Canada Gets Lucky for Receiving the First Bitcoin-backed Loan Service

Canada Gets Lucky for Receiving the First Bitcoin-backed Loan Service

Ledn Inc, found by Bitcoin bull Mauricio Di Bartolomeo has been lately struggling hard to bridge the gap in the market for the Canadian mass who require to borrow money but fail to carry out the transaction procedure through a conventional bank. For the Canadians, Bitcoin has stood the test of time and has always been there on their popular choice list like many other countries. In fact, 5% of the Canadian population has been accounted to be the owners of Bitcoin.

A Bitcoin payment processor, referred to as Bylls, which is said to be operated by Satoshi Portal had already issued the first set of loans. Satoshi Portal’s CEO, Francis Pouliot explicates that the portal was not capable of leveraging capital for reinvestment similar to the companies who hoard fiat, Satoshi Portal being run by self-funded blockchain startup backed up by the profits earned by Bitcoin. Implementing its Bitcoin funds as collateral denotes that the company is released from the responsibility of selling its coin from new investment savings. Few of the price volatility can also be sought to be forgiven if it uses Bitcoin to receive fiat credit.

However, some risks on opting for this loan has also been listed. Ledn is strongly dependant on cold wallets to hoard the funds which can easily be a grazing ground for the smart hackers in the absence of a third party cryptocurrency custody service functioning in Canada. On making an obvious mistake like sending the loan to the wrong recipient, they are liable to lose it without a hope to restore it back.

Adding to the list of risks, the market volatility or the margin calls are also at a constant threat, with assets dynamically fluctuating within a short notice, which eventually poses for the hardships of the two teams measured by the number of collateral needs to be delivered. A dramatic collapse of the Bitcoin market could thus mean the end of the whole plan altogether.

A U.S, based firm, Unchained Capital is involved in the same kind of cryptocurrency-backed loan offerings, but their target clients are only the market investors. The new loan offering decision may be not a flawless one, it definitely urges both the owners and the investors to look at it as a whole new advancement that must be encouraged. It finally makes the longing of cryptocurrency as the tangible asset come true. It brings upon a possibility of lots of potentiality for the blockchain startups who can now rely on loans.

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