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gitcoinco / skunkworks

experimental laboratory
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debtors-prison rescue dapp #44

Open owocki opened 6 years ago

owocki commented 6 years ago

i think one of the most heartbreaking things out there is the debtors prison that exists for millions of lower class americans

https://en.wikipedia.org/wiki/Debtors%27_prison https://www.nytimes.com/2017/12/28/opinion/sessions-says-to-courts-go-ahead-jail-people-because-theyre-poor.html

side 1 of the market

it basically goes like this.. you have a medical emergency or need your car repaired -- you go into $10k or $20k of debt at an insane interest rate.. like 25%..

and you can.. never.. get... out..

side 2 of the market

then there's these crypto people... who have made tons of $$$ off of bitcoin and ethereum price rises. these people are doing things like

  1. HODLing for the long term
  2. paying off their student loans / mortgaes

idea

what if we connected these two sides of the market.. basically allowing crypto people to 'rescue' people from their debtors prison by

  1. just wiping the debt clean (for charity)
  2. making a loan at a reasonable interest rate.

basic functionality of the dapp

  1. side 1 of the market submits an application with pictures, their story, etc
  2. there is some sort of review functionality to do fact checks, prevent abuse.
  3. side 2 of the market can stake their crypto to help pay side 1's loans.
  4. the dapp distributes funds to side 1.
owocki commented 6 years ago

some good feedback from coloradoblockchain:

The problem here is crypto adds absolutely nothing. Fiat, Bitcoin, Ether...

it adds a ton of people who have become millionaires in the last 12 months and (1) have no easy means to pay it forward (2) would, depending upon their values, spend it on themselves otherwise.

owocki commented 6 years ago

( thinking out loud ) i wonder if theres some collab oppies with SALT lending (also in colorado) here..

kcbigring commented 6 years ago

interesting idea, a few questions/issues:

  1. what is a 'reasonable' interest rate
  2. i think things like gofundme already deal with the charitable aspect
  3. loaning crypto is compelling but if i loan bob 1 btc today and expect to get paid back 1 btc with reasonable interest in a year, the issue with the ever increasing 'value' of crypto is that the effective interest rate wrt the $ may actually be in the payday lending territory, 100%+. still in debtor prison.
mkosowsk commented 6 years ago

Interesting idea but I think the vetting of people receiving the funds could be potentially tricky... tooo loose and you get a lot of scammers and too tight you could ruffle a lot of feathers 🤔

Would definitely need to put a fair amount of thought into this aspect. Would there be some type of interviewing process for applicants?

owocki commented 6 years ago

this is interesting.. thanks rhys lindmark for the link https://twitter.com/Give_Directly

owocki commented 6 years ago

Interesting idea but I think the vetting of people receiving the funds could be potentially tricky... tooo loose and you get a lot of scammers and too tight you could ruffle a lot of feathers 🤔

@mkosowsk i think wed need to align philsophically about this. i dont know the answer yet :)

owocki commented 6 years ago

loaning crypto is compelling but if i loan bob 1 btc today and expect to get paid back 1 btc with reasonable interest in a year, the issue with the ever increasing 'value' of crypto is that the effective interest rate wrt the $ may actually be in the payday lending territory, 100%+. still in debtor prison.

interestingly... SALT lending has solved a lot of these problems when they launched.. they might be a good partner

mvpratt commented 6 years ago

Very interesting idea. One challenge is how to mitigate defaults. Interest rates on loans typically represent the likelihood of default. So if the project offers lower than market rates, there would need to be some reason why this is feasible.

Maybe a partnership with a non-profit that already works with low income families and is knowledgeable in this area would make sense? Providing emergency loans could be a nice way to prevent homelessness.

Say we can solve the problem of defaults and figure out a reasonable rate. I can imagine a scenario where benefactors stake crypto assets at SALT. Then the borrower gets the fiat equivalent and pays back the loan to SALT. Once the loan is paid off, the benefactor gets the crypto back, or can use it to stake for more loans. Benefactors get to HODL while still putting their crypto to work, borrowers get reasonable rates. Could be a nice win-win.

mvpratt commented 6 years ago

I also think the straight donation model is cool. This would be far simpler to implement. Donors could sent crypto-assets to a non-profit which liquidates to fiat. The full value of the crypto is then tax deductible i.e. no one pays capital gains tax.

owocki commented 6 years ago

I also think the straight donation model is cool. T

yes this is much simpler technically / product wise too

heyellieday commented 6 years ago

As someone who has once had lots of medical debt, I’ve been interested in the topic of how to alleviate others from this burden. I also have learned some facisnating things about how debt and debt collection works in the US. The biggest aspect many are unaware of is that when a debt collector is attempting to collect a debt of $10,000, it is very likely that debt was purchased for pennies on the dollar. By that logic, one could purchase debt at a highly discounted rate and simply forgive it. That’s what an existing non profit called RIP Medical Debt does already: https://www.ripmedicaldebt.org/

There’s a segment that John Oliver produced that’s linked on their site.

Perhaps we could partner with them to provide a new donor pool from newly rich crypto holders?

owocki commented 6 years ago

The biggest aspect many are unaware of is that when a debt collector is attempting to collect a debt of $10,000, it is very likely that debt was purchased for pennies on the dollar.

This is very interesting...

ialexander28 commented 6 years ago

@heyellieday @owocki Many people also don't know that you can haggle with debt collectors. The collectors always present it as if you have to pay the full amount since that is their business model. However, for debt and medical bills, you can often offer as low as 5 - 10% of the total and they will take it.

owocki commented 6 years ago

this is interesting @ialexander28 ... i wonder if theres a play here where instead of just gifting someone $x to pay off their loan, you can create a microtask on bounties.network to have someone negotiate the debt down.

mkosowsk commented 6 years ago

+1 to the idea to microtask a negotiation. i personally would love doing this! i used to be a trader and don't really want to go back to that full-time but would be happy to scratch that negotiation itch every now and again for a good cause :)

ialexander28 commented 6 years ago

@owocki and @mkosowsk I love this idea. I wasn't familiar with bounties.network beforehand and it sounds like that might be the best way to move that idea forward. I've played around with a similar idea in the past and the idea of helping people negotiate their debt is certainly something I'd like to do as well. I wonder, what would be the monetary play here if it's not a charity, and how do you engage the normative population that doesn't know very much about crypto or blockchain. Maybe an app connected to bounties.net or the Origin platform that makes it simple for people to designate a fiat percentage owed to the negotiator based on the desired outcome with the choice to accept either fiat or crypto....? I know Origin is working on this conversion/adoption idea internally.

owocki commented 6 years ago

thinking of bountying this for ETHDenver.com this weekend. anyone feel strongly for / against?

ialexander28 commented 6 years ago

I'm cool with it. Do you need anything from me?

Happy to help.

Best, Ian

On Wed, Feb 14, 2018 at 4:26 PM, Kevin Owocki notifications@github.com wrote:

thinking of bountying this for ETHDenver.com this weekend. anyone feel strongly for / against?

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub https://github.com/gitcoinco/skunkworks/issues/44#issuecomment-365779213, or mute the thread https://github.com/notifications/unsubscribe-auth/AbwW7QD0k9IH6VnQoi5wXZNnH2Tp-CQQks5tU2u7gaJpZM4RcXqo .

ialexander28 commented 6 years ago

Anyway I can be apart of this since I contributed to the idea thread?

Ian

On Wed, Feb 14, 2018 at 4:30 PM, Ian Alexander < buildingbusinessideas@gmail.com> wrote:

I'm cool with it. Do you need anything from me?

Happy to help.

Best, Ian

On Wed, Feb 14, 2018 at 4:26 PM, Kevin Owocki notifications@github.com wrote:

thinking of bountying this for ETHDenver.com this weekend. anyone feel strongly for / against?

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub https://github.com/gitcoinco/skunkworks/issues/44#issuecomment-365779213, or mute the thread https://github.com/notifications/unsubscribe-auth/AbwW7QD0k9IH6VnQoi5wXZNnH2Tp-CQQks5tU2u7gaJpZM4RcXqo .

owocki commented 6 years ago

we are certainly looking for leadership for this project... want to join the gitcoin.co/slack community and intro yourself? we can start a private channel and start sourcing project contributors

ialexander28 commented 6 years ago

Great to hear. I'll try to join and intro on the gitcoin slack later today.

Talk soon. Ian

On Feb 21, 2018 11:21 PM, "Kevin Owocki" notifications@github.com wrote:

we are certainly looking for leadership for this project... want to join the gitcoin.co/slack community and intro yourself? we can start a private channel and start sourcing project contributors

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub https://github.com/gitcoinco/skunkworks/issues/44#issuecomment-367579421, or mute the thread https://github.com/notifications/unsubscribe-auth/AbwW7aJec5-g4hPhrBqHKDiAGZi_SbcAks5tXQdbgaJpZM4RcXqo .

ialexander28 commented 6 years ago

Joined. Let me know if you have any ideas for the channel and invitees, and we should be able to get this rollin'

On Thu, Feb 22, 2018 at 1:35 PM, Ian Alexander < buildingbusinessideas@gmail.com> wrote:

Great to hear. I'll try to join and intro on the gitcoin slack later today.

Talk soon. Ian

On Feb 21, 2018 11:21 PM, "Kevin Owocki" notifications@github.com wrote:

we are certainly looking for leadership for this project... want to join the gitcoin.co/slack community and intro yourself? we can start a private channel and start sourcing project contributors

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub https://github.com/gitcoinco/skunkworks/issues/44#issuecomment-367579421, or mute the thread https://github.com/notifications/unsubscribe-auth/AbwW7aJec5-g4hPhrBqHKDiAGZi_SbcAks5tXQdbgaJpZM4RcXqo .

owocki commented 6 years ago

@ialexander28 send me a DM (i'm owocki) and we'll hook it up sometime this week

ialexander28 commented 6 years ago

Sorry for the delay -I was out of town at a conference for work. Just sent you a DM on gitcoin slack.

On Sun, Feb 25, 2018 at 10:13 PM, Kevin Owocki notifications@github.com wrote:

@ialexander28 https://github.com/ialexander28 send me a DM (i'm owocki) and we'll hook it up sometime this week

— You are receiving this because you were mentioned. Reply to this email directly, view it on GitHub https://github.com/gitcoinco/skunkworks/issues/44#issuecomment-368392187, or mute the thread https://github.com/notifications/unsubscribe-auth/AbwW7cToRNk4zfv2W4hTnJfKVdmbGmXUks5tYj1-gaJpZM4RcXqo .

owocki commented 6 years ago

great! added you to a slack channel which we can add otheres to.. well need to figure out who else is interested and has complimentary skillsets AND has some free time coming up so we can actually tee this off