7 Vantagens do Uso de Bitcoins

Antes de adentrar às vantagens dos bitcoins, uma dica: se você chegou até este post sem saber exatamente o que eles são, não deixe de ler nosso ‘Guia Completo do Bitcoin’. Nele, você entenderá como funciona, as maneiras de adquiri-lo de revertê-los em moedas reais e como os seus valores são cotados.

Dito isso, vamos à nossa conversa de hoje. O objetivo deste post é apresentar as principais vantagens dos bitcoins. Explicaremos o que são e como são usados.

Quais as principais vantagens dos bitcoins? Acompanhe!

Bitcoins: os “dólares da internet”

Como qualquer outra, esta moeda digital pode ser comprada e vendida nas bolsas de moeda. Ela fica armazenada em um dispositivo chamado de carteira digital (wallet) — as informações necessárias para a realização das transações, na verdade — e, por isso, são apelidadas de “dólares da internet”.

De acordo com a Blockchain, uma das mais populares carteiras de bitcoins do mundo, em janeiro de 2016, foram registrados mais de 15 milhões de bitcoins em circulação no mundo. Em fevereiro de 2015, a nível de comparação, eram mais de 13 milhões.

À medida que a informação em torno das vantagens dos bitcoins se torna mais ampla, assim como a confiança dos internautas para fazer transações online totalmente em moedas digitais, eles vêm ganhando popularidade. Uma reportagem recente da Folha de S. Paulo mostrou que, em 2016, as transações atingiram R$ 70 milhões. Isso mostra que os ‘dólares da internet” já estão sendo adotados no país.

7 vantangens dos bitcoins que você precisa conhecer

Um dos passos iniciais para a utilização de bitcoins com total confiança e de maneira produtiva é conhecer as vantagens de uso; saber como este modelo de moeda é diferente do convencional e o que pode oferecer de benefícios. É o que veremos a seguir!

1- Tarifas mais baixas que as moedas tradicionais e zero impostos

Ao realizar transações com moedas convencionais, os usuários podem pagar tarifas que variam entre 2 e 9%. Obviamente, as transações são diferentes de pessoa para pessoa.

Já os custos associados com bitcoins são menores. A tarifa média de transação custa, geralmente, menos que 1% da transação.

Portanto, do ponto de vista tarifário, as vantagens dos bitcoins são maiores do que as transações tradicionais. Por outro lado, também não há nenhuma maneira de um terceiro interceptar essas transações. Portanto, não há nenhuma maneira viável para a implementação de um sistema de tributação desta moeda digital.

2- Bitcoin pode ser utilizado em qualquer lugar do mundo

Bitcoin é uma moeda global. Diferente das moedas convencionais, ele pode ser utilizado amplamente sem bloqueios de fronteira, sem as tradicionais burocracias do mercado internacional. Este é o grande ponto de inflexão da moeda bitcoin: uma revolução econômica que está eliminando as fronteiras comerciais ao redor do mundo.

3- Bitcoin é uma moeda que não pode ser congelada

Por mais que o mundo se diga globalizado, na prática, vemos diversos países praticando o que se chama de “protecionismo”. Há embargos de moeda, sobretaxas e impostos que insidem sobre transações internacionais para desencorajar o livre comércio.

Isso não é possível quando se trata do bitcoin. Trata-se de uma moeda que não pode ser congelada, pois não é controlada por nenhum governo ou empresa.

4- Bitcoin não incorre em riscos com o colapso de um sistema financeiro

Em 1971, os Estados Unidos aboliram o padrão-ouro (o valor da moeda cotado a partir do valor do mineral). Desde então, o Dólar varia conforme a confiança naqueles que o fabricam: o Tesouro e as instituições bancárias.

O Real também é uma moeda fiduciária. O problema é que, quando a economia entra em colapso, por diversas razões (políticas, incidentes ambientais, escândalos de corrupção), as moedas convencionais perdem valor.

Teoricamente, o bitcoin vem para resolver este problema, pois não é regulado por nenhum órgão e não depende da confiança no mercado financeiro tradicional. Só depende de matemática, de um algoritmo gerido por uma rede descentralizada ao redor do mundo.

5- Bitcoin pode ser doado sem a autorização do governo

Todo e qualquer valor de movimentação das moedas tradicionais são controladas pelo Estado. Assim, ao fazer uma doação, um patrocinador precisa explicar à União de onde vem e para quais fins se destinam os valores.

Em 2010, por exemplo, quando os Estados Unidos entraram em guerra contra a organização Wikileaks, proibiram bancos e empresas de fazerem doações para financiarem a iniciativa. Logo, os organizadors do Wikileaks pediram para que os usuários fizessem suas doações utilizando bitcoins, o que não podia ser controlado pelo governo.

Pagamentos em bitcoin podem ser feitos e finalizados sem a necessidade de informações pessoais. Parece pouco, mas esta liberdade está revolucionando a forma com que se faz filantropia ou com que se financia iniciativas que os governos não querem apoiar (obviamente, esta liberdade também pode ser utilizada para o mal, para a compra e venda de drogas).

6- Bitcoin é mais seguro do que as moedas convencionais

Devido ao fato de que a informação pessoal é mantida escondida de olhares indiscretos, Bitcoin também protege contra roubos de identidade. Com ele, é possível fazer backup e criptografar as informações para garantir a segurança do dinheiro.

A menos que um usuário divulgue seu endereço de carteira publicamente, ninguém pode rastrear suas transações. Ninguém, exceto o proprietário da carteira, saberá quantos Bitcoins eles têm.

Mesmo se o endereço da carteira foi divulgado, um novo pode ser facilmente gerado. Isso aumenta a privacidade, quando comparado a sistemas cambiais tradicionais, em que terceiros têm potencial acesso a dados financeiros pessoais.

7- Bitcoins são mais difíceis de serem roubados do que as moedas tradicionais

Toda a estrutura do sistema de bitcoins converge para que o controle da carteira seja totalmente de seu proprietário. Ninguém pode roubá-los, a menos que tenha acesso físico ao computador de um usuário e eles enviem os bitcoins para sua conta. Ao contrário dos sistemas de moeda convencional, em que apenas alguns detalhes de autenticação são necessários para obter acesso às finanças, este sistema requer acesso físico, o que o torna muito mais difícil de roubar.

O que você achou destas vantagens dos bitcoins? Deixe um comentário!

Saiba Sobre Consolidação de Crédito

Note: This is another blog post is directed to our Brazilian community. Feel free to read our English version if you want 😉

Estou endividado, e agora?

Não se desespere se está endividado

Não se desespere se está endividado

Meu último artigo foi sobre como o BTCjam funciona em termos gerais e algumas dicas para aumentar as chances de conseguir um empréstimo conosco. Esse artigo tem outro objetivo, o de explicar um dos melhores usos da ferramenta: ajudar as pessoas a quitarem dívidas pegando um empréstimo no BTCjam a juros mais baixos.

Esse assunto é cada vez mais pertinente, dado que o Brasil o país com maiores juros do mundo. Para ter uma ideia, é o campeão mundial isolado em juros no cartão de crédito.

Atuais taxas de juros no Brasil

Conforme levantamento da Proteste com base em 108 cartões de 12 instituições financeiras, o brasileiro pagou em julho de 2015 na média 378,76% de juros no crédito rotativo. O segundo colocado nesse ranking nefasto é a Colômbia, com 62,51%. Ou seja, no Brasil se cobra mais de 5 vezes os juros cobrados na Colômbia e mais de 9 vezes o cobrado no Peru, terceiro colocado.

Enquanto no Brasil a taxa de juros que o cartão de crédito cobra é 14% ao mês, a taxa cobrada nos Estados Unidos é de 14%, mas ao ano! Isso significa que um brasileiro paga num único mês os juros que um americano paga em 12 meses! E a renda do americano médio é 5 vezes maior que a do brasileiro…

Não são só os juros no cartão de crédito que são tão altos no Brasil. Os juros do cheque especial também são exorbitantes. Segundo o Procon de São Paulo, a média da taxa de juros que bancos cobram no cheque especial é a maior em 10 anos, chegando a 11,49% ao mês. Mesmo modalidades de empréstimos mais baratas ultrapassam na média 6% ao mês.

Porque os juros no Brasil são tão altos?

Afinal, porque os juros no Brasil são tão maiores do que no resto do mundo? Diversos economistas analisaram essa questão e a resposta não é conclusiva. São vários elementos que compõe os juros cobrados do consumidor, mas podemos resumi-los em quatro principais: margem de lucro do banco, impostos, competição e inadimplência. A seguir vou explicar um por um para quem tiver curiosidade:

  • Margem de lucro: como qualquer empresa, os bancos tem acionistas que investiram na empresa em troca de retorno. Bancos visam lucro para remunerarem tais acionistas com dividendos.
  • Impostos: Governos taxam não só os cidadãos como as empresas. Quanto mais imposto, mais juros o banco cobra das pessoas. Sabidamente o governo brasileiro é uma máquina inchada e precisa se financiar cobrando altos impostos da sociedade.
  • Competição: Os cinco maiores bancos brasileiros controlam 80% do crédito. Cenários de pouca competição como esse não favorecem a queda de preços (nesse caso juros). Bancos são protegidos por legislações engessadas e por demandas financeiras que afugentam startups que buscam soluções inovadoras para melhorar os serviços prestados aos consumidores.
  • Inadimplência: Via de regra, quanto mais inadimplentes, maior os juros. Como no Brasil não há qualquer sistema nacional de crédito positivo, os adimplentes pagam juros maiores para cobrirem a falta de pagamento dos inadimplentes. Isto que cria um ciclo vicioso, uma vez que os juros aumentam gerando mais inadimplentes, inadimplentes que causam mais aumento da taxa de juros, gerando mais inadimplentes… O BTCjam desenvolveu seu próprio sistema de crédito positivo de modo a que pessoas paguem taxas de juros mais justas, conforme sua capacidade de pagamento. Saiba mais sobre como o BTCjam funciona.

O conceito de Consolidação de Débito

Levanta a mão quem nunca entrou no cheque especial! Eu já entrei, e várias vezes. Aquela sensação de olhar o extrato, dia após dia e ver o débito crescendo era angustiante. E aquela dívida no cartão de crédito? Me lembro claramente uma viagem que fiz para Miami e me empolguei com os preços baixos. Acabei gastando mais do que podia arcar quando veio a fatura e não consegui pagar tudo. No mês seguinte a dívida veio corrigida em mais de 14%!

Enfim, é quase certo que você já passou por uma situação semelhante, não é verdade? Por vezes, uma dívida gera outra e mais outra e quando a pessoa vê está encalacrada com várias dívidas e comprometendo grande parte de sua renda só para pagar as parcelas. Para ajudar a sair desse ciclo, uma das soluções é trocar as dívidas mais custosas (as que cobram juros altos) por uma única dívida mais barata (com juros menores). Essa operação tem o nome de Consolidação de Débito.

Qual seria a solução para pagar menos juros?

Saia do ciclo de dívidas consolidando seus débitos

Saia do ciclo de dívidas consolidando seus débitos

A resposta à pergunta acima é Consolidação de Débito. Em vez de pagar 14% ao mês para o cartão de crédito ou então 10% no cheque especial, é preferível fazer um empréstimo no BTCjam, onde tomadores pagam em média 6% ao mês e economizar muito em juros. Num exemplo de uma dívida de R$5 mil com juros de 14% ao mês com 12 parcelas, ao consolidar a dívida com juros de 6% ao mês, a economia gerada passa de R$280 por mês ou R$3.400 no total. Lembrando que á dívida original era de apenas R$5 mil, ou seja, consolidar a dívida permite se economizar 64% da dívida original!

Conclusão (TL:DR)

Espero que tenham gostado do artigo. Tentei apresentar o conceito de Consolidação de Débito para quem não o conhecia e explicar como o BTCjam ajuda as pessoas a conseguirem quitar suas dívidas com juros mais baixos que em bancos ou operadoras de cartão de crédito.

Não perca tempo, simule um empréstimo agora no BTCjam e veja como podemos ser de grande ajuda a pagar sua dívida economizando em juros. Se você conhece alguém com dívidas, recomende o BTCjam. Afinal, quem é amigo de verdade não deixa amigos em dificuldade.

Ofir’s Four Rules for Successful Bitcoin Investments

Today we are pleased to have a guest post here on the BTCjam blog courtesy of Ofir Beigel. Ofir is an Entrepreneur, Bitcoin lover and blogger at 99Bitcoins.com. His site is a great resource covering many awesome topics with the Bitcoin industry. You can follow Ofir on twitter here: @ofirbeigel

My 4 rules for successful Bitcoin investments  

If you’re investing with Bitcoin by buying and holding long term, – you’re doing it wrong. Today I’ll try to explain four basic rules that I follow in order to maximize my Bitcoin investment potential.

It has been almost a year since I got acquainted with BTCJam and now I realize how little I knew about Bitcoin investments back then. Keep in mind – what is written in this post is my own personal opinion about investing and you can choose to accept it or reject it, but never do anything just because “someone said so”, always understand the motive for your actions.

  1. Diversify your Bitcoin portfolio

I have many currencies I deal with, and for each currency I have a different portfolio. For example, for US dollars I have some of my money invested in stocks, bonds and some in Bitcoins. Under this portfolio Bitcoin will be considered as a stock, mainly due to the fluctuating exchange rate and the fact that I do not get a steady stream of income out of it.

If I look at my Bitcoin investment portfolio, just buying and holding the currency itself would be considered as normal “cash” and my cash wouldn’t be bringing in any return. It’s the equivalent of just keeping your money at the bank without investing it.

When investing in BTCjam under this portfolio I consider the investment to be a corporate bond with a specific BTCjam rating.

If I wanted to invest in stocks under my Bitcoin portfolio I’d need to find a company that is valued in Bitcoins and not in USD. However, I don’t see any reason to do so as BTCjam’s investments yield competitive returns.

Since I earn a substantial amount of my income in Bitcoin I have to make sure I make the most out of it. Here are some of the things I do:

  • Keep a certain of my Bitcoins in the form of the currency itself (cash)
  • Invest some of my Bitcoins in BTCjam so they will continue to grow (bonds)
  • Exchange a portion of my Bitcoins to USD (another type of low risk investment)

Interestingly, BTCjam also saw the importance of diversification and received feedback that they acted on – with the launch of AutoInvest feature about a week ago. Instead of having to browse individual listings, an investor can easily diversify in 100 loans with specific quality and term parameters! One button diversification, now that is an EASY button.  But if you are the investor who wants to control which specific loans get invested in, and want to understand how to do that effectively – read on.

  1. Conduct ample research before investing in someone

I never invest in something I don’t know about. Luckily enough since I’ve been running 99Bitcoins for 2 years now I know a lot about Bitcoin. That’s why when I come to chose an investment I usually look at the following:

Expected Yield and Rate – Most people would prefer to get the highest yield they can. I personally believe that people who have super high yields have a serious risk of not paying back their loan. On the BTC platform the lowest yield I could currently find was 22% and the highest was 37%.

You’ll notice there is a high correlation between the Yield on an investment and the low BTCjam rating of a user. Even though I’m not aware of the whole process a user goes through in order to get the BTCjam rating I’m sure this means something.

I tend to go for a low-middle yields knowing that for shorter term loans there is the be

The user profile – People who are serious about getting their investment and actually repaying it will take care of their profile. Here are some of the things I look out for:

  • The user’s profile picture – nothing spells trouble more than a blank profile picture.
  • Has this user repaid previous loans – I never invest with someone who hasn’t repaid a considerable amount of money in loans in the past.
  • User credentials – Has the user connected his Facebook profile, LinkedIn profile and other profiles to BTCjam. If so it means he is open about his identity which is a positive indicator.
  • How long has this user been a member of BTCjam – I shy away from users who joined in the past 3 months.
  • BTCjam’s rating – This will usually correlate with my own findings about the profile but I treat this as a second opinion to validate my research.
  • What is the investment for – If there is no detailed description for the investment I will not invest. An important question that should be answered is what will the investment be used for.

Here’s an example of my latest investment – you can take a look at the profile and detailed description.

OFIR - img1

  1. Never invest more than you can afford to lose

Probably the most important guideline of them all – Never invest an amount that is crucial for your survival. I’m a believer in Bitcoin but still I keep only a fraction of my entire wealth in it – why ? Because it’s too risky not too.

Whenever I enter a risky investment (e.g. Bitcoin) I try to imagine how would I react if I lost all of it. If the thought is too scary, I just don’t do it – or I lower the investment amount.

Bitcoin is a risky business, and BTCjam investments make it even riskier by lending it to strangers – but if done wisely, these investments can grow your Bitcoin wealth over time.

  1. If you don’t find any good investment – don’t invest!

Sometimes you just won’t be able to find someone that matches your criteria. In this case you’re better off not investing and checking back to see if there are new investment opportunities in a few days or so.

There are so many scammers out there and Bitcoin is still an extremely risky business. For example, in my initial review of BTCjam I also cover a Bitcoin investment website called “Bitcoin Trader”. That site later on turned out to be a HYIP and many users (myself included) lost their money. There is no such thing as “easy money”, make sure to conduct proper research.

To conclude, I believe that if you follow these guidelines your chances for success will increase dramatically. Please remember that this is based on my own personal opinion and experience (I have no formal investment certification). I recently finished getting back a loan on BTCjam and just invested in a new one with a larger amount of money.

Hopefully this one will go well also and I can move on to additional investments and update you about them as well. If you have your own investment tips please feel free to leave them in the comment section below, I’d love to hear them.

Phishing Alert — What is Phishing and how can I avoid it?

Buenos días Jammers!

Thanks to the eagle-eyed Guido P. on Facebook, BTCjam was alerted to a phishing attack.  Now we can warn you about Phishing and how to avoid it.  Phishing is an attempt to trick you into entering your account information into a fake website so they can steal your account. For example, in this current phishing attack they have created a fake version of the BTCjam website to trick you.  Remember that the real BTCjam website will always have a URL that starts with https://btcjam.com and will have the security lock icon next to it.

As you can see, there is almost no difference between the phishing site:

01 - Desctop screenshot22 Desctop screenshot

and BTCjam.com, except the URL at the top.

If you see a suspicious link, always check the URL before you login.  Phishing can also be stopped by using Two Factor Authentication (2FA), as 2FA requires a unique token that is generated by your cell phone that helps prove your identity (in addition to your password).

Be aware of phishing (check that URL!) and always use Two Factor Authentication!

If you find a site that you think is a phishing site, you can report it to Google on their Report Phishing Page.

Until Next Time… Keep on Jamming!

If you need a bitcoin loan, borrow on BTCjam!  If you want to invest, invest on BTCjam!

5 Ways Peer-to-Peer Lending Creates ROI for Investors

Peer-to-peer lending is a relatively new concept that helps borrowers find great deals on loans. In order to finance these types of loans, peer-to-peer lending relies on individual investors who fund each loan in small amounts.

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Source: Shutterstock

This method of lending is fast, efficient, and often lowers the cost of a loan for borrowers; at the same time, it provides a stable rate of return for investors.

Why does peer-to-peer lending offer a higher ROI compared to other investment methods? Let’s take a look at 5 compelling reasons why this form of lending is beneficial not just for borrowers but also for the investors who back these loans.

A Proven Model

Ever since Lending Club and Prosper were founded in the United States in 2006, the industry for peer-to-peer lending has been booming.

These stalwarts have been originating more loans than ever before. Here is the US market’s performance over time:

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Source: Crowdfundinsider

Peer-to-peer lending is now producing over $500 million in loans per month through Lending Club. That’s impressive for an industry founded only eight years ago. It is clear that demand is on the rise and there are no sign of slowing down.

An Avenue for Specific Borrowing

Whether it’s paying down debt or financing bitcoin miners, peer-to-peer lending allows borrowers to obtain loans for things traditional lenders might be wary of.

According to Prosper, debt consolidation loans are one of the most popular peer-to-peer lending loans.

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Source: CreditCards.com

For a bitcoin miner, trying to get a loan from a bank or other traditional lender would be very difficult unless the borrower could provide a specific business case for doing so.

The bottom line is that peer-to-peer lending allows individual investors to be creative in deciding what types of loans to fund for borrowers.

Spreading out the Risk

Those who invest in peer-to-peer loans are able to diversify, therefore, spreading out risk by funding many different loans.

It’s important to understand that borrowers sometimes don’t pay back loans, known as a default. It’s something that cannot be avoided in the peer-to-peer lending industry and even in regular banks. If investors diversify their investments through many different loans, overall investor risk can be reduced.

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Source: LendingMemo

Data pulled from Lending Club shows that when investors diversify their funds through many different loans, they are able to obtain returns that are much better than a high yield savings account. Frequently, these peer-to-peer funds outperform mutual funds and other money management funds.

Helping Borrowers with Not So Perfect Credit

Many borrowers on peer-to-peer lending sites are looking for access to low interest rates while often not having a perfect credit score.

This is one of the reasons peer-to-peer lending has become so popular: it can be easier to get a loan on a peer-to-peer marketplace than going to a bank. For some borrowers, alternatives such as payday loans may levy interest rates at 15%+ p.m, plus fees.

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Prosper credit scores in 2013. Source: Orchard

The average credit scores in the 660-670 range on Prosper’s lending marketplace constitute what credit scoring systems would consider “good” borrowers. This is in between the lower-end “fair” and the upper “excellent” tier of borrowers through the FICO scoring system.

Cheaper for Borrowers, Good for Investors

Large corporate banks are complex organizations. During the process of a loan approval, the loan goes through many different channels which leads to very high overhead in operating costs.  Banks have to comply with more regulations than peer-to-peer marketplaces, therefore, interest rates and overall APR can be extremely costly.

Banks pass the cost of running their banks onto borrowers in the form of pricey fees, high standards for loan approval, and long lead times.

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Source: Foundation Capital

Peer-to-peer lending marketplaces are a faster and less expensive for everyone involved. The whole process is simpler in comparison to what the banking industry must do to lend people money. Due to the lending process being entirely online, peer-to-peer lending market places create an easy and user friendly way to apply for loans.

 

Where BTCJam Stands

BTCJam is a unique peer-to-peer lender in several different ways:

  • By utilizing our unique in-house credit scoring system, borrowers can instantly create a credit profile when they supply us with certain information. As they complete more of their profile, their credit score becomes more accurate and generally improves. A full profile also has the benefit of creating more trust for investors.
  • We are able to leverage the low costs of capital in the developed world with the high costs of borrowing in many countries. Because of this global advantage, we can return to investors a better rate of return and provide more affordable loans for people in developing countries.
  • Because we use the digital currency bitcoin as a transaction protocol, we can connect borrowers and investors globally – a borrower can convert a loan and investors can convert their profit into local currency whenever necessary.

These factors are key reasons why we are able to provide investors great returns.

Here’s how to learn more about investing in bitcoin loans on BTCJam’s marketplace.

 

Why Payday Lending is Such an Awful Deal

We’ve all seen them. Some of us have probably even been tempted to get one. They are generally known as payday loans, although they have many different names – including cash advances, pay advances or unsecured loans.

No matter the name, all payday loans generally mean one thing: horrible rates for borrowers.

COLORFUL ADVERTISING 

Walk past any payday loan shop and you’ll probably see a number of signs in the windows.

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The purpose of these flashy signs is to attract customers who are spontaneous, desperate, and who are looking for a loan ASAP.

Instead of doing that, we’ll tell you exactly what these services really are:

Checks Cashed: This service will take a paycheck and turn it into cash money for a customer.

Cost: In some states, payday lenders can charge at least 3% for this. For someone cashing a $1,500 check every two weeks this would cost $45, or $1,700 annually

Money Orders/Bill Pay: This is an alternative to using checks or electronic payments to pay bills, since cash is not accepted through the mail or online.

Cost: Mybanktracker did some research on Western Union, finding that on average it charges $.70 per money order, which would be $8.40 just to pay a monthly bill yearly through the mail.

Title Loans: Also known as a secured loan, this is where a lender will keep something of value as collateral from a borrower. Usually, a car title is used.

Cost: According to Car Title Loan, the average percentage rate of these loans can vary between 36-360% in annual percentage rates, or APR.

Payday Loans: These are short-term loans designed to help a borrower short on money until their next paycheck.

Cost: Usually a flat rate, for example $10 to borrow $100 for two weeks. Lenders must also inform borrowers of the annual percentage rate (APR) of these loans. Which leads to more than 200%!

MISLEADING ADVERTISING

Slick advertising targeted towards borrowers trying to make ends meet is a well-worn marketing tactic in the short-term lending industry.

Often payday loan shops will entice prospective customers by showing them a deal right on the window. It is not uncommon to see displays like this:

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Source: Wikipedia

The question is, how is it possible for these lenders to lend borrowers hundreds of dollars for only $20? In the short term, these lenders make their loans look like a flat fee loan. What the loans really are is an extremely expensive credit card if borrowers don’t pay back the loan in time.

COST CALCULATION

Calculating the Long-Term Cost of a Payday Loan

There are deceptive issues with the so-called flat fee structure that payday loans use.

Take the example above for the CashMoney payday-lending store. If a borrower were to obtain $200 for $20 over two weeks, the APR of such a loan is 260% and would cost:

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Source: The Calculator Site

This doesn’t include additional fees that might be levied against a late borrower. According to MoneySuperMarket, a survey found only half of payday loan borrowers are able to pay back the amount owed in time.

For example, payday lender Check Center charges a $15 late fee when payment is not on time – and doesn’t specify on its website how often this could be charged.

In some jurisdictions, payday lenders are required to notify lenders of APRs – you can see an example chart on the Check Center website. The purpose is to serve warning about the expenses of late payment, which can build up immensely over time for borrowers of these types of loans.

Calculating Long-Term Cost of a Title Loan

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Source: Carbucks

According to Bankrate, the cost of a title loan is usually somewhere around 25% for 30 days.

Borrowers must submit a title and access (usually in the form of keys) to the lender as collateral. These loans are usually a fraction of the value of an asset put up as collateral.

25% every thirty days is 300% APR. If a borrower takes out a $5,000 loan using a title to secure it, to pay it back in one year would cost:

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Source: The Calculator Site

Again, this doesn’t include additional fees that might be levied against a late borrower.

LEGALITY

It’s no wonder that payday loan companies usually set up shop far away from banks and dress up storefronts with colorful, eye-catching signs. If a borrower gets caught in debt to one of these lenders, it is very hard to escape as the costs begin to escalate.

It’s easy to wonder how these lenders are able to stay in business legally – if you fall behind when borrowing money from a payday lender, you can get into some serious trouble.

The Guardian recently reported that the number of complaints about payday lenders in the UK have doubled  in just the past year – sure to bring attention to the problems of payday lenders by lawmakers.

BOTTOM LINE

Stay away from payday lenders. Peer-to-peer bitcoin lending is often a better alternative to borrowing money.

Click here to see how a  bitcoin loan is an option.

Simply put, payday loans are not worth it. There are plenty of other options for borrowers.

Untangling Peer-To-Peer Lending, Crowdfunding, and Microlending

In my previous post, I provided a short overview of the evolution of the lending space and the role of banks herein. Over the past years, especially as a result of the financial crisis and arising regulations, banks have pulled back from issuing loans. This has paved the way for alternative financing solutions like Peer-to-Peer lending, crowd-funding and micro-lending.

The most significant similarity between these three services is that there is no involvement of traditional financial institutions. In this post I will discuss their most important features, explain which markets they serve, and show what their key differences are.

Peer-to-Peer Lending

The core concept of Peer-to-Peer (P2P) Lending is a that a group of investors lend to one person or business without the interference of traditional financial institutions. Usually the investors are individuals who are not related to and do not know the borrower. The development of the internet has enabled this new form of lending: an online marketplace that completely facilitates the loan transaction.

An interesting trend in the P2P Lending space is the increased participation of institutional investors and banks. P2P Lending companies can operate more efficiently thanks to the use of new technologies and less overhead cost, thereby making these marketplaces very interesting for both borrowers and investors. According to Charles Moldow, a partner at Foundation Capital, P2P Lending Platforms have a 400 basis point advantage compared to traditional banks.

A notable player in the field in Europe is Zopa (located and operating in the UK). In the United States, LendingClub and Prosper are the first P2P lending platforms who service the US market. Funding Circle and OnDeck also facilitate small business loans through their marketplaces.

A new and truly unique P2P Lending platform is our company, BTCJam! By using bitcoin as a transaction protocol and a global credit-scoring model, BTCJam is the only P2P lending company that operates worldwide.

 

Crowdfunding

Crowd-funding is based on the same principle as P2P Lending: funding takes place by a group of investors. There are significant differences between the two:

First, crowd-funding is typically used for specific projects or ideas and not for personal loans. The second distinct difference is that investors who contribute to a project do not get interest–instead they’ll receive rewards, special perks, or gifts. For example, they may get the first release of an album or the product they supported.

A new development within the crowd-funding industry is the so-called “Equity-Based” crowd-funding: as a reward, investors receive unlisted shares of the company. Equity crowd-funding has been a popular way of raising capital for companies in Europe and Australia for several years. In the United States, equity crowd-funding is only accessible for accredited investors, but this could change soon based on the JOBS Act. The JOBS Act would let non-accredited investors gain access to equity crowd-funding which would dramatically expand the possibility for startups and entrepreneurs to raise capital. Seedrs is an Equity crowd-funding marketplace that operates only in Europe and has been very successful.

A well-known crowd-funding platform is Kickstarter; people have pledged over $1 billion, funding 65,000 projects. Kickstarter is not equity crowd-funded, which prohibits individuals from making long term equity on the products they invest in.

 

Microlending

The main goals of micro-lending are to financing poverty stricken areas of the world and reach underbanked communities. The loan amount is usually very small and the purpose of the loan is usually for personal use. Many of these loans help to finance medical bills, small businesses, education, and agricultural development.

In P2P lending and crowd-funding, there are multiple investors contributing to the loan, whereas in micro-lending, you often see that also the borrowers team up. Loans are provided to a group of people who will vouch for each other, thereby, minimizing the risk of default.

The first micro-lending initiatives did not have profitability as a driver, but over the years some micro-lending institutions have argued that doing good shouldn’t stand in the way of making profit. Opinions remain divided on the subject.

Grameen Bank is one of the first and leading Microcrediting organizations. Besides micro-lending it also offers other financial services. Kiva created an online marketplace to connect investors with borrowers in developing countries. Kiva works with local field partners who assess, distribute, and monitor the loans.

In the chart below I summarized the characteristics of the three financing solutions. The alternatives to traditional banking loans all serve different markets and it’s strongly recommended to research which solution suits your needs.

image – Isabelle de Clercq 

What is Phishing and How to Detect It

What is Phishing?

Phishing is an attempt to steal your identity.  Some of our users have received e-mail that appears to be from BTCJam, but is really designed to trick them into revealing private information. This type of scam is called “phishing”. Under false pretenses, criminals try to get you to disclose sensitive personal information, such as credit and debit card numbers, account passwords, or Social Security numbers.

– These emails may be sent to thousands, usually at random, and appear to be messages from well-known companies.

– The phishing email contains links or buttons that take you to a fraudulent website.

– The fraudulent website typically mimics the company referenced in the email, and aims to extract your sensitive personal data.

Email addresses can be obtained by these criminals from many places on the Internet. Lists of emails may be purchased, or even guessed, If you receive a fraudulent email that appears to be from BTCJam, this does not mean that BTCJam’s computer systems have been breached.

Never open attachments, click links, or respond to emails from suspicious or unknown senders. If you receive a suspicious email that appears to be from BTCJam, report it and delete it.

How to Spot a Fake Email

  1. The sender’s address may include a seemingly official address that mimics a genuine one. It is easy to alter the sender’s email address so do not initially trust it.
  2. Typos and poor grammar are common from fraudsters, and not because they do not know how spell – it is so the phish will not be blocked by email filters.
  3. The fraudster will try to instill a false sense of urgency that usually tells you to check your account right away or something critical will happen if you do not give the information.
  4. These emails will include fake links that lead to other sites. Please hover over the link before clicking it to check if the URL leads to BTCJam.

At BTCJam, protecting our members is a top priority. Remember to report a suspicious or fraudulent email to support@btcjam.com