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. Last time we introduced our users to P2P lending, more specifically on Bibond. This time, we’re going to talk about another P2P lending 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”.
BTCJam P2P Lending
BTCJam is another P2P lending website that allows lenders and borrowers to bypass banks and have access to savings and loans on a peer-to-peer system. BTCjam was founded in late 2012 and by the end of 2014, BTCjam had facilitated bitcoin loans in excess of $10 million dollars in value with more than 100,000 users in over 200 countries. BTCjam also has an “Autoinvest” feature, which allows you to keep a diversified portfolio without having to monitor the loan offers. This feature will take your designated parameters into account and find suitable investment opportunities.
Today, we’re going to teach how to invest in loans using the BTCjam website. With this fourth part, our tutorial comes to an end. Hopefully, it will have helped you steer away from scams and focus on worthwhile opportunities only.
BTCJam P2P Lending
Step 1: Click here to go to BTCjam
Step 2: Click “Invest” to create an account
Step 3: You’ll be taken to a page where you can learn more about the investment opportunity presented by BTCjam. When done reading, click “Start Investing”
Step 4: You can signup with facebook or create a new account. We’re going to create a new account. Enter your personal details, agree with the terms&conditions and click “Sign Up”
Step 5: BTCjam will send you a confirmation email. Click the link inside to confirm your account
You’ll be logged into your account and your email will be verified
Funding your account
Now that you’re logged in, it’s time to fund your account with bitcoin.
Step 1: Click “Add funds”
Step 2: You’ll be shown a BTC address. Send the bitcoin you want to invest to it. Remember, this ddress is valid for 24 hours, so make sure to check if it’ still valid before sending any funds
Step 3: Wait for the transaction to be confirmed (it should take around 30 minutes) and then click “Invest”
Step 1: You’ll be taken to a list of current investment opportunities. Much like the previous website we analysed, Bitbond, you can filter the loans. Choose the time you want your investment to last
Step 2: Choose your risk factor. BTCjam ranks investment opportunities from A to D, A being the less risky and vice-versa
Step 3: You can also choose which currency you want to invest in. Despite being a bitcoin-based website, BTCjam allows you to peg your investment to multiple national currencies. This means that despite the price movements of bitcoin, you’ll receive the fiat value of your investment + interest (according to the Coindesk index price).
Step 4: Once you see an investment opportunity that pleases you, click on it to see more details
Step 5: Now that you’re on the loan’s page, there are multiple factors to check. The most important of which is to check how complete and verified the borrower’s profile is. The more fields verified, the safer the investment is, but the most important factors would be a verified identity and income
Step 5: It is equally important to check the loan’s description. Does the borrower specify how he plans to recover the loan? Is his business model good? If he has a solid and profitable business or idea lined up, then there is a higher chance of him repaying the loan. In this case, the borrower will invest in cryptocurrency mining, which is usually profitable depending on the country
Step 6: Don’t forget to check how well-funded the loan already is and the investors that have already participated. Do they have a history of positive income? If so, then they probably know what they’re doing.
Step 7: If you decide that you want to invest, then scroll back up and click “Invest”. Don’t forget to check the APY, which can be found above the “Invest” button. In this case, it’s 8.26%
Step 8: Enter the amount of Bitcoin you want to invest (We’ll invest 0.02) and click “Invest”
That’s it! You have just invested in a loan
It doesn’t end here, however! If you like BTCjam and you want to continue to invest regularly, you can also check out the “Autoinvest” feature, which allows you to keep a diversified portfolio without having to monitor the loan offers. This feature will take your designated parameters into account and find suitable investment opportunities.
Step 1: To start the auto investment plan, click “Autoinvest”
Step 2: Then click “Create a Plan”
Step 3: Lastly, choose a type of plan and how much BTC/USD you want to invest, then click “Activate Plan”
This will activate an auto investment plan that can be turned off at any time. This concludes the “How to earn Interest on your Bitcoin” tutorial series. Hopefully, it will have helped you steer away from scams and focus on worthwhile opportunities only.