What's your rate been if you don't mind sharing?

The market obviously would have done far better, but the interest from Lending Club has always been solid. Yeah just a minute let me go get an accurate number.

5.92 for me.

nice!

Which is rather lower than it was.

It was up in the mid sixes.

So now I'm a bit chapped.

I was over 10% for the first six months

I don't look at it much, it just makes money.

and then....

@Deleted User i got into lending club back in 2014. I stopped buying notes about 2-3 years ago because i had an inordinate amount of defaults. i used a screen on what used to be called nickelsteamroller.com that showed very low default rates. the defaults in my portfolio exceeded what i thought i should have had by a lot. my return was about a 6% or so (according to them - which is higher than what it actually should be). with the risk of fraud and abuse, the understanding that the company makes money off of originations (incentive to make loans at any cost - even to those who shouldn't get loans), and lack of liquidity(I need a higher return than 6% for the lack of liquidity) I have decided to discontinue investing in LC notes. If you are looking for a 6% or so yield with good liquidity i can point you to some preferred stock

What tranches do you primarily invest in? @Why Tea

Point me at some preferred stock then.

@Zyzz That's exactly why I stopped automatic investing.

@Why Tea CLNS-J, AHT-I, TWO-C. Those are all the ones I am in.. they all yield ~7%

Thanks for the tip, @Zyzz

So Lending Club loans are financed by masses of Lending Club investors?

Correct

A loan is split up into $25 segments called "notes"

So you buy a bunch of $25 pieces of different loans @Rick

@Rick So if one loan goes bad, it doesn't hit you very hard if you own many notes because it's a very small fraction of your portfolio.

It's similar to investing in a bond fund.

except you're tapping into consumer lending, not corporate or municipal lending

@Zyzz Thanks I think there's definitely a lot to that Greater Fool Theory. I've thought for a long time about how one might price bitcoin, and here is my swing at it: Bitcoin's main use is as a transaction network. If you want to transfer money to someone you could use one of several networks, like bank networks etc, or you can use Bitcoin. If you want to transfer money and decide to use the Bitcoin network, you first buy bitcoin and then send it to someone who sells the bitcoin. Now on your end you are trying to pay the amount owed plus a transaction fee, on the other end someone wants to get the amount owed. To simplify let's say the transaction is instantaneous (otherwise let's add a bitcoin volatility premium to the amount of bitcoin you want to send). So as someone looking to use the Bitcoin network as a service, you don't really care what the price of bitcoin is, you are trying to settle something in dollars and you are merely using bitcoin as a medium. I made the simplifying assumptions the transaction is instantaneous and let's say both buyer of bitcoin and seller of bitcoin can and do immediately exchange the dollar for bitcoin and then bitcoin for dollars.

So then to the people using bitcoin as a transaction network it doesn't really matter to them what the price of bitcoin is under these conditions, since it's only a medium for them to get dollars from one place to another.

But there are other people on the sides of that bitcoin for cash exchange, the guy selling the transferer the bitcoin, and the guy buying back the bitcoin from the transferee. Let's simplify the assumption that it is some how the same person.

So this guy holds bitcoin until people want to use his bitcoin for their transaction

You have to pay him to not hold cash

and he makes his money on the difference between what you pay for X bitcoin and what he pays out for X bitcoin to the other person

So the guy who holds bitcoin makes money by selling bitcoin high to the transferer and buying it low to the transferee. And the thing that stops him from just screwing over the transferee by not buying back the bitcoin is that there are other people who want to get in and provide this same transfering money service using bitcoin

So in the end owning bitcoin winds up sounding like owning a substrait of the infrastructure of a payment network.

So even though it's not perfect I think of bitcoins as like shares of american express or something

@Deleted User Interesting. I have seen a few Lending Club loans on credit reports. Never know that's what it was, though.

@ThisIsChris i certainly understand the demand for wanting to transact in crypto currencies but it just seems like a lot of buying and selling. i know very little about the FOREX markets and have a very rudimentary understanding of what causes currency appreciation and depreciation. But people must store their wealth in certain currencies (not everyone is going to hold 100% gold) and those currencies are usually of more stable countries (USD, Euro, GBP, JPY, CHF). I do not see BTC as stable. If you want to liken it to commodities, metals in particular, you have gold which central banks will hold and individuals will hold as a store of value. there is clear demand for long term ownership as it is agreed gold is a store of value. take an industrial metal like copper or silver. these metals have an end use. ie: they are consumed. Also new supply is important to consider as well. How is BTC created?

@Zyzz I totally agree with you that it is mostly buying and selling, I've just been trying to create a "fundamental analysis" of bitcoin to see how to think of it having an intrinsic value.

Bitcoin is created as a reward for "miners" who provide all the computing power to keep the Bitcoin network going.

@Zyzz The explanation I've heard is that BTC is computational proof of work. Not sure how that confers value but that's the response I've gotten.

That reward is also decreasing until it will eventually taper off to nothing

@ThisIsChris interesting. this concept sounds a little foreign to me. the idea of computing power needed to keep the bitcoin network going. or is that tech jargon for essentially being a market maker (which is what you described in an above paragraph)?

@Deleted User i guess i dont understand why computational proof of work is needed? is it in the same concept as having to physically mine for gold or silver?

@Zyzz So every node in the bitcoin network (including your own computer if you want) there is a record of ever bitcoin transaction, this is used to build a ledger that shows how much bitcoin each person holds. Persons on the ledger are represented by your wallet, which is a long code that people use to send you money.
Given this, if I want to send money from my wallet to your wallet, the network needs to do a lot of computational work to check the ledger to confirm that I have enough bitcoin on my row of the ledger such that I am allowed to take some of that and put it on your part of the ledger. The computational work of verifying that on this giant decentralized ledger is the computational work needed to run bitcoin

There are a lot of uses for crypto currency in general. But bitcoin isn’t very _good_ at any of them. There are better crypto systems out there. Which is why I don’t believe anyone “uses” bitcoin in good faith but rather pumps and dumps to make some cash.

I’d rather invest in Ethereum or monero or something but I can’t be bothered when I have invested in anything else yet

That is not entirely correct @ThisIsChris . BitCoin mining is artificialy (I don't mean that with any pejorative conotations) induced computational work that gets harder over time. Maintaining the ledger is computationaly very cheap (easy). In order to ensure that ledger has not been tampered with an industry standard SHA256 hash is used. Calculating the hash is also very cheap and designed to be super fast. Each hash is distributed with equal statistical probability throughout the 256bit space. Crypto currencies say this: ok, if you hash the ledger you will get a number between 1 and 1024 (numbers just for representation). Each number is equally likely. You hash computation will take 1 second. Well, we want to introduce 'difficulty' so add a random number to the ledger, cacl the hash again and make sure that hash is <256. You will now have to run the hash function between 1-4 times (1-4 seconds) so it takes longer. You have only 1 in four chance of getting it under 256. The first guy to calc it, gets the bitcoin reward. As soon as 2K blocks have been added to the ledger if it took less than 10 minutes, the difficulty goes up meaning the next hash needs to be under 128, double the difficulty. As you have more nodes, it goes faster but difficulty gets higher. The 'mining' part is artificial. It has nothing to do with the work required to maintain a ledger itself.

this of course presents a problem to the network. Anybody that can own 50%+ of the network can front run the hashes and own the entire network. So for example, guys like Goldman or NSA can get enough hashing power to front run everyone. Not say that is what they would do, but that is one of the flaws. The other flaw is that bitcoin algo depends on internet running it. A statue prohibiting bitcoin protocol at the backbone level would instantly render the entire bitcoin concept entirely moot and completely and utterly defunct. In one minute.