Quote from: squall1066 on July 31, 2013, 03:09:01 PM

I just dont get it, Why secure it 100% so that you can use this loan to pay off an older loan, So you can re-list that loan for another one???

This is a ponzi? Using previous funds to create more funds?

Tell us what your doing with the cash?

If I just used 100% secured loans to pay off other loans in an unending cycle (doing nothing else) I'd ultimately lose everything to the fees charged by BTCJam.

The reason you secure a loan fully is so that it doesn't matter what you do with the money - as far as the investors are concerned. All an investor in a loan should care about is the borrower's ability to repay the loan. By securing the loan fully, I have effectively already pre-paid the loan (meaning even if I never make a payment on the loan, people lending to me will still get their money back from the sale of the shares backing the loan).

That said, the reason I am paying off the remainder of another loan with this loan is that it is easier to do that than to try to move funds around at the moment. The reason for paying off the other loan is that a bit more than half of the loan is now paid off, which means that the collateral I have on that loan is inefficiently tied up. By paying off the ~BTC6 I have left on that loan, I will be freeing up an additional BTC9 in assets which are currently tied up in that loan.