One of the most reliable tools of cryptocurrency. Investing toolbox is lending on the xCoin exchange. It’s the old-faithful, slow-but-steady, go-to champion of my passive investment strategies.
If you have a some amount of Bitcoin or some other cryptocurrency lying around, what can you do with it? Make more of it, of course!. Here is how it works. Instead of exchanging bitcoin for money, the borrower receives bitcoin as a loan from the lender and gives the equivalent amount of money to the lender as collateral. The lender receives the collateral plus the interest fee prior to sending bitcoin to the borrower.
First, you deposit bitcoin to your this exchanges wallet. You also specify the maximum amount you would like to invest. Borrowers make payments to your PayPal account. Bitcoin is automatically deducted from your exchange wallet. It’s that simple. Convert bitcoin to dollars and receive instant profit from each transaction with xCoins peer-to-peer secured lending platform. It is almost like selling bitcoin, only better!
you can expect low rates most of the time, punctuated by brief periods of high rates that can be exciting for a few days, averaging out to an APR of 10-20%, maybe a bit more if you’re lucky.
Here is some Advantages of lending bitcoin
- Strategy is mostly automated; very little manual work required
- Very low risk under normal circumstances
- Higher APR than keeping your money in a bank
so,how to actually lend!
The actual mechanics of it are quite straightforward. Let’s start by dissecting the controls on thexCoin lending page and then I’ll explain it’s method.
- First step- The process of secure lending is almost exactly the same as exchange. First, you deposit bitcoin to your xCoins wallet. You also specify the maximum amount you would like to invest. Borrowers make payments to your PayPal account. Bitcoin is automatically deducted from your xCoins wallet
- Deposit bitcoin to your xCoins wallet and specify the maximum amount you would like to lend. This amount may be divided between multiple borrowers.
- The program automatically matches you with one or more borrowers. Each borrower makes a payment to your PayPal account in dollars. The amount of each payment includes the loan amount plus your interest fee.
- After each payment is made by a borrower, the corresponding amount of bitcoin is deducted from your xCoins wallet and transferred to the borrower’s wallet.
Even though there are three steps shown , in reality, you only need to do Step 1: Deposit Bitcoin. Steps 2 and 3 are performed automatically and the borrowers. You do not need to look for borrowers, verify their creditworthiness, send them bitcoin, or do anything of that sort.And also, your funds are not “frozen” in your wallet. xCoins wallet works as a regular full-featured bitcoin wallet. You can withdraw your funds at any time.
Besides, you should never commit 100% of your capital to loans anyway. Always leave some in reserve to take advantage of good opportunities as they come along. Of the Bitcoin I keep on my wallet, 15% is for regular trading, 15% is collateral for margin trading, and the remaining 70% is for lending. If I was a better trader, I might adjust those ratios a bit more toward the trading side.