Then follow us on Google News!
Peer-to-peer lending services can benefit a lot from embracing Bitcoin and other cryptocurrencies. Unfortunately, this also attracts a lot of negative attention. Companies such as BTCJam have been getting a bad reputation because most people will never repay their loan over time. One Reddit user posted his results from using the service for quite some time, which goes to show the company is doing very little to force people tor pay their Bitcoin debt.
BTCJam Is Not What You Think it Is
On paper, the service provided by companies such as BTCJam is an excellent way to use Bitcoin. Extending loans to people from all over the world is a great solution to promote Bitcoin usage. Unfortunately, this concept still needs a lot of work, as there are a lot of caveats to using services such as BTCJam right now. In most cases, a lot of the loans are never repaid in full.
To put this into perspective, a Reddit user posted his BTCJam results to date. Although the loans extended are very small, it goes to show there are virtually no repercussions for people who do not repay their loan in the first place. Even though BTCJam collects a lot of user information, they are not using these details to prosecute users who fail to repay the money to the rightful owner. Every loan is subject to a predetermined duration, yet users are capable of bypassing this limitation without suffering the consequences.
It is evident a lot of BTCJam users are losing money unless they are the borrowers for a specific amount of Bitcoin. In fact, some Reddit users argue the only people who benefit from using BTCJam are the ones who borrow money, and everyone else is losing money left, right, and center. BTCJam has been dealing with these issues for quite some time, yet it seems very little has changed over the past year or so.
Although the concept of extending Bitcoin loans may sound appealing to a lot of cryptocurrency enthusiasts, it is a scenario that should be avoided for the time being. The better option is to hold the Bitcoin balance and just watch the price go up.There is no point in losing Bitcoin due to some scammers who cannot repay their loans and get away with it without facing any repercussions.
Peer-to-peer lending is an intriguing market that continues to gain traction all over the world. Without middlemen in place, the costs for extending such a loan are brought down to a minimum. However, it requires a lot of trust between both parties to ensure the money is repaid in full. Unfortunately, even companies such as BTCJam, who act as a middleman, cannot guarantee that will be the case.
Header image courtesy of Shutterstock