This is a guest post by Dr. Paul Ó hAonghusa who completed his PhD in Philosophy at University College Dublin. He is the author of Continental Realism (Zero Books, 2011) and the coeditor of the Meillassoux Dictionary (Edbinburgh University Press, 2015). He is currently a Research Assistant for the Coding Value project at the School of Business, University College Dublin. His current research interests are cryptocurrency, especially Bitcoin, blockchain applications, and the social history of cryptography. He tweets as @paulohaonghusa
Not too long ago pundits openly talked of the demise of peer-to-peer lending. What they have not included in their analysis is the emergence of Bitcoin-oriented peer-to-peer lending platforms such as Bitbond that allow you to secure a Bitcoin loan. Over the past year we have witnessed Bitcoin growing from strength to strength, but one question lingers for those hoping to grow their Bitcoins, where to invest? There are limited options here and this is especially true with the collapse of numerous cloud-mining companies in recent years.
One area that has become a safe harbour from market volatility and restricted investment options has been Bitcoin's own peer-to-peer ecosystem, with Bitbond leading the way in this area. The core reason that Bitcoin and peer-to-peer lending are an ideal marriage is that both are intrinsically based on decentralisation. In other words, the kinds of people interested in one are likely to be interested in the other. For the borrower this means a wider set of investors and for the investor it is a chance to both grow their Bitcoins and remain true to the ethos of cryptocurrency.
Let us examine this process from the perspective of the borrower aiming to secure a Bitcoin loan. There are many reasons a borrower might choose to seek funds from the Bitbond community over a traditional bank. They may have found the bank's conditions or rates burdensome, their business model may have been a wrong fit for their bank, or they may prefer to operate using Bitcoin over fiat currency. In order to get a bitcoin loan, borrowers don't need to worry about the intricacies of bitcoin difficulty, for example, but simply need to understand how exchange rate pegged loans work and how to exchange their bitcoins for
Whatever their reasons these days the decision to utilise peer-to-peer lending through cryptocurrency is a sound one, but in order to raise the necessary funds quickly and with minimum fuss there are some tips they should take on-board. Now, although many businesses that might struggle to find investors elsewhere will find a receptive audience amongst the Bitbond community, this does not mean they do not need to put some effort into their proposals.
Bitcoin investors are savvy folk and they when making their decisions of where to invest they have options. It is just as important to keep in mind the other proposals that exist as it is to improve one's own. That is, there is no harm in researching proposals that are funding well, analysing how they approached the investor community, and then seeking to emulate that style. This is the key to how to get a Bitcoin loan these days.
Keep in mind that one of the central features of Bitbond is that you will be able to utilise the site's exchange rate pegged loan system. This means you will be able to peg your loan repayments to US dollars so that you do not need to worry about Bitcoin volatility. For more details of how this works check out this excellent explainer. If you are availing of this system let your investors know as it helpfully mitigates the risk for all parties. For the borrower the chief bonus is that freed from concerns about fluctuating prices they can plan their business concerns with a static repayment fee in mind.
Furthermore, it is important to keep in mind that once you have secured your loan Bitbond has provided a comprehensive guide for converting Bitcoin into your local currency of choice once your loan has been funded. This allows users to turn their Bitcoin into fiat currency and so set their business plans into action with minimal fuss.
With all this in mind the borrower should place a strong emphasis, as they would with an application for a business loan, on presentation. When one constructs a business plan what are they trying to convey? Well, the most important bit of information you want to impart to an investor is that it will be possible to repay the loan in a timely fashion. It sounds simple, but even a cursory glance at various Bitcoin peer-to-peer lending websites reveals that many users do not provide sufficient details for investors to assess the risk/reward ratio.
For instance, it is not uncommon for users to seek loans based on cloud-mining, often requiring long-periods prior to repayment, but borrowers often fail to provide the calculations that have led them to believe their own investment in mining will pay off. When one considers that many investors, especially those with large Bitcoin reserves, were likely miners at some point in the past themselves, it is crucial that they can see your long-term game plan. Small sellers, such as those running an eBay store, could speed up their own loans by listing their current sales, expected sales arising from new stock, and important sales-periods relating to their business (such as Christmas).
Furthermore, it is no harm assuring readers that one has the potential to repay the loan through others means as is common on many peer-to-peer lending sites. It is important that people know you are not recklessly putting all your eggs in one basket. Show the investor you have diverse skills in order to become part of their diversification portfolio. Keep in mind you are trying to discover the best means of how to get a Bitcoin loan.
Another, all too often overlooked, element of securing a loan to set your business in motion is providing as much personal information as is feasible. It sometimes happens that a decent proposal for a loan is posted, but there is a certain vagueness attached to the poster. This is always going to be detrimental in a world where, and this cannot be stressed enough, the point is to convince your peers that you are a better investment than what might be a similar proposal, but with more security.
In other words, given the choice between two equally interesting proposals for investment one is more likely to go with the one that has more specifics. To help you in this regard see the following excellent guide to completing the perfect application.
For instance, a strong proposal will include as much social media about the borrower as possible. If this seems intrusive then one misses the point that peer-to-peer lending is contingent upon reputation. The longer one has been around online, perhaps with an operative eBay store of standing, the more the investor is assured this is a viable venture. This may not necessarily even mean posting explicitly personal information, but simply showing that your business or previous businesses have a history.
In many ways, you are simply revealing more about how competent you are in your chosen field (or, conversely, that you will be able to transfer your skills to a new one). Do not overestimate the lender’s requirement to invest with confidence. You can help to contribute to their confidence by ensuring you get a solid rating on Bitbond. One of the first things you will notice when you use the site is the A-F rating system and in order to succeed here providing lots of information is crucial to a good rating.
The application process is, it should be noted, streamlined and notably easy to use. Upon signing up you will be asked to provide some personal and contact details as one finds on most sites. Alongside these are the more important employment, residential, credential, and identification documents that you should have ready prior to submitting your proposal. As one would expect these are formal or official documents such as passports, bank statements, and household bills. The process is remarkably quick and your proposal will be ready in no time at all.
In fact, Bitbond reviews all applications within 24 hours. Furthermore, your documents are never shared with any third parties. With approval occurring at this kind of pace you will be able to put your business plan in place much faster than if you had opted for a more traditional bank loan application.
Now, assuming you have provided a detailed proposal for your investors, worked hard to ensure a solid rating, and made yourself available for inquiries how else can you improve your chances of funding? One overlooked angle in peer-to-peer lending is the use of social media such as Twitter or Facebook. This is especially true for those borrowers that are a part of the many cryptocurrency communities out there. Remember, your proposal is essentially an advertisement for your project.
To stand out from the crowd, always ensure you put the effort into all facets of your pitch: presentation, background, and advertisement.