Btcpop: Borrowing Bitcoin's Passion
“When you are working on a Bitcoin project like Btcpop, the end goal is not just to be considered a success or get rich, the end goal is to improve the world and spread freedom to humanity”
Passion of the Bitcoin Project
Passionate is a term I often find myself using to describe Bitcoin and cryptocurrency users, myself included. To an outsider, or even a new user, this may seem a bit of a stretch. After all, what about digital currencies could incite emotions and feelings strong enough to be considered passion? For me the answer is freedom, an ideal mankind has chased for thousands of years. But the beauty of something as ambiguous and encompassing as blockchain technology is that it can mean something different for every user. So a diverse set of users with different goals, ideals, and personalities can all work together in a single project, each pursuing their individual passion.
That passion is one of the reasons I am so bullish on Bitcoin and the entire crypto economy. It fuels people like myself to go out of comfort zones and share the technology with family, friends, and strangers. This happens even more when you get involved in a bitcoin project. Genuine effort is given throughout the industry to make products and services that not only benefit the customer, but benefit the entire cryptocurrency economy and the world as a whole. When you are working on a Bitcoin project the end goal is not to be considered a success or get rich, the end goal is to change the world and spread freedom to humanity. No place have I witnessed this more than my experience with Btcpop.co
Btcpop.co is a 3 year old P2P Bitcoin lending platform that along with the P2P lending industry, has battled through some dark spots and turmoil. But as Napoleon Hill put it “Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit”. The seeds of greater benefit came from new ownership who continued with the innovative free market ideas and culture that Btcpop started with, but this time with complete integrity, transparency, and competency. The community that battled through the rough times has only grown more passionate and committed to making Btcpop work. There is now a sense of camaraderie and partnership as users participate and voluntarily assist to make the project better. Now, with a full set of working features, competent admin, and a strong community I believe Btcpop.co is ready to make banking with Bitcoin a viable business.
Story of Btcpop
Within the length restrictions of this article, Btcpop’s story as observed by me, an early user, was a roller coaster of ups and downs. The website itself was started by some quality lenders and borrowers who saw the flaws in the other P2P lending platforms and decided they could do it better. The first time I went to the website there was just a handful of loans funding in an excel sheet like setup. At the time Btcpop was way behind platforms like Btcjam and BitcoinLendingClub, but there was something different. Btcpop had a devout dedication to free market tools, new interesting ideas, and an un-moderated community spirit. For that reason, I moved from other platforms and became a user solely of Btcpop.
How it works
P2P lending is very simply lenders borrowing out their bitcoin to borrowers with the expectation of interest on their lent funds. Borrowers ask for a loan with a specified repayment plan and interest rate. They then post their loan request on the open marketplace, hosted inside of a platform like Btcpop, where individual investors can invest any amount to fund the loan. Once founded, borrowers received their Bitcoin and the repayment plan starts.
To prove their creditworthiness borrowers write up a compelling way they are going to use the funds, explain how they plan on paying it back, and convince investors they are a good investment. Borrower's stake their online and real world reputation by completing identity and income verification, linking social media profiles, verifying income, sharing past successes, and at Btcpop they can even offer collateral (more on this later) on their loans to make their loan more compelling to investors.
But, however simple the process might seem, there are fundamental hurdles that needed to be crossed in order to make the process work. #1 being getting people to payback their loans so investors can make a profit.
Early P2P Lending
Btcjam.com in my opinion was the first P2P Bitcoin lending platform. It started very early in 2012. As a first mover, the venture capital funded silicon valley startup started out with a dominating lead. They created a great looking highly functional website with many cool features. There was a pent up demand for this service and growth was fantastic. I believe Btcjam borrowed out and had repaid $15M worth of Bitcoin by the time I got involved in early 2015. Over time, they fostered a great community where users worked together to stop scammers and help educate new investors. Separate websites and groups even formed, all dedicated to helping early users like me thrive. I excitedly thought that this was going to be the bank of the future and Btcjam would be huge!
The Industry wasn’t ready yet
So you may ask yourself, why did a highly funded company in a growing industry with a great website and very strong community flounder? The answer was simply learning the hard way. The features that make Bitcoin secure and useful, also make it very tempting to not pay back when received in a loan. Every seasoned P2P lender who is still lending today likely learned their lessons the hard way (and more than likely lost money). Rating systems fail, reputations fail, great borrowers fail, and the whole industry is flooded with scams.
So in all reality, the high risk medium rewards idea of P2P Bitcoin lending just didn’t yet have the correct tools to work properly.The quality of digital identity needed for banking just doesn’t exist yet, and then there is just the high-risk nature of banking denominated in a currency with volatile 20% price swings and a 500%+ increase in value over the last 3 years. Btcjam eventually halted lending, and regulatory issues caused BitcoinLendingClub to close its doors as well. Bitcoin Lending Club was also a thriving P2P lending company with a strong community.
The Rise and Fall of Btcpop.co #1
In brief, the crumbling of Btcpop was due to similar reasons the whole industry struggled. High default rates, and the general process of learning stuff the hard way. The knife in the back that killed Btcpop was an exploitable loan systems created by management that was simply in over their head in coding. They launched cool new features before they were ready, which caused a compounding effect on problems and eventually things just got out of control. Some coding errors lost hundreds of Bitcoins, and even though Btcpop was growing rapidly, its balances were wrong, it was hemorrhaging money, and frankly growing itself right into the grave. The previous owners eventually realized this, cashed out their chips and sold the company to a dedicated user who still is the current owner today. When it was discovered how truly messed up the back end of Btcpop was, there was an uproar, and previous management went offline and defaulted on their debts. Following these events, there was unsurprisingly a mass exodus of users and Bitcoin from Btcpop. There was a lot of hurt feelings and wallets, mine included.
“The first thing done following the Btcpop sale, which set the whole tone for Btcpop going forward, was the new owner making all of the user balances right at his own cost.”
Rebuilding of Btcpop
The first thing done following the Btcpop sale, which set the whole tone for Btcpop going forward, was the new owner making all of the user balances right at his own cost. This was definitely not a small undertaking and it costs him a lot of money personally to do it. That action alone I think shows the genuine character of the current owner that exists in very few people on this planet. Seeing and benefiting from that action directly, I realized the reasoning for it wasn’t extrinsic, but rather intrinsic in nature. The company was a significant loss of money at purchase and its reputation had been damaged. I believe the same passion that drives Bitcoin users to pioneer through a new risky industry, was used by the owner and community to rebuild Btcpop.
Btcpop Going forward
I personally have a preference to join companies that have failed in one way or another. I think it makes them better and more diligent against future errors. It is for example why I chose Poloniex.com as my exchange after they had been hacked, I figured they fixed it and it was less likely to happen again.
Every system that Btcpop had was picked apart and rebuilt from the ground up. This time features were built right so they actually worked. The whole process was transparent from the start, and could be followed through the Btcpop chat box (aka troll box). The open chatbox is an extremely valuable tool that keeps an ongoing dialogue going in the community.
Shares, Collateral Loans, and Savings Accounts
In my opinion, Btcpop’s biggest innovation is online collateral for loans. We all know collateral is something of value leveraged for a loan that is kept if the loan goes into default. So naturally on a digital money platform, the assets need to be digital in nature. Altcoins fit this need perfectly and can be used as collateral for Bitcoin loans at Btcpop. Btcpop hosts a low volume exchange with 100+ altcoins. The liquidity is kind of low and you're probably not going to be doing much day trading yet, but it works as designed and you can buy and sell small volumes at close to market rates. Or you can just store your altcoins in a secure multi-coin account. You could even store and grow your proof of stake coins, as Btcpop stakes users coins for them.
Btcpop also a shares platform. Shares are exactly what the sound like and are very much just digital shares of companies or projects, that can be traded on Btcpop’s free market platform. The first IPO offering on the platform was dividend paying shares for Btcpop itself. Since then 40+ companies have now successfully launched IPO’s on Btcpop, and recently some well established companies have transferred over their share system and user share accounts to utilize Btcpop’s trading and dividend disbursing features. These shares like altcoins, can also be used for collateral on Bitcoin Loans.
To show how this works here is an example: Bob is an early cryptocurrency adopter who holds small amounts of many different altcoins and runs a small Bitcoin business. Bob has been on Btcpop for a little while and even bought some of Btcpop’s shares at the original IPO. Bob has been heavily verified through Btcpop’s verification process. He has received a physical letter, sent videos, verified phone numbers and social media accounts, and more to stake his personal and digital reputation to get the loan. Bob wants to take out a 1 Btc loan but doesn’t want to sell his altcoins or Btcpop shares. Normally in a P2P bank, he would have to build a significant reputation doing reputation loans (small loans at high interest to prove you're going to pay back). However, at Btcpop, he simply deposits some of his altcoins into the exchange and offers them up as collateral for his loan. His altcoins and shares have a market value of 1.2 Btc so this collateral makes his loan quite secure. A default would cost him his reputation and his collateral, which would be liquidated on the exchanges and repaid to investors. From experience, with even a fairly low interest rate, a loan like this would fund in a couple hours at Btcpop as investors have a healthy appetite for collateralized returns on their bitcoin.
Many new and innovative Features
Btcpop has many more features and is coming out with more every month. Management remains completely dedicated to security for the company and individual user funds. So every feature heavily tested and proven to work before implementation.
Btcpop’s bond market for example has been recently updated. Borrowers can now choose specific assets to collateralize their bond offering as well as pay dividends on their bonds. You can also pay dividends on your bonds now. Statistics have been updated and are available to track all of your assets and investing performance. If you are simply averse to all risk and are just looking for safe secure returns, Btcpop offers interest bearing “Instant savings account” wallets which are risk free and you can withdraw any time. The accounts receive the interest payments on “Instant loans” which are specified “Btcpop to user” loans that fund instantly and have no direct investors. My feature list could go on and on, but all said Btcpop offers a 1 of a kind unique place to borrow and grow your cryptocurrency holdings.
Going back to Napolean Hills quote, I think what Btcpop dark past has been fundamental to the great banking platform Btcpop is today. Just like Bitcoin, flaws and setbacks have tested users and in some cases hurt them. But, as with Bitcoin the system and community has only grown is stronger as a result. The same can be said for Btcpop, and I am excited to continue passionately participating in this project and Bitcoin.