Btcpop The P2P Lending Platform that Survived and is Thriving

Btcpop The P2P Lending Platform that Survived and is Thriving

“Banking in Bitcoin finally works! Through learning the hard way and adding collateral, I think Btcpop has finally cracked the P2P lending nut and now has a completely usable and profitable Bitcoin P2P Lending platform.” - Anonymous User

In the early wild west days of Bitcoin P2P lending, it was expected there would be a few casualties as companies duked out who would be the leader in this highly innovative market. It would be a surprise to most that the winner turned out to be a small group of “Plucky Brits” who came in late, but with new bold ideas on how to make P2P lending better. However, the btcpop.co of 2 years ago actually did die with the rest of the industry in a messy miserable fashion. But, the company was resurrected from the ground up by a genuine user turned leader, who decided to take on the challenge and hardship of rebuilding the company for an intrinsic reason.

P2P Bitcoin lending of 2 years ago: The next Big Thing

As Bitcoin's primary use is as a financial tool, it would seem obvious that early Bitcoin companies would be financial in nature. So one of the obvious first ideas would be to build a Bitcoin bank. Early companies popped up and there was a great influx of money and interest to the projects.

If you know anything about Bitcoin you likely know that each wallet where Bitcoins are stored is extremely secure. So unlike fiat money, Bitcoin users really don't need a bank for security or for any convenience using their money. The technology itself handles the security. And as a digital currency, there is really no need to put it in a bank to make it more usable. The thing you do need a bank for is lending and earning interest.

How it works
Because Bitcoin cannot be created out of thin air like in the fiat fractional reserve banking system, banking with Bitcoin is a little different. As Bitcoin is P2P money, the only reasonable solution is transparent P2P borrowing and lending as well. 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 for these loans. The do this 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 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. 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. When I first started and found this community, 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. 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 pseudonymous currency with volatile 20% price swings and a 500%+ increase in value over the last 3 years.

Story of Btcpop
Within the length restrictions of this article, Btcpop’s story as observed by me, an early user, is eventful at best. The website itself was started by some quality lenders and borrowers who saw the flaws in the other systems 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. The only real differences between Btcpop and any other site was their dedication to free market tools, un-moderated community spirit, and a road map to try out cool innovative features such as savings accounts, insurance, shares, and collateral.

The Rise and Fall of Btcpop.co #1
In brief, the crumbling of Btcpop #1 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 hand. 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 large 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
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 as my exchange after they had been hacked, I figured they fixed it and it was less likely to happen again.

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. From there, each system was picked apart and rebuilt from the ground up. This time they 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 chat box is an extremely valuable tool that keeps an ongoing dialogue going in the community.

Btcpop Going forward
With everything rebuilt and functioning properly, I feel Btcpop and it’s innovative features, are ready to create a whole new and much better way to do P2P banking.

SharesCollateral 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. 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. Along with Altcoins, Btcpop also shares to the platform, which can also be used as collateral. The first IPO offering on the platform was dividend paying shares for Btcpop itself. 40+ companies have now successfully launched IPO’s on Btcpop where there shares are bought and sold in within Btcpop's free market trading platorm.

Example Case
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. His license, income, address, social media, have all been heavily scrutinized before verification and he even had to receive a letter in the mail to prove his address is legitimate. 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 your 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 and consist of altcoins with decent sized market caps, so this collateral makes his loan quite secure. A default would cost him his reputation and his collateral, which would be liquidated on the altcoin and share exchanges.

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.

Growing feature list

Btcpop has many more features and is coming out with more every month. But this time they are launched only when they work correctly, and have been heavily tested. Btcpop’s bond market for example has been recently updated with the ability to choose specific assets to collateralize your bond offering. You can also pay dividends on your bonds now.

Statistics are available for all your assets, and 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. Security is a #1 priority, and long time users already know from experience Btcpop takes keeping its users funds very seriously with no exceptions. But, if you also want to learn P2P lending the hard way, you are free to try and fund scam loans and take extreme risks to your hearts content. Just don’t expect any sympathy in Btcpop’s chatbox.

Promising Future
“Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit”- Napoleon Hill. The seeds of greater benefit for Btcpop came from new ownership who continue 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, and 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 P2P the next big thing it was suppose to be 2 years ago.

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