Credits and microloans in bitcoins. Is it possible to earn on this?
7 years ago, the microcredit market was firmly occupied by banks and large companies. But the world, fortunately, is changing. Services like Ebay, Uber, in which an ordinary person sells a product or provides a service to another ordinary person, grow and thrive. A good continuation of this trend is distributed lending in bitcoins.
When you have a bean seed, you can make soup from it - or you can try to grow a beanstalk
This is probably one of the most successful examples of cryptocurrency usage. Coin make it possible to circumvent the complex and costly mechanism for licensing the credit business, implement an international lending system without attracting traditional financial institutions and operate with microloans, carrying out quick transfers of funds worldwide. Where else can you get a loan from an American farmer or a Chinese businessman without any problems? Or use your honestly earned $ 1000, distributing them in the form of short-term loans to 10-50 people from different countries, having received, at the same time, a good percentage?
Specialized credit platforms bring borrowers to lenders. Both are ordinary people who want their money to work, need a loan for business development or consumer credit. The borrower creates an application for funds, selects the loan amount, interest on it and the timing of the return, as well as the payment scheme.
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Other users who agree with the terms of the borrower, respond to the application, offering to issue a certain amount in BTC (as a rule, several times less than the total amount needed by the borrower). Any number of creditors can participate in a single transaction. The amount each lender chooses and it can be arbitrarily small. This mechanism allows you to invest immediately in a greater number of applications, minimizing the risks of losing money.
Reducing the risks of default is also based on the internal credit ratings of users. The higher the rating, the lower the percentage when creating a new application and the more willing to lend the user to bitcoins. Rating is the level of trust to the user. The site calculates it for three factors:
For lenders, there is also a rating system. At many sites, you need to confirm your identity and the legality of the funds with which you want to operate. When creating the application, the borrower may reject the funds of the lender, who does not cause his trust (although, to be honest, the situation is not frequent).
Over the past few years, there have been a lot of cryptocurrency lending sites using the peer-2-peer scheme. The principle of their work is the same, the differences are in details: verification methods, percentages, monetization schemes, target audience. Most Popular:
In addition to specialized sites, lenders and borrowers use forums. For example, on the BitcoinTalk forum there is a separate section dedicated to such ads. Here the security of the user on the forum and the reviews of previous lenders are a guarantee of security. The risks of non-return, respectively, are higher, but interest is also greater. In addition, the borrower does not need to pay a commission service.
Which site is better to choose? We advise you to start with the market leader BTCJam , in order to understand the scheme of operation of cryptocurrency loans and experiment. So the risks of losing money and run into fraudsters will be much lower. In addition, there are many useful articles and reviews on BTCJam, not only in English, but also in Russian .
Microcredit - a very attractive area for investment. Starting capital can be arbitrarily small and, as a result, you do not risk large sums. Especially if you distribute funds among a large number of borrowers, minimizing the risks of default. The verification process takes only a few days; no special licenses are required for crediting.
Those who enter this topic “from the street” will find our review of the most simple asset monetization schemes using cryptocurrency microloans systems useful:
We give loans to borrowers, we get interest according to a predetermined scheme. If you initially had a capital in the fiat currency, it is better to respond to requests linked to the exchange rate of this currency, otherwise if the BTC rate fluctuates, you may lose some of the funds. True, such transactions are less profitable (more applications are quoted without reference to the course), but you remove some of the risks.
The likelihood of no return of funds is significantly reduced if you carefully check the reputation of each borrower. To do this, it is better to use not only the tools of the site, but also additional services. The market offers a large number of third-party resources, such as bitlendingbot.com .
And, the main rule: do not put all the eggs in one basket. Crush investment capital between many and many borrowers, greatly increasing the likelihood of returning funds and receiving interest on your transactions.
We take a loan with interest n, give a loan at interest k, where k> (n +% of the site). The difference we take away. Tangible profit can be obtained only on significant volumes and a large number of transactions. The scheme does not require start-up capital, but the risks are quite unpleasant: in the process of implementing this scheme, you may not get BTC invested in one or several borrowers.
The advantage of cryptocurrency is the ability to engage in arbitrage at several sites at once, because bitcoins are easy to translate within the network with minimal losses in transfer. In manual mode, such a scheme will take a lot of time, but if you get a bot that would automatically select and process applications - time costs will be significantly reduced.
Do you know how to borrow 10 bitcoins, and in 3-6 months turn them into 20? Then we have nothing to tell you about the turnover of capital. If not, we advise you to start with the study of trading strategies. Traders - regular customers in credit cryptocurrency networks.
In general, the best interest rates on applications and most of all responses to applications on sites are received by borrowers who raise funds for projects or activities in BTC, when funds flow without exchange of a crypt in fiat money. In addition to trading, this, for example, mining (upgrade and increase farm capacity).
Cases of defaults in distributed lending networks are not as rare as we would like. It is very difficult to secure creditors at the legal level due to the dubious legal status of cryptocurrency. However, if you are a US citizen, then you have the hope of bringing unreliable borrowers to justice. There is at least one precedent in American practice, when the court ordered the borrower to repay the debt in Bitcoin.
For lenders who do not have a United States passport, there is a cryptocurrency insurance insurance mechanism in Loanbase . The site cooperates with collection companies and, in the event of problems, sends the malicious ones to non-payers.
But, let's be honest, the most reliable mechanism is to protect yourself, carefully check the credited users and lay down the risks of non-return in a credit strategy.
When you have a bean seed, you can make soup from it - or you can try to grow a beanstalk
This is probably one of the most successful examples of cryptocurrency usage. Coin make it possible to circumvent the complex and costly mechanism for licensing the credit business, implement an international lending system without attracting traditional financial institutions and operate with microloans, carrying out quick transfers of funds worldwide. Where else can you get a loan from an American farmer or a Chinese businessman without any problems? Or use your honestly earned $ 1000, distributing them in the form of short-term loans to 10-50 people from different countries, having received, at the same time, a good percentage?
How does distributed lending in cryptocurrency
Specialized credit platforms bring borrowers to lenders. Both are ordinary people who want their money to work, need a loan for business development or consumer credit. The borrower creates an application for funds, selects the loan amount, interest on it and the timing of the return, as well as the payment scheme.
')
Other users who agree with the terms of the borrower, respond to the application, offering to issue a certain amount in BTC (as a rule, several times less than the total amount needed by the borrower). Any number of creditors can participate in a single transaction. The amount each lender chooses and it can be arbitrarily small. This mechanism allows you to invest immediately in a greater number of applications, minimizing the risks of losing money.
Reducing the risks of default is also based on the internal credit ratings of users. The higher the rating, the lower the percentage when creating a new application and the more willing to lend the user to bitcoins. Rating is the level of trust to the user. The site calculates it for three factors:
- Verification: confirmation of the user's identity, residential address, his income;
- History: previous successfully closed loan applications;
- Reviews: positive recommendations of other users of the site about the borrower;
For lenders, there is also a rating system. At many sites, you need to confirm your identity and the legality of the funds with which you want to operate. When creating the application, the borrower may reject the funds of the lender, who does not cause his trust (although, to be honest, the situation is not frequent).
Overview of distributed lending sites
Over the past few years, there have been a lot of cryptocurrency lending sites using the peer-2-peer scheme. The principle of their work is the same, the differences are in details: verification methods, percentages, monetization schemes, target audience. Most Popular:
- btcjam.com is the market leader, the total amount of loans issued during the life of the site is approaching $ 20M. Borrowers can take out a loan for business, consumer needs, medical purposes, etc. Business loans prevail.
- www.bitbond.com - core business - loans for small businesses, loans to ebay sellers and online projects.
- btcpop.co - positioning themselves as a full-fledged cryptocurrency bank, offering users a full range of banking services, including opening a savings account and lending.
- loanbase.com is an American project of 2015, despite the relative youth, the project has gathered a large user base and is approaching the total amount of loans issued at $ 10M.
In addition to specialized sites, lenders and borrowers use forums. For example, on the BitcoinTalk forum there is a separate section dedicated to such ads. Here the security of the user on the forum and the reviews of previous lenders are a guarantee of security. The risks of non-return, respectively, are higher, but interest is also greater. In addition, the borrower does not need to pay a commission service.
Which site is better to choose? We advise you to start with the market leader BTCJam , in order to understand the scheme of operation of cryptocurrency loans and experiment. So the risks of losing money and run into fraudsters will be much lower. In addition, there are many useful articles and reviews on BTCJam, not only in English, but also in Russian .
How to make money on loans in cryptocurrency
Microcredit - a very attractive area for investment. Starting capital can be arbitrarily small and, as a result, you do not risk large sums. Especially if you distribute funds among a large number of borrowers, minimizing the risks of default. The verification process takes only a few days; no special licenses are required for crediting.
Those who enter this topic “from the street” will find our review of the most simple asset monetization schemes using cryptocurrency microloans systems useful:
The simplest scheme
We give loans to borrowers, we get interest according to a predetermined scheme. If you initially had a capital in the fiat currency, it is better to respond to requests linked to the exchange rate of this currency, otherwise if the BTC rate fluctuates, you may lose some of the funds. True, such transactions are less profitable (more applications are quoted without reference to the course), but you remove some of the risks.
The likelihood of no return of funds is significantly reduced if you carefully check the reputation of each borrower. To do this, it is better to use not only the tools of the site, but also additional services. The market offers a large number of third-party resources, such as bitlendingbot.com .
And, the main rule: do not put all the eggs in one basket. Crush investment capital between many and many borrowers, greatly increasing the likelihood of returning funds and receiving interest on your transactions.
Arbitration scheme
We take a loan with interest n, give a loan at interest k, where k> (n +% of the site). The difference we take away. Tangible profit can be obtained only on significant volumes and a large number of transactions. The scheme does not require start-up capital, but the risks are quite unpleasant: in the process of implementing this scheme, you may not get BTC invested in one or several borrowers.
The advantage of cryptocurrency is the ability to engage in arbitrage at several sites at once, because bitcoins are easy to translate within the network with minimal losses in transfer. In manual mode, such a scheme will take a lot of time, but if you get a bot that would automatically select and process applications - time costs will be significantly reduced.
Capital turnover
Do you know how to borrow 10 bitcoins, and in 3-6 months turn them into 20? Then we have nothing to tell you about the turnover of capital. If not, we advise you to start with the study of trading strategies. Traders - regular customers in credit cryptocurrency networks.
In general, the best interest rates on applications and most of all responses to applications on sites are received by borrowers who raise funds for projects or activities in BTC, when funds flow without exchange of a crypt in fiat money. In addition to trading, this, for example, mining (upgrade and increase farm capacity).
Legal information and risks of non-repayment of borrowed funds
Cases of defaults in distributed lending networks are not as rare as we would like. It is very difficult to secure creditors at the legal level due to the dubious legal status of cryptocurrency. However, if you are a US citizen, then you have the hope of bringing unreliable borrowers to justice. There is at least one precedent in American practice, when the court ordered the borrower to repay the debt in Bitcoin.
For lenders who do not have a United States passport, there is a cryptocurrency insurance insurance mechanism in Loanbase . The site cooperates with collection companies and, in the event of problems, sends the malicious ones to non-payers.
But, let's be honest, the most reliable mechanism is to protect yourself, carefully check the credited users and lay down the risks of non-return in a credit strategy.
Source: https://habr.com/ru/post/392767/
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