Diversification is really a key thing with us, and as the commentator mentioned above never invest more than you can handle. You'll continue to see a lot of changes with us going forward, we are getting a lot tougher on fraud and bringing quality borrowers to the platform. If you want to get started throw a tiny amount in 0.1 and invest 0.001 if you wanted across numerous loans. This will give you a good feel for investing on the site and get you familiar with borrowers.
Diversification only ensures that when you get scammed, you have lost too little to go after it. It is death by 10000 cuts.
I'm actually slowly getting out of BTCjam with a profit, but the only reason I have a profit is I stopped diversifying. Instead I poured more BTC in the few people that didn't scam and had a reasonable story. That worked, but getting that list of good borrowers was an expensive horrible experience.
The upshot is you can make money there, but you have to really look out for yourself. Personally I don't think the advice from the site is in investor's best interest, you need to think for yourself.
Very interesting point, and it is good to hear that someone is profitable as I see some horror stories online and some great reviews, but not many unbiased neutral ones. I think more people complain online than post positive occurances, so it is nice to read your post with a neutral point of view (not a hater and not a shill) which is rare!
I know investors with good histories can default, but do you think some kind of pool of investors sharing experiences and good borrowers could help? Of course this would be kept within the group so I cannot see it violating TOS in anyway, but I could see just like people share stock tips and such, that a group of investors that stuck together could be useful to each other.
I based my thoughts off of my own common sense as far as thinking diversification would help, but I can see where your point about picking the right ones and not stretching out too much could be successful, so very interesting points.