As such, it’s time we covered a company called BitBond, which is based in Germany, which facilitates crowdfunding in much the same way that BTCJam does. However, because of the problems that BTCJam has had, our first question for Chris Grundy, a representative of the company, was how they can ensure that funds are repaid. After all, a Bitcoin loan can very much be like a cash loan, in that once the debtor has secured the funds, they’re free to run.
Also read: Bitcoin Loans Are Still Loans in Kentucky
Credentials can be falsified with impunity via the DarkNet and other means so that even a seemingly thorough vetting process can let through a bad apple or two. Indeed, to this day, despite advances in its platform, BTCJam has managed to allow a few bad apples onto its platform. It’s just the nature of crowd lending. To this end, Grundy told CCN.com:
We take numerous measures to ensure repayment of loans. This starts with emails and phone calls, in case of late repayments, and can culminate in the involvement of debt collectors to regain the owed sum.
Last month, the company received 600,000 Euros in an angel funding round, which has allowed them to expand their staff improve their platform. In most ways except name, the experience of using BitBond is the same as using BTCJam. What’s not similar to BTCJam are the horror stories: so far, there haven’t been any, at least none that are easily located. It appears that prior to the company’s launch in 2013, another company had gone under the name BitBond, and they had been some horrible scam.
Another way they differentiate is in the method by which the interest rates are set. BitBond sets them, based on the creditworthiness of the applicant and the purpose of the loan. They explained in a forum post that this was the best way to do it, something they had learned from the experience of more traditional peer-to-peer lending platforms.
The reason why on Bitbond.net we set the rates […] is that experience from other p2p lending platform shows that it seems to produce the best results for both borrowers and lenders. One popular example is the second largest US based p2p lending platform. They started with interest rate setting as described in [previously in the post] after they saw that interest rates did not reflect the default risks of borrowers correctly. Lenders weren’t earning sufficient returns and the marketplace was close to stop.
To date, over 700 people have found the funding they needed via BitBond, and it appears they take recovering funds seriously. BitBond and BTCJam are both valid ways to fund your cryptocurrency business or application, and neither of them will require you to interact with a bank directly. Of course, if you got a substantial loan, you’re almost certainly going to have to deal with a bank at some point.
Then, of course, there’s the obvious benefit of BitBond: being a lender. You assume the same risk as most investments, but BitBond claims to do a thorough creditworthiness check. To gain maximum returns, as is the case with other platforms, it is best not to put your whole investment into one loan. It is better to find an array of projects which spark your interest, and invest in all of them, a little bit each. The better the idea, the more you should invest. But never invest anything, in any case, that you can’t afford to lose. That doesn’t just go for peer-to-peer lending, either.
Last modified: May 21, 2020 11:05 AM UTC