Look guys, there does indeed a place where loans with huge interest rates like the ones being discussed in this thread happens all the time: The loansharks business.

Now, the interest rates for you get from those upstanding individuals are all over the place. In some super-desperate situations it can even be a daily 10% but, in general, it is usually nowhere near that high. 10% Monthly (A bit above 2% weekly, which puts it very close to the BTC rates) is quite usual in some low-risk markets. That is, there is some collateral, and the shark is not lending to a (known) crack addict.

The thing about loanshark loans is that they're a very personal, almost intimate sort of loan. The loanshark knows you personally, knows where you or your grandpa live. On the other hand you know that, in the case that you cannot pay back, then you -or maybe sweet old grandpa- is going to get a visit by some dudes with lousy manners and baseball bats. Even knowing all this, people who desperately want to pay still default, because that's just how the world works. So faces are rearranged and bones get broken.

If the defaults happen when there is such a clear incentive for the borrower to avoid them at all costs, then how is it possible that the BTC borrowers can pay similar rates with such certainty as to be able to properly fund a company giving 1.5% return weekly? I mean, on one side we have an almost-anonymous, zero-collateral, electronic, distant transaction with some technical-minded guy in the internet and on the other we have a personal, with-collateral, in-real-life one with some huge dude with plenty of bats in a shady part of town. And while sharkloans have plenty of losses somehow BTC loaners are secure enough to ask for investors to come and join the good life?

Now, I am not saying that it is impossible for that to happen. I bet lots of people do pay their loans properly. But having enough people taking big enough loans, for long enough to fund a good-sized operation and having all of them properly pay back their loans? while still possible it's *extremely* unlikely. The winning the lottery 3 times in a row kind of unlikely, the one that smells fishy. Sorry dudes, but I really don't think you're better than loansharks at getting your loans paid back, yet you keep increasing your operations and asking for more capital.