[Editor’s note: This is the second in a two part series on bitcoin P2P lending by Stu Lustman of p2plendingexpert.com. Stu is a lifer in finance who has spent the last 10 years doing credit analysis and structuring transactions in the equipment finance industry. Almost 2 years ago, he started his blog on marketplace/peer to peer lending to share how a commercial credit professional would look at and analyze these loans. For the last 6 months, his loans have included lending in Bitcoin as well across 3 different platforms.]
Now that we have outlined what makes lending in Bitcoin different from lending in USD or any other fiat (government issued) currency lending, let’s look at the platforms themselves.
BTCJam (Jam) is the largest BTC based peer to peer lending platform. It does twice as much loan volume as the next largest platform. They are the largest and they are the best funded from Silicon Valley investors. Jam was founded by a Brazilian, Celso Pitta, who was looking for ways to increase the use and adoption of Bitcoin both in Brazil and here in the States. Here are some loan statistics, courtesy of the BTCJam website
As the chart shows, the growth has been recent and exponential. Loan volume tripled between April and August and has stayed at or above the August level of more than 1000 loans per month. This is bigtime growth but it can be hard to control growth that fast.
Jam offers 2 loan types: BTC and BitstampUSD loans. BitstampUSD is a loan that locks in the BTC/USD rate when they borrow. It has its advantages and disadvantages so choose wisely.
Let’s look at a loan listing that I invested in on Jam in my own account so we can see what it looks like and what information Jam provides. My handle on Jam is StuP2PLending. If you get an account there, you can follow me and see what I invest in there. Here is the listing. [Read more…]