I also don't see the point of this. Having only one of the three keys still leaves you powerless without the permission of whoever holds the others. Am I missing something?
Discussion
Yes, as the borrower, you SHOULD be powerless to withdraw their funds.
The lender "owns" your Bitcoin, so should retain control of the 2 of 3 keys until you pay off your loan.
I agree. I just don't see how that's a defense in people's minds. It isn't any better than just giving someone total control of your Bitcoin. You're still doing that even if you have one key. You've effectively converted yourself to paper Bitcoin when you do that.
Actually a multisig does nothing here, as you can observe the address you sent the funds to, unless the lender moves the coins.
I think the point Jack Mallers is making is that they DO need to move the coins to whoever is providing the local fiat loan, so your coins get mixed with other borrowers, meaning that you only end up seeing "paper" Bitcoin until your Bitcoin is returned at the conclusion of your loan.
It does absolutely nothing except maybe prove your identity if such a model was done KYC free. That's the only way you'd know for sure who owns what (as only the holder of that key could sign it). Other than that, I see multi-sig as moot. You have to give up control of your Bitcoin to get a loan. That makes sense. Holding 1/3 keys doesn't change that fact regardless of any other details. It would be retarded to give a loan against Bitcoin otherwise.
nostr:nprofile1qqswswmx4rkj6d7q05dtafhpkqq2z42fc62s37jvtp642m2jkpfxc2cpz3mhxue69uhhyetvv9ujuerpd46hxtnfduq3wamnwvaz7tmwdae8g6tn9ehx7um5wgcjucm0d5q3wamnwvaz7tmxd9k8getj9ehx7um5wgh8w6twv5nrafuh I get lost in the sauce on some of these threads. Lol Sorry for the confusing replies.
What you're saying makes sense in multiple regards. It isn't controversial to me that he's sending Bitcoin to a lender. No fucking shit. No one would give a loan with zero ability to get it back. They'd be retarded if they did. Or they have access to a money printer.
Actually your previous response makes a lot of sense. Instead of using lending "agents" who subcontract the loans out to geographical providers, why not use local agents who provide the loans directly.
Your coins stay in the wallet you sent them to and you can observe them until they are returned to you at the conclusion of the loan.
The only point here is, what if the lender DOES move your coins 😱
I think it's the same risk regardless. You give up control of your Bitcoin. It may be less risky (meaning the IOU has a better shot of being returned depending on who you give it to), but the underlying reality is the same. You converted to paper Bitcoin. I'm not even shitting on that if that's what people want to do. My only point is that multi-sig doesn't negate that reality. You're essentially selling your Bitcoin and buying it back over time with interest. That probably IS better from a Bitcoin gain vs fiat interest perspective (versus vanilla spend and replace through cash flow). But the value of Bitcoin for ME is that I control it. Loaning against it is marginally better for me because I've put myself right back into the fiat world. I gave up my power again. To each their own, but that is reality. Of course you can reduce the risks and should.
Agreed 💯
To be clear, I don't advocate Bitcoin loans at all.
I am 💯 in the camp of "Not your keys, not your coins"
I get it. People should be aware of the entire story. If they are, go for it. Have fun. Not my cheese.
I have a better picture of multisig after that discussion. Ta. In this case, if one party holds two of three, there is no protection against collusion.
Aren't there smart contracts where the only way the borrowers bitcoin can be liquidated is if they don't make a payment. And if the agreement is upheld to term, the bitcoin is automatically returned to the borrower? With human intervention, to release the value of a bitcoin stash with full peace of mind , as you mentioned in another thread - spend the btc or sell it for fiat and spend it.