Replying to Avatar Laeserin

If you want to give someone money, just give it to them. If you want returns on the money you give them, ask for the returns in a contract when you give the money. If you are wary of them simply taking the money and running, split your payments into tranches that track progress.

You can ask for equity and share in the general profits, a portion of the fees produced for X years, exclusive use of particular services, regular dinner parties and online meetings with the project team, attending the project lounge at conferences, etc. or even some combination.

There are lots of ways you can help finance their endeavor and share in their success that don't require debt. If none of these things sound appealing to you, then their project probably sounds unappealing to you, and then you should probably just walk away.

Don't give money to people who are attempting to build something you don't want.
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vinney...axkl 1y ago

> "ask for returns in the contract when you give the money"

This is literally what interest on a loan is... I give an amount of money and at the moment of giving I specify in the contract how much additional you'll pay me back for the value I've provided to you. Like any other service or good.

Unless you mean "returns only if the debtor succeeds"... But that completely de-risks the act of seeking a loan (for the loan seeker), which destroys the very kernel that allows proper free markets to bring value to society. It reduces _information_.

Without the assurance of payment even upon failure, there's no reason every person on earth wouldn't seek billion dollar loans for their crazy ideas, whether or not they are experienced, confident, ready with a plan, etc. You WANT the odds of their success reflected in the agreement. It's basically a spam filter.

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Laeserin 1y ago

I mean returns upon success, like a shareholder or Class A customer.

If they failed, they do not have enough money, with which to repay you. This is the reality, in Bitcoin.

The assurance of payment is trust. Credit scores are just one form of trust.

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vinney...axkl 1y ago

Trust isn't assurance, it's just more confidence, but not 100% assurance.

_Insurance_ is the assurance you're grasping for. If I don't pay my debits, my insurance should cover me. And you won't issue me a loan that my insurance policy won't cover.

Don't trust, verify (that the debtor has insurance)