[QUESTION] Im newbie, I have few questions about 'Lending' topic.

[Asclepius34]

Hello everyone,
I'm newbie to this forum, but this 'Lending' topic interested me. I have some money in crypto, and I'm ready to lend it to make more money over the interest. So this is my questions:
1.) Is it even allowed to make money over interest?
f.e. Someone is asking 100$ for lend, and we make a deal - 10% interest and payment should be repaid in 10 days. So in 10 days he give me 110$, I made a profit of 100$.
So basically I'm creating a "investment" over lending others.
2) I get how collateral works, but why would someone give me money in altcoins and ask for lend in BTC for example?
I did some reading in this thread, and since I'm newbie I would really like to do ONLY collateral lending's so me and another person don't have fear of getting scammed. I also get that collateral should be higher price than price he is asking for (f.e. 120$ worth of altcoins in collateral for 100$ worth of BTC), but I don't get why would someone ask for lending if they have money in altcoins, can't they just exchange altcoins to BTC?
3) How is "IRL" collateral working?
As I explained, I get some understanding of collateral, but I don't understand how do collateral with IRL things such as phones, ipads etc. works? Especially if we don't live in same country, how is shipping working and who needs to pay for it?
4) If someone is giving me altcoins in collateral, how should I know they are not laundering money?
If I ever meet the person who wants to launder the money and send me "dirty" money in altcoins, what should I do to not get into the trouble?
5) How is escrow in collateral working?
I'm DOWN to do escrows for every landing since it's the safest option for another person, but I don't have full understanding of it. I was thinking that escrow works like this - another person is ready to pay 150$ in ETH in collateral and he firstly sends it to escrow, and I send my lending 100$ BTC to escrow as well. Escrow just give me his 150$ in ETH and mine 100$ in BTC to him.
Am I right with this escrow idea? Or did I miss something horribly  ?


Thanks for your time for reading and answering me, (for senior members I know this will seem pretty funny to them, but as I already mentioned I'm new and I need to learn a lot, so please don't mind if I asked or said something stupid  )

[DireWolfM14]

1.) Is it even allowed to make money over interest?
f.e. Someone is asking 100$ for lend, and we make a deal - 10% interest and payment should be repaid in 10 days. So in 10 days he give me 110$, I made a profit of 100$.
So basically I'm creating a "investment" over lending others.

Yes, it's allowed.  This is a free market so you can charge whatever you like, but there's a lot of competition so it makes sense to charge reasonable fees.

2) I get how collateral works, but why would someone give me money in altcoins and ask for lend in BTC for example?
I did some reading in this thread, and since I'm newbie I would really like to do ONLY collateral lending's so me and another person don't have fear of getting scammed. I also get that collateral should be higher price than price he is asking for (f.e. 120$ worth of altcoins in collateral for 100$ worth of BTC), but I don't get why would someone ask for lending if they have money in altcoins, can't they just exchange altcoins to BTC?

One reason is they need money, but they don't want to sell their coins.  If you are bullish on BTC, have some, but need to borrow $100 worth of USDT for a short time you might want to use your BTC as collateral for a USDT loan, or visa versa if you think BTC is going to drop.  Regardless, if you spend any time around here you'll notice that most people who borrow in this section don't offer collateral, but rather rely on their reputation to get unsecured loans.  It seems like collateral is very rare, as a matter of fact.

3) How is "IRL" collateral working?
As I explained, I get some understanding of collateral, but I don't understand how do collateral with IRL things such as phones, ipads etc. works? Especially if we don't live in same country, how is shipping working and who needs to pay for it?

That's more rare, and usually not something most lenders even consider, largely because of the reasons you mentioned.  Logistically it's less secure, time consuming, and too expensive.

4) If someone is giving me altcoins in collateral, how should I know they are not laundering money?
If I ever meet the person who wants to launder the money and send me "dirty" money in altcoins, what should I do to not get into the trouble?

Grow a pair.  Privacy is one of the benefits of bitcoin, you either accept it and learn to manage it or go back to using fiat.

5) How is escrow in collateral working?
I'm DOWN to do escrows for every landing since it's the safest option for another person, but I don't have full understanding of it. I was thinking that escrow works like this - another person is ready to pay 150$ in ETH in collateral and he firstly sends it to escrow, and I send my lending 100$ BTC to escrow as well. Escrow just give me his 150$ in ETH and mine 100$ in BTC to him.
Am I right with this escrow idea? Or did I miss something horribly

Your too new to be trusted with other people's money.  The escrow will receive and hold the collateral, then you send the loan directly to the borrower.  Once the borrower repays you, the escrow will return the collateral to the borrower.  That's how the borrower knows his collateral is safe.

If the borrower fails to repay the loan, the escrow will send the collateral to you.  That's how you know your investment is safe.

More information here: https://asktom.cf/index.php?topic=5460744.0

[aliveNFT]

Overall, DireWolfM14 has already answered most of the questions, but I'll explain the general picture so you have a clearer understanding of how this works.

Loans backed by collateral are rare now, most of these arrangements rely entirely on trust aka non-collateral loans.

For example: I might borrow $100 from you at a 10% interest rate for one month. Based on factors like my activity level, trustworthiness, or forum rank, you would decide whether or not to grant the loan to minimize your risk.

If you decide to proceed, you lend me the money, and I repay $110 at the end of the term, which would complete the transaction.

There are many nuances to consider, and each lender typically sets their own loan criteria. You’ll need to decide what specific requirements you’ll have, as well as draft some guidelines. For instance, a borrower might agree to pay a penalty of $1 per day for overdue payments. Clear rules like these help everyone involved understand what they’re agreeing to.


You can search for issued loans in this section, you might get lucky and find something with collateral. But 98% of loans here are without any collateral.

[examplens]

f.e. Someone is asking 100$ for lend, and we make a deal - 10% interest and payment should be repaid in 10 days. So in 10 days he give me 110$, I made a profit of 100$.

No, your profit is only $10.

[JeromeTash]

1.) Is it even allowed to make money over interest?
f.e. Someone is asking 100$ for lend, and we make a deal - 10% interest and payment should be repaid in 10 days. So in 10 days he give me 110$, I made a profit of 100$.
So basically I'm creating a "investment" over lending others.

It's basically a business but also just a personal thing or even based on one's religious beliefs. If I trust someone so much, and I am not into business, I could lend then the $100 minus interest… Read Islamic banking 
But one thing for sure is, just like any other investment, It carries certain risks.

[DaveF]

The other consideration is the F word....fees.

There have been a few smaller loans that I have passed on since it's not worth it to loan $100 and get $110 but I have to pay $5 in fees to send it.
Same thing in the other direction. Are you willing to wait and extra few days if when it's going to be repaid they ask if you can wait since fees are spiking and it's going to cost them $12 to send you back the $110.

Many things have to be considered.

-Dave

[Asclepius34]

1.) Is it even allowed to make money over interest?
f.e. Someone is asking 100$ for lend, and we make a deal - 10% interest and payment should be repaid in 10 days. So in 10 days he give me 110$, I made a profit of 100$.
So basically I'm creating a "investment" over lending others.

Yes, it's allowed.  This is a free market so you can charge whatever you like, but there's a lot of competition so it makes sense to charge reasonable fees.

2) I get how collateral works, but why would someone give me money in altcoins and ask for lend in BTC for example?
I did some reading in this thread, and since I'm newbie I would really like to do ONLY collateral lending's so me and another person don't have fear of getting scammed. I also get that collateral should be higher price than price he is asking for (f.e. 120$ worth of altcoins in collateral for 100$ worth of BTC), but I don't get why would someone ask for lending if they have money in altcoins, can't they just exchange altcoins to BTC?

One reason is they need money, but they don't want to sell their coins.  If you are bullish on BTC, have some, but need to borrow $100 worth of USDT for a short time you might want to use your BTC as collateral for a USDT loan, or visa versa if you think BTC is going to drop.  Regardless, if you spend any time around here you'll notice that most people who borrow in this section don't offer collateral, but rather rely on their reputation to get unsecured loans.  It seems like collateral is very rare, as a matter of fact.

3) How is "IRL" collateral working?
As I explained, I get some understanding of collateral, but I don't understand how do collateral with IRL things such as phones, ipads etc. works? Especially if we don't live in same country, how is shipping working and who needs to pay for it?

That's more rare, and usually not something most lenders even consider, largely because of the reasons you mentioned.  Logistically it's less secure, time consuming, and too expensive.

4) If someone is giving me altcoins in collateral, how should I know they are not laundering money?
If I ever meet the person who wants to launder the money and send me "dirty" money in altcoins, what should I do to not get into the trouble?

Grow a pair.  Privacy is one of the benefits of bitcoin, you either accept it and learn to manage it or go back to using fiat.

5) How is escrow in collateral working?
I'm DOWN to do escrows for every landing since it's the safest option for another person, but I don't have full understanding of it. I was thinking that escrow works like this - another person is ready to pay 150$ in ETH in collateral and he firstly sends it to escrow, and I send my lending 100$ BTC to escrow as well. Escrow just give me his 150$ in ETH and mine 100$ in BTC to him.
Am I right with this escrow idea? Or did I miss something horribly

Your too new to be trusted with other people's money.  The escrow will receive and hold the collateral, then you send the loan directly to the borrower.  Once the borrower repays you, the escrow will return the collateral to the borrower.  That's how the borrower knows his collateral is safe.

If the borrower fails to repay the loan, the escrow will send the collateral to you.  That's how you know your investment is safe.

More information here: https://asktom.cf/index.php?topic=5460744.0

Thanks a lot, for giving me better understanding how this works, I really got the better picture. I red everything u said, but I'm still confused on how to maximaze privacy using BTC (do you mean using BTC mixers) before doing BTC to fiat or? It's true that a lot of loans is non-collateral, but as u said my account level is too new to do these kinds of loans, so I will try do few of collateral loans whenever I got the chance. Can you help me with giving me a list of most trusted and secured escrows so I can contact them when I need to?

Also really appreciate for your time, I see that you are on this forum for few years, mine questions surely sound silly to you, but you answered anyways 

[JeromeTash]

Thanks a lot, for giving me better understanding how this works, I really got the better picture. I red everything u said, but I'm still confused on how to maximaze privacy using BTC (do you mean using BTC mixers) before doing BTC to fiat or?

He only said that one of the benefits of using Bitcoin is privacy. For example I can lend you some BTC and then you pay it back in future without me ever knowing your identity. Now try that with fiat and see if it's possible.

It's true that a lot of loans is non-collateral, but as u said my account level is too new to do these kinds of loans, so I will try do few of collateral loans whenever I got the chance. Can you help me with giving me a list of most trusted and secured escrows so I can contact them when I need to?

I can see to lists. Please read through the threads

1. https://asktom.cf/index.php?topic=5047302
2. https://asktom.cf/index.php?topic=276897.0

There is also an escrow platform

There is also an automated platform, very easy to use. Zenland
On Bitcointalk: [ANN] Zenland: WEB3 Escrow
Website: https://zen.land/

If you need third-party mediation, you can always additionally hire an agent who will mediate the transaction
Here is a list: https://agents.zen.land/

[Asclepius34]

Helpful answer, but still confused on how to maximize my privacy with BTC. Talking in general, what way do you recommend for cashing BTC out without giving your identity?

[JeromeTash]

Helpful answer, but still confused on how to maximize my privacy with BTC. Talking in general, what way do you recommend for cashing BTC out without giving your identity?

There are a few p2p exchange do not require KYC verification that can help with that.

1. Bisq (fully decentralized but a bit of a learning curve for someone new who is trying to use it)
2. Robosats
3. Localcoinswap (last time I used it, KYC verification was not required)
4. peachbitcoin.com

[examplens]

Helpful answer, but still confused on how to maximize my privacy with BTC. Talking in general, what way do you recommend for cashing BTC out without giving your identity?

What exactly do you mean by cashing out BTC?
If by that you mean Bitcoin to FIAT conversion, it is practically impossible to do it in complete privacy, but the weak point is the FIAT part of the transaction. You can remain anonymous only in the case of p2p, i.e. direct (offline) exchange, all other conversions require bank accounts where you have already left all your data.

[Asclepius34]

Helpful answer, but still confused on how to maximize my privacy with BTC. Talking in general, what way do you recommend for cashing BTC out without giving your identity?

There are a few p2p exchange do not require KYC verification that can help with that.

1. Bisq (fully decentralized but a bit of a learning curve for someone new who is trying to use it)
2. Robosats
3. Localcoinswap (last time I used it, KYC verification was not required)
4. peachbitcoin.com

Gonna do research, and choose. Thanks a lot 

[DireWolfM14]

Helpful answer, but still confused on how to maximize my privacy with BTC. Talking in general, what way do you recommend for cashing BTC out without giving your identity?

First off, I don't know what makes you think the worst right off the bat.  Why would someone be borrowing bitcoin from you with an altcoin as collateral if they want to launder the altcoin?  If you're holding it as collateral, most likely you'll just send the same UTXO right back to the borrower, so the tracking chain wouldn't be broken for the sake of laundering money.  Also, unless you're planning to lend millions of dollars, nobody is going to investigate you for "laundering" a few thousand dollars worth of bitcoin.

Nevertheless, there's an easy way to deal with the scourge of chain analysis anyway; stop using centralized exchanges that require KYC.  For quickly exchanging from one coin to another, use eXch.  My favorite p2p exchange which you can also use to convert to and from fiat is Bisq.  It's a bit slower, but more versatile.  Along with the others mentioned by JeromeTash, KYC is not required.  As long as you mange your addresses and inputs correctly you're privacy is maintained, and no body can stop you from spending your money.