How to earn interest on your bitcoins
Critics of bitcoin used to argue that bitcoin won’t survive as a currency as it doesn’t pay interest and is, therefore, inferior to fiat currency. While this was actually the case when bitcoin first launched, it is no longer the case. Listed below are ways you can earn interest on your bitcoins.
Magnr – This bitcoin savings account pays an initial 2.18% AER until 2016, followed by a variable interest rate tied to the profits generated by leveraged margin trading at BTC.SX. With a 100% reserve guarantee which is independently verifiable via the blockchain and multi-sig security on all accounts, I would say that the risks associated with these savings account are not significantly higher than keeping coins in your own wallet. It is also quick and easy to set up and requires no maintenance – just like a regular savings account you just make a deposit and leave it there to grow.
Poloniex – This is a popular altcoin exchange which offers leveraged trading and has a peer-to-peer market for users who want to provide liquidity to margin traders and earn daily interest as a result. You can set your own interest rate and loan duration, and because these are short-term loans with daily interest you get excellent compounding of interest over the longer term. To get the best rate you need to play an active role in managing your account, but if you don’t want to be logged in all day monitoring rates and tweaking your offers you can use their API to connect to a bot (check out our article on Using Poloniex Lending Bot for more info). One of the best features of Poloniex lending is that you can also earn interest on a wide range of altcoins.
BTCJam - This is a peer-to-peer lending service that allows a user to invest their bitcoins and earn a high rate of return. The firm has developed a proprietary Global Credit Score algorithm that takes into account hundreds of data points to assess the risk of each borrower and loan. So far, the overall repayment rate is around 90%. Look for loans that are following the recommended interest rate and match loans with your own risk appetite. BTCJam allows you to interact with both investors and borrowers on listings. Also as a plus, BTCJam allows you to invest any amount in any loan. BTCJam allows borrowers to select their interest rate and also provides investors with a warning if they deem the borrower more risky.
Bitbond - Bitbond is a profitable bitcoin lending platform which provides a 13% return on your bitcoin investments. The other plus, especially for Africans, is that you have the ability to diversify your portfolio globally and the platform also assists investors to grow businesses around the world. The lending network is the same as a bitcoin wallet in that after a few days, you get extra money as interest using the auto-invest algorithm. The feature allows you to carefully filter out those borrowers you want to support and those you do not, by determining location, credit risk, loan term and loan denomination. If you like to get into the bitcoin lending process on a more personal level, you get to choose which types of businesses and entrepreneurs you’d like to invest in, or what region you’d like to strengthen by supporting local small business owners. At interest rates of around 20% and an expected return rate of 13%, bitcoin lending will allow you to earn high profits at practically no effort at all.
BTCPOP - This is a peer to peer lending site with an edge in that it offers a variety of securities to invest in. if you’re wishing to make money and have a couple of bitcoins at hand, you are able to invest in stocks, cloud mining, investment pools, savings accounts, amongst others. Also, the sites broad range of bitcoin securities allows users to buy and trade without verification of identity. This adheres it to some people’s understanding of the bitcoin’s “Anonymity”. The other plus of BTCPOP is that the range of securities allows users to diversify investments on one site and mitigate risk according to their own investment goals. Africans as well can benefit dearly from using BTCPOP due to the vast investment portfolio which, apart from broadening pockets in the long run, will also broaden investment knowledge. The investment pools of BTCPOP are a way to deposit bitcoin and get daily (mostly) returns. These returns may be small, but have been proven to make 1% on one deposit in a couple months, with no work.
Depositing bitcoin on BSave
Bsave is a Bitcoin savings account run by Coinbase, one of the world’s biggest and most trusted exchange and wallet providers. The rate is variable, currently around 2%. The funds are used to provide liquidity on the company’s own exchange. BSave explains they are a solution for both long term and short term savers as well. The website claims the service is secured by encrypted SSL (https) and multi-signature technology to protect from data leaks and malicious attacks. They also offer two-factor authentication connected with Coinbase’s API and passwords are never saved within the BSave server. The team details that they have great experience with the financial market sector and have combined skills in capital markets and financial structures.