Bitcoin is a bit like the wild west of finance. If you want to be the one walking away towards the setting sun when the dust settles, you have to be extra careful as Bitcoin scams and ponzi schemes are everywhere. Unfortunately, these scams often work and many “investors” are left at the bottom of the pyramid holding an empty wallet where their bitcoins used to be. We want to make sure that this does not happen to you, and as so we are going to show you some examples on how to get interest on your Bitcoin without falling victim to these elaborate schemes that seek to rob you of your beloved coins.
Before we start, a few guidelines would be to stay away from any model that offers ridiculous interest rates like 1% per day or 10% per month. The same can be said for any model that is not transparent on how they get this interest or that simply state that profits comes from trading. Finally, do your research. A simple google search can make the difference. There is also a very good thread on Bitcointalk listing some known scams.
This is a four part guide on how to earn interest on your Bitcoin from reliable sources. The first part was on how to lend cryptocurrencies using Magnr. This time we are going to talk about P2P lending, more specifically on Bibond. On the next and final part we will talk about another P2P website, BTCJam.
Be aware that these websites are third party services and that you will be entrusting your funds to them. Although these are very reputable sources, there is always the possibility that your funds will be lost in the event of an hack, inside theft, etc.. So if you want to take no chances, just keep your Bitcoin in a private wallet, and keep your private keys safe.
If you do decide to invest, however, it may be a good idea to spread your coins around the various places we discuss. Like they say “don’t put all your eggs in one basket”.
Bibond P2P Lending
Bibond is a peer-to-peer lending website that allows you to lend both Bitcoin and national currencies for an interest. The major difference between the two former websites (Poloniex and Magnr) and Bibond is that with Bibond you’ll be lending your funds directly to other users. There is no failsafe mechanism for stopping users from taking your money and leaving. Forever.
However, this isn’t the norm as users are required to reveal their personal information and to back it up with the ownership of social media accounts, ebay, and so on. The borrowers are ranked from A to F according to risk. The lower the risk, the lower the interest you’ll receive and vice-versa.
In the case of an unpaid loan, Bibond will provide you with all the necessary information to take legal action agains the borrower or Bibond will sell the claim for the loan to a debt collection agency. The latter is usually better for lenders but it requires the amount to be above a certain threshold which varies according to the location of the borrower (usually 1.0 BTC or more in the developed world and 0.5 BTC or more in emerging markets).
You can read the Bitbond guide for lenders to know everything you need to know to make the best decisions with loans.
Let’s get started with creating an account.
Create an account
Step 1: Click here to go to Bitbond
Step 2: Select “I want to invest or earn as an affiliate”
Step 3: Enter your personal details (1), agree to the Terms and Conditions (2) and click “Join Now” (3)
Step 4: You will be sent an email with a confirmation link. Click it to activate your account
Step 5: Now login with your email and password
Verify your Identity
Step 1: Once logged in, click “personalize your profile here”
Step 2: Click “Personal Details”
Step 3: Fill in your personal information and click “Save changes”
Step 4: Now click “Identity Verification”
Step 5: Read the instructions provided then click “Start Verification” which will start a video session with a identity.TM agent
Once the verification process is complete, it’s time to move to the interesting part, investing!
Invest in a Loan
Step 1: The first thing, you’ll need to do, is to deposit the bitcoin you want to invest in your account. To do so, click the bitcoin symbol on the top right corner
Step 2: Deposit Bitcoin into the address shown. (You can also deposit funds from your bank account if needed, but in this guide we’ll use bitcoin only)
Your deposit will appear below when confirming
Step 3: Once your account is funded click on “Invest in Loans”
Step 4: Now, you’ll want to filter your loans, starting with the base currency. Choosing USD means that the borrower is required to pay you back base on the USD value of your Bitcoin investment. This means that if you invest $20 worth of BTC and bitcoin increases or drops in value, you’ll still get back $20 worth of BTC + interest.
Step 5: Next, select the Rating of the borrower. We’ll leave out E’s and F’s
Step 6: Lastly, select the duration of your investment. The profit percentage that will later be shown (APY) is for one year.
Step 7: Now browse the loan requests available and select one that interest you to learn more about it
Step 8: You’ll now want to check everything about this offer. We mean everything. Start by checking the borrower’s profile for past loans and activity by clicking the user’s avatar or username
Step 8: Remember to read the loan description (1) carefully and to check the connected accounts for authenticity (2)
Step 9: Next, you’ll want to check the Investors that have already funded the project on the bottom of the page. If you have a lot of experienced investors with repaid loans, it probably means that they know what you’re doing. Scroll to the bottom and click “Load More” to see all the investors
Step 10: When you’re ready to make the investment, simply click “INVEST” on the right side of the screen. Remember: If your base currency is USD, you may end up with more or less Bitcoin than what you lend + interest, according to the market price of bitcoin. Make sure you check the base currency.
Step 11: Now enter the BTC or USD vale you want to invest and click “Confirm”
That’s it! Now you just sit back and wait for the loan to be returned. Hopefully, everything will go without a scratch! Remember to read the Bitbond guide for lenders to know everything you need to know on how to make the best decisions with loans and borrowers. Good luck!