JV, fiat world, online enterprise in my primary industry), as well as Marketing, Web Development, and PR for Prestige and InstantAudit. They are working on a large number of projects with me, including Bitlend, along with several other experienced individuals. In all cases, and businesses, I am the CEO, and head of the companies (not that it is that good looking a head). All companies, I am involved with, are companies which I represent and develop, alongside many other individuals I have deemed trustworthy, and who bring needed skills to the a business models; mostly developmental. There are also another half dozen or so individuals who work on one or more projects, including several others which are not complete at this point. There will be quite a number of people from the community who will be involved in a large number of projects in the future. I would never turn my back on the larger community just because of some stupid idiot who allegedly scammed everyone out of their savings.
In reference to a post made on another forum, which I will not name, I would never have anything to do with “person who shall go unnamed,” especially since I lead the largest litigation group against such individual. I will also point out that a federal agency representative and I have worked together, for some time now, on the “criminal” case against “person who shall go unnamed.” Subsequently, I have been deemed one of a few with the most comprehensive information gathered on the subject, collectively, in the federal criminal cases against “you know who.” Therefore, my credibility, and the credibility of those with whom I work, is far from questionable, when it comes to any of the businesses which I control. I would never work with anyone where I had information which would undermine their perceived integrity or trustworthiness. Everyone can read my biographic summary on http://prestigeauditing.com/about-the-owner/ if they want to know my abridged background (Btw that is not my mug on that page). I have no hesitation putting my long-running reputation on the names of the companies I personally am involved with or head. I also personally back every individual with whom I work.
Therefore, everyone can rest assured that these are enterprises I head exclusively, with great control, and with absolutely no ties, links or associations to/with the “person who shall go unnamed.”
I had a feeling this question would arise eventually… >_<