A Response to Simon’s Open Letter

Dear Simon,

We would like to thank you for being an active member of our community and for taking the time and to write an open letter to us that you have clearly put your heart into.

We are very grateful for all of our investor’s support and everybody who’s been with us this entire time. The platform is growing rapidly: we are now close to 20,000 users, have made loans over 23,000 BTC, and have a credit scoring algorithm that helps investors realize fantastic, 19% year over year returns on average.

BTCJam has a vision that is huge. We try to build an open platform for everybody to lend and borrow with no borders, limits, minimums, restrictions or minimal fees.

A very large part of this vision is due to our lenders who not only make this vision a possibility, but also provide us with feedback to improve or change. BTCJam is a business with limited resources so we have to be extremely careful and smart about how we spend our resources on further developing the platform.

Our investors are one part of BTCJam, and we dedicate our time to each part in order to maintain growth and stability within the platform.

One thing that has been a contstant learning experience for us is to balance transparency vs. privacy. In other words, to decide how much to show about borrowers or investors as to increase trust amongst everybody while also protecting your individual right to privacy.

Let me address your points below to give you an idea:

  • Don’t make money from scammers. Take your cut from loan repayments, not at the time a loan is funded.

We are a company that needs to pay employees, servers and other fees. We incur these expenses whether we have a month with particularly good repayment rates or not. We are not a charity and we want to survive. We are sure that this is in the long-term interest of everybody involved in our company. On top of that, our current repayment rates are around 90% – so this only affects a small amount of loans. Other businesses in the space have a similar origination fee model.

  • Provide information on how much of a loan has been repaid

While this is currently reflected in the credit score, we are evaluating if and how we can show this on the site.

  • Provide information on how much debt a borrower is in, when they are taking out a new loan

see above

  • Incentivize borrowers to repay their loans before taking out new ones

Borrowers with a lot of outstanding loans will feel the impact on the credit score. As an open platform, we want people to be able to weather difficult financial conditions, which sometimes require several loans. We believe that a low credit score and higher suggested interest rates are strong incentives for people to pay back their existing loans quickly.

  • Show a borrower’s bitcointalk and otc-wot links publicly

Not all borrowers would like the public to know that they are in financial need.

  • Allow borrowers to show their linkedin and facebook profile links publicly if they so choose, to improve the trust of their investors

We also do not want to put the borrowers who are not willing to share their identity with the whole world at a disadvantage with the ones who are. The credit score reflects the risk and can be trusted quite well – which we are seeing with our 90% repayment rates.

  • Show how much collateral (bitcoin) a user has invested in the site, and how much they have yet to recieve, so that investors can see they have a vested interest in the community

We think it is very risky for users to borrow and invest at the same time. What if the investments they made default? Suddenly they have an excuse to not pay back their own loan. This can lead to a domino effect that we want to prevent as much as possible.

  • Engage with the community. Ask investors what they would like to see in your product, and implement what they ask for.

We are listening very actively to our user voice, our facebook pages, reddit, bitcointalk, twitter, and other sites where people are engaged with us.

I hope this answer explains that we can’t in every instance fullfil our users needs right away.

As said, we need to balance the wishes of investors with the immediate and long term needs of BTCJam as a business that seeks to provide low interest loans and fantastic returns to millions of people around the globe.

Celso and the BTCJam Team