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The world is developing, and modern technologies penetrate into all areas of our life. Until recently, a loan meant receiving a loan of a material amount, but now almost anyone can take a loan in bitcoins and similar resources. We will analyze in detail how to obtain a loan via the Internet, we will discuss the pitfalls of the procedure, we will reveal some tricks of electronic finance.
Bitcoin concept. Bitcoin is a payment system that can act as an intermediary between a transaction of two parties, an electronic wallet and a credit system, in one person.
Content
Where can I get bitcoin - a loan and how to do it
Bitcoin on credit. List of companies involved in the purchase and sale of cryptocurrencies.
If you decide to take out Bitcoin on credit, you can determine the list of companies worthy of attention yourself. We bring to your attention simply the most famous companies where you can get a loan in cryptocurrency.
On the payment system itself, loans are not issued, but only transactions are carried out. But specifically for lending, several specialized services, the so-called lending platforms, were created.
Usurers are people who are ready to make investments in bitcoins, borrowers, as a rule, can also borrow bitcoin for the development of their business. Loans can be issued either by one lender or by a group of people, lending the amount to the borrower in installments.
To minimize risks, the sites have lists of the best lenders and borrowers, reflecting the reputation of users, and, accordingly, their level of reliability.
We will analyze several common lending platforms where you can get a bitcoin loan, namely:
It is much easier for Americans and Europeans to get a loan in digital coins on specialized international services. Loan applications from citizens are not always approved, and yet there are chances if you try your luck in several organizations.
BTCpop.co is a platform that makes it possible to take loans in bitcoins, claims to be a cryptocurrency bank.
BTCpop is a P2P lending platform where private investors issue loans (loans) to individuals or legal entities. The platform establishes the "rules of the game" for users, conducts verification and helps borrowers find an investor.
BitBond.com is a marketplace for raising funds in cryptocurrency for the needs of small businesses. BitBond is quite active: more than one hundred thousand users and the total amount of loans is about $ 4 million.
Bitbond is a German P2P lending platform. The service appeared in 2013, three years later the company received a license from the German financial regulator (BaFin).
StemFund.com is a system that allows you to register and present your project to attract investment in cryptocurrency.
StemFund is a platform that allows investors to lend to individuals and legal entities for up to 1 year. Borrowers are selected in an auction format, where investors offer different lending rates. All transactions are carried out in bitcoins.
The foreign platform Nebeus and the service Cryptobroker.pro issue loans secured by bitcoins. The CoinLoan service works on the same principle. The borrower deposits cryptocurrency funds into the account, then creates an application for a loan, the amount must exceed 70% of the current market value of digital coins. After the loan is approved, it withdraws fiat funds, and after the debt is repaid, it withdraws its cryptoasset in full.
The BlockFi service offers users loans from $ 10,000 secured by an amount in Bitcoin, Ethereum or Litecoin (from 25% to 50% of the loan amount). The larger the cryptocurrency collateral, the more favorable the conditions for borrowers and the lower the interest rate.
Basically, all services require the same documents from borrowers: passport, proof of income and residence. For example, the Bitbond service requires a scan or a photo of the account that the user receives by mail - as proof of residence. To obtain a loan on BTCpop, instead of a passport, a driver's license is suitable, but an additional photo is required; To increase your chances of getting a loan, you can download a video message. Also, services often request links to user accounts on social networks. Each platform has a section that lists a complete list of documents required for loan approval.
Cash loans secured by crypto are issued by many international services. Applications from citizens are not always approved, but if you apply to several organizations at once, there are chances of getting it.
Loanbase
Loanbase is a service that imposes rather stringent requirements on investors and borrowers: in order to apply for a loan, you will have to provide scans of various documents and fill out a large questionnaire.
Loanbase is an English-language platform where you can borrow bitcoin. To do this, you need to register on the site, indicate your personal data and contact phone number. The duration of the loan and the interest rate depends on the conditions provided by the lender.
It is an resource that issues a loan, but thanks to a user-friendly interface and a translator, you can quickly understand the work of the service. To obtain a loan and other manipulations on the site, you must register in the system. In addition, when registering, it is required to indicate personal information, data on the real place of residence, e-mail, telephone and provide scanned versions of supporting documents.
The interest rate on the loan will be from 6 to 10%. The terms, percentage and conditions depend on how reliable the participant in the transaction is, what reputation he has in the system.
Bitlendingclub
Bitlendingclub is one of the most popular platforms. A loan in cryptocurrency is issued by bitcoin holders directly, without the participation of intermediaries. To get a loan, you need to open a wallet in the Bitcoin system and register. In addition, you will need to attach scanned copies of your documents (but you should not worry about the safety of data, since the system has its own protection system. On this site, you can get a loan in bitcoins in two ways:
As a result, to get started and get a loan for a bitcoin wallet, you need to go through a simple registration. Personal data is entered, a new account is confirmed via e-mail and a phone is linked, if desired. And you also need to present a scan of your documents in order to get all the service features.
Compared to others, this site owes its popularity to its own system protection. Therefore, you will have to fully register the basic data in order to obtain a loan. In addition, due to the English-language interface, the verification process can be difficult.
BTCJam
BTCJam is one of the platforms working as well. The higher the level of your reputation that you have in the system, the better the lending conditions. To enter the rating, you must also fill out the registration form and indicate your monthly income and place of residence. You can increase your rating by adding confidential information about yourself - add bank card numbers, mobile phone numbers, e-mail, links to pages in social networks.
The youngest site on our list for issuing a loan. It is considered the most advanced and understandable among other competitors. In addition, a user-friendly interface, hints and the ability to choose a native language are the main advantages of the service.
On this site, reputation decides everything. To get the minimum confidence rating, you need to provide the system with the following data:
However, in order to increase the initial rating, it is also recommended to perform such actions as:
A loan in bitcoins - how to make money on it
If you want to make money on cryptocurrency, with the help of loans, then you need to go to the opposite side of the process, that is, become a lender. To open your own business on the cryptocurrency market, you do not need to draw up additional documents and pay tax. For this it is enough:
How to get a loan
There are two ways to obtain a loan on the site. First, it is necessary to submit an appropriate application and wait for one of the creditors to respond to it. As a rule, this happens within one to two days. The second way is to contact the right lender directly through private messages.
For those new to the system, the first option is preferable, while the second is reasonable for more experienced borrowers. The fact is that, most likely, not having a sufficient period of stay on the site and reputation, it will be difficult to find a lender who is ready to take risks for a small amount.
The guarantor for the lender, in this case, is the borrower's personal information. If the user who took the loan did not return it on time, then his confidential information is opened for the lender. He can use it at his own discretion.
The borrower is given 10–20 days from the border of the term, warnings are sent from the system and the lender. As a result, if the debt is not repaid, then having received personal data, the creditor has every right to go to court and sue for a much larger amount.
Let's explain in detail the essence of each item:
System reliability
Whether it is worth investing your finances in e-currency is a private matter for everyone. But it cannot be denied that business is gaining momentum on the Internet more and more and there are fewer and fewer of those among entrepreneurs who do not use electronic currency.
A loan in bitcoins, unlike a loan from a bank, still seems to many people to be a real absurdity, because the volatility of the main digital coin is too high. But still there is a demand for such a service, and it is constantly growing.
In early 2018, large financial conglomerates began to prohibit the use of credit cards to buy cryptocurrencies. Payments were rejected by Bank of America and JPMorgan Chase, and then by Canada's Toronto-Dominion Bank. Clients were warned about the possible fall in the value of most coins, which could lead to serious financial losses.
Despite the market collapse, services that specialize only in issuing cryptocurrency loans continued to operate in the digital industry. The popularity of lending in digital coins has grown for several reasons:
Due to the lower interest rates
An increase in the number of traders and investors who find it convenient to receive funds immediately in cryptocurrency.
A simplified system of requirements for borrowers - those who were not approved for loans in banks could easily receive digital coins.
Another type of lending has also become popular. Services issue loans in dollars, euros or rubles secured by bitcoins. This is especially convenient at times when the market is in a protracted decline, and it is unprofitable to withdraw cryptocurrency purchased earlier at higher prices.
Advantages and Disadvantages of Cryptocurrency Lending
The risk is quite high both for borrowers due to the high volatility of digital coins and the lack of regulation in this area, and for investors who may face scammers. On bitcoin lending platforms, you can go through verification using fake documents, there is information about this on specialized forums.
Many services form the rating of borrowers, but sometimes fraudsters, having paid off several small loans in order to raise their status in this rating, take out a loan and disappear with the money. The only judicial precedent, when the court ordered the borrower to repay the debt in cryptocurrency, was recorded in America.
To take a loan in the electronic system correctly, you need to know about all the advantages and disadvantages of bitcoin.
The advantages of bitcoin include
Like any payment system, bitcoin also has its drawbacks
Namely:
The advantages of crypto loans are the following features:
Among the disadvantages are the following:
Risks of lending with cryptocurrencies
For borrowers, the main danger is the high volatility of cryptocurrencies and the lack of regulation. Investors can face fraudulent borrowers who are verified on Bitcoin lending platforms using fake documents. Some even pay off a few small loans to raise their rating, get a bigger loan and disappear with the money.
There is no complete certainty that the rights under loan agreements in cryptocurrency will be protected. In particular, the question arises, how to determine the moment of transfer of values so that it is clear to the court? What documents must be provided and how and at what point in time to determine the value of the cryptocurrency?
Among the advantages of crypto loans are quick registration without contacting a credit institution and the percentage is lower than that of banks. Also, the advantages of such a financial service include the likelihood of an increase in cryptocurrency funds in capital turnover and international transfers with low commissions. If digital money receives transparent and understandable regulation, it is quite possible that it will be difficult to surprise anyone with a loan in bitcoins, and such a service will appear in banks.
With the development of the cryptocurrency market, a service such as a loan in cryptocurrency has appeared. The crypto loan market is just beginning to gain popularity. Many who would like to get a loan in bitcoins or other digital currency are stopped by the lack of clarity of the procedure, its advantages and disadvantages, the reliability of such a phenomenon as cryptocurrency. countries, the most popular today is still bitcoin. As an example, we will take this type of cryptocurrency - as the most popular.
Features of loans in cryptocurrency
Perhaps the main feature of cryptocurrency is that it does not have a special regulatory framework and regulatory bodies that determine the mass of monetary units and their exchange rate. Anyone who has mining capabilities is engaged in the production of currency. The cost of one bitcoin or another unit of digital money (not to be confused with traditional Internet banking) consists of the implementation of a free exchange of cryptocurrency for a variety of goods of those companies that agree to carry out such operations. In this regard, it is impossible to somehow arbitrarily change or fix the bitcoin rate, its cost is the result of a huge number of operations in the cryptocurrency market. We can say that cryptocurrency does not obey the terms of the monetary policy of financial institutions and states in which it operates. Simply put.
Getting a loan in bitcoins is not the same procedure as taking a loan from banks. You register on a certain Internet exchange and advertise that you want to take out bitcoin on credit, give certain obligations to return the borrowed cryptocurrency at interest, and other users decide for themselves whether to provide you with a loan from their own virtual money or not. bitcoins, you can use lending platforms - special services whose members invest their cryptocurrency in various projects. These are cryptocurrency exchanges that act as intermediaries between those who use electronic money. To protect yourself from possible risks, choose only reliable lenders. To do this, you can use the data of special ratings, where each lender has a certain level of reputation. This is a P2P lending option (from English peer-to-peer - equal to equal), that is, in fact, you can get a loan in bitcoins from the same individuals as yourself. The issuance of a loan can be handled by either one lender or a group of investors. Each of the members of the group of investors gives the borrower a certain part of the capital he needs. The more you can interest investors, the more investments will be. In this regard, describe in detail why you need to get a loan in bitcoins. To get a loan in bitcoins, you need to register on a cryptocurrency exchange and submit your application, indicating the required loan amount, the rate at which you will return the funds and the repayment period.
Pros and cons of cryptocurrency
The undoubted advantages of bitcoins and other cryptocurrencies include the following:
Is there a “cryptocurrency bubble” and will it burst soon?
As you know from the history of bitcoin, its rise in price since its inception has occurred several thousand times: in 2010, a thousand bitcoins were sold at 0.3 cents, in 2017 one bitcoin was already worth 10 thousand dollars, and in 2018 its value in relation to the dollar Despite the fact that more and more people are striving to get a loan in bitcoins and generally use cryptocurrency, and its value is growing, there are also many skeptics among economists who do not cease to declare the imminent collapse of the entire electronic market. In their opinion, cryptocurrencies are another financial bubble, and their popularity and cost are associated with human psychology and are driven by the desire to hide the goals of their financial operations and the desire to get the maximum profit from short-term investments.
Before taking a loan in cryptocurrency, weigh the pros and cons. Opportunities and risks are assessed differently by different experts here. It is difficult to predict how Bitcoin will behave in the future. It is best to take a loan in cryptocurrency only under the most transparent conditions.
Conclusion
Many traders make money on digital tokens using margin trading, which allows speculative transactions with cryptocurrencies received on credit secured by a certain amount (margin). A loan from an exchange and a crypto broker is called leverage. With the help of leverage, a trader can make transactions with a value that is several times higher than his own capital in the account.
Leverage is not only a big risk, but also a good opportunity for large earnings, with the correct use of borrowed assets. Today there are quite a few cryptocurrency platforms that provide the opportunity for margin trading. For example, loans can be taken on Poloniex, Exmo, Bitmex.
A few months ago, the major exchange Binance allowed buying Bitcoin and Ethereum with a credit card through the app. On the main site, users had such an opportunity back in January. To make transactions, traders need to add Visa and Mastercards credit cards to their accounts and remember that there is a commission for each transfer.
Cryptocurrency lending is of interest not only to single players, but to the "whales" of the crypto market - institutional investors. In April of this year, Genesis Global Capital Corporation calculated that since January it has issued loans in cryptocurrency for $ 425 million, and in 2018 this amount was estimated at $ 1.1 billion.
Large loans are constantly taken by exchanges, OTC platforms and private firms. At the same time, the lender himself borrows digital money from large players at 4-5% per annum, and then issues loans at a higher interest rate (6.5-7.5%).
Cryptocurrency loans for experienced players in the digital industry are risky, but a real tool to increase capital. The number of those who decide to borrow in digital coins is growing every year. Perhaps in a couple or ten years it will be difficult to surprise someone with a loan in bitcoins, and large banks will offer to issue a loan in cryptocurrency in 15 minutes and in any branch.
There are more and more services offering loans - in tokens or fiat money - secured by Ethereum or Bitcoin. We describe their benefits and risks
Lending has become one of the main services in the DeFi sector, gaining popularity this year. To get a loan, you need to leave a collateral - usually in one of the main cryptocurrencies. Most often, the borrower also receives funds in the crypt.
For example, one of the leaders in the DeFi sector, the Maker project issues a DAI stablecoin secured by Ethereum. The user blocks his ETH in a smart contract and receives a DAI token in return.
To repay the loan, you need to send the same amount of DAI back - they will be instantly burned. You will have to pay interest for using tokens. For Maker, they are 8.5% per annum.
This is less than for a bank loan in rubles. According to the latest data from the Central Bank, in August on loans for up to a year, the average rate was 12.46%, and for a longer period - 10.4% per annum.
Since cryptocurrencies are volatile, in order to get $ 100 DAI tokens, you will have to block ETH for $ 150. Under these conditions, any MakerDAO user can take out a loan - unlike bank loans, which are not available to everyone. Typically, DeFi service clients use borrowed funds to fill liquidity gaps.
Another project, Compound, allows not only taking loans, but also issuing cryptocurrency at 6% per annum. And BlockFi customers can borrow digital assets using credit checks or intermediaries.
There are services that issue loans in dollars, euros or rubles secured by bitcoins. This is convenient when the market has sagged and it is not profitable to withdraw coins that were bought earlier at a higher price.
All services require borrowers to provide the same set of documents: passport, proof of income and residence. For example, Bitbond asks for a scan of a utility bill that the user receives by mail as proof of residence.
To get a loan on BTCpop, instead of a passport, a driver's license is suitable, but an additional photo is required. To increase your chances of getting a loan, you can download a video message. Also, services often request links to user accounts in social networks.
It's all?
In addition to the systems presented, there are also special forums on the topic of bitcoin. There you can find a lender or borrower by posts and topics. Although this method is more risky, it is also the most profitable, because no commission is charged for actions.
Bitcoin concept. Bitcoin is a payment system that can act as an intermediary between a transaction of two parties, an electronic wallet and a credit system, in one person.
Content
- Where can I get bitcoin - a loan and how to do it
- A loan in bitcoins - how to make money on it
- How to get a loan
- Let's explain in detail the essence of each item
- System reliability
- Advantages and Disadvantages of Cryptocurrency Lending
- Risks of lending with cryptocurrencies
- Features of loans in cryptocurrency
- Pros and cons of cryptocurrency
- Is there a “cryptocurrency bubble” and will it burst soon?
- Conclusion
Where can I get bitcoin - a loan and how to do it
Bitcoin on credit. List of companies involved in the purchase and sale of cryptocurrencies.
If you decide to take out Bitcoin on credit, you can determine the list of companies worthy of attention yourself. We bring to your attention simply the most famous companies where you can get a loan in cryptocurrency.
On the payment system itself, loans are not issued, but only transactions are carried out. But specifically for lending, several specialized services, the so-called lending platforms, were created.
Usurers are people who are ready to make investments in bitcoins, borrowers, as a rule, can also borrow bitcoin for the development of their business. Loans can be issued either by one lender or by a group of people, lending the amount to the borrower in installments.
To minimize risks, the sites have lists of the best lenders and borrowers, reflecting the reputation of users, and, accordingly, their level of reliability.
We will analyze several common lending platforms where you can get a bitcoin loan, namely:
- Telegram bot
- BTCpop
- BitBond
- StemFund
- Loanbase
- Bitlendingclub
- BTCJam
- Biterest ($ 5 bonus) and Biterest Instant
- Binance Crypto Exchange
It is much easier for Americans and Europeans to get a loan in digital coins on specialized international services. Loan applications from citizens are not always approved, and yet there are chances if you try your luck in several organizations.
BTCpop.co is a platform that makes it possible to take loans in bitcoins, claims to be a cryptocurrency bank.
BTCpop is a P2P lending platform where private investors issue loans (loans) to individuals or legal entities. The platform establishes the "rules of the game" for users, conducts verification and helps borrowers find an investor.
BitBond.com is a marketplace for raising funds in cryptocurrency for the needs of small businesses. BitBond is quite active: more than one hundred thousand users and the total amount of loans is about $ 4 million.
Bitbond is a German P2P lending platform. The service appeared in 2013, three years later the company received a license from the German financial regulator (BaFin).
StemFund.com is a system that allows you to register and present your project to attract investment in cryptocurrency.
StemFund is a platform that allows investors to lend to individuals and legal entities for up to 1 year. Borrowers are selected in an auction format, where investors offer different lending rates. All transactions are carried out in bitcoins.
The foreign platform Nebeus and the service Cryptobroker.pro issue loans secured by bitcoins. The CoinLoan service works on the same principle. The borrower deposits cryptocurrency funds into the account, then creates an application for a loan, the amount must exceed 70% of the current market value of digital coins. After the loan is approved, it withdraws fiat funds, and after the debt is repaid, it withdraws its cryptoasset in full.
The BlockFi service offers users loans from $ 10,000 secured by an amount in Bitcoin, Ethereum or Litecoin (from 25% to 50% of the loan amount). The larger the cryptocurrency collateral, the more favorable the conditions for borrowers and the lower the interest rate.
Basically, all services require the same documents from borrowers: passport, proof of income and residence. For example, the Bitbond service requires a scan or a photo of the account that the user receives by mail - as proof of residence. To obtain a loan on BTCpop, instead of a passport, a driver's license is suitable, but an additional photo is required; To increase your chances of getting a loan, you can download a video message. Also, services often request links to user accounts on social networks. Each platform has a section that lists a complete list of documents required for loan approval.
Cash loans secured by crypto are issued by many international services. Applications from citizens are not always approved, but if you apply to several organizations at once, there are chances of getting it.
Loanbase
Loanbase is a service that imposes rather stringent requirements on investors and borrowers: in order to apply for a loan, you will have to provide scans of various documents and fill out a large questionnaire.
Loanbase is an English-language platform where you can borrow bitcoin. To do this, you need to register on the site, indicate your personal data and contact phone number. The duration of the loan and the interest rate depends on the conditions provided by the lender.
It is an resource that issues a loan, but thanks to a user-friendly interface and a translator, you can quickly understand the work of the service. To obtain a loan and other manipulations on the site, you must register in the system. In addition, when registering, it is required to indicate personal information, data on the real place of residence, e-mail, telephone and provide scanned versions of supporting documents.
The interest rate on the loan will be from 6 to 10%. The terms, percentage and conditions depend on how reliable the participant in the transaction is, what reputation he has in the system.
Bitlendingclub
Bitlendingclub is one of the most popular platforms. A loan in cryptocurrency is issued by bitcoin holders directly, without the participation of intermediaries. To get a loan, you need to open a wallet in the Bitcoin system and register. In addition, you will need to attach scanned copies of your documents (but you should not worry about the safety of data, since the system has its own protection system. On this site, you can get a loan in bitcoins in two ways:
- apply for a loan in cryptocurrency and wait for lenders to respond to it;
- write to the lender yourself, by sending a personal message, explain why and under what conditions you need bitcoins.
As a result, to get started and get a loan for a bitcoin wallet, you need to go through a simple registration. Personal data is entered, a new account is confirmed via e-mail and a phone is linked, if desired. And you also need to present a scan of your documents in order to get all the service features.
Compared to others, this site owes its popularity to its own system protection. Therefore, you will have to fully register the basic data in order to obtain a loan. In addition, due to the English-language interface, the verification process can be difficult.
BTCJam
BTCJam is one of the platforms working as well. The higher the level of your reputation that you have in the system, the better the lending conditions. To enter the rating, you must also fill out the registration form and indicate your monthly income and place of residence. You can increase your rating by adding confidential information about yourself - add bank card numbers, mobile phone numbers, e-mail, links to pages in social networks.
The youngest site on our list for issuing a loan. It is considered the most advanced and understandable among other competitors. In addition, a user-friendly interface, hints and the ability to choose a native language are the main advantages of the service.
On this site, reputation decides everything. To get the minimum confidence rating, you need to provide the system with the following data:
- Full Name;
- Residence address;
- Income level or salary.
However, in order to increase the initial rating, it is also recommended to perform such actions as:
- Link a bank card, mobile phone and email to your account;
- Go through the verification procedure (as in the previous site for issuing a loan);
- Show links to your profile on any social network.
A loan in bitcoins - how to make money on it
If you want to make money on cryptocurrency, with the help of loans, then you need to go to the opposite side of the process, that is, become a lender. To open your own business on the cryptocurrency market, you do not need to draw up additional documents and pay tax. For this it is enough:
- Complete registration, verification, fill in all the necessary data in the service;
- Successfully close several deals;
- Build a rating and get some positive feedback from customers.
How to get a loan
There are two ways to obtain a loan on the site. First, it is necessary to submit an appropriate application and wait for one of the creditors to respond to it. As a rule, this happens within one to two days. The second way is to contact the right lender directly through private messages.
For those new to the system, the first option is preferable, while the second is reasonable for more experienced borrowers. The fact is that, most likely, not having a sufficient period of stay on the site and reputation, it will be difficult to find a lender who is ready to take risks for a small amount.
The guarantor for the lender, in this case, is the borrower's personal information. If the user who took the loan did not return it on time, then his confidential information is opened for the lender. He can use it at his own discretion.
The borrower is given 10–20 days from the border of the term, warnings are sent from the system and the lender. As a result, if the debt is not repaid, then having received personal data, the creditor has every right to go to court and sue for a much larger amount.
Let's explain in detail the essence of each item:
- ID. Valid identity documents are required to fill out. This can be either a passport of a citizen or ordinary rights. In the empty field, enter the series and number of the document, and then attach the scan.
- Income. Not a mandatory, but highly desirable item for creditors. Here you need to indicate your income and salary. If there are none, then this field can be skipped.
- Adress. As the name implies, this field is filled with the actual and registered address of residence. In addition, to confirm it, it is not necessary to present a passport of a citizen, it is enough to attach any document with a registered address. To do this, even a check for payment of utilities or Internet connections, of course, with your name and surname will come down.
- Next, you need to write your mobile phone number. Linking a number to an account is necessary for emergency data recovery when entering a personal profile. An SMS message with a code to confirm the action will be sent to the mobile phone number. Please note that only one account can be registered for 1 number.
- Email item. Specify the mailbox that was entered during registration. An email will be sent to confirm the verification, follow the link in it.
System reliability
Whether it is worth investing your finances in e-currency is a private matter for everyone. But it cannot be denied that business is gaining momentum on the Internet more and more and there are fewer and fewer of those among entrepreneurs who do not use electronic currency.
A loan in bitcoins, unlike a loan from a bank, still seems to many people to be a real absurdity, because the volatility of the main digital coin is too high. But still there is a demand for such a service, and it is constantly growing.
In early 2018, large financial conglomerates began to prohibit the use of credit cards to buy cryptocurrencies. Payments were rejected by Bank of America and JPMorgan Chase, and then by Canada's Toronto-Dominion Bank. Clients were warned about the possible fall in the value of most coins, which could lead to serious financial losses.
Despite the market collapse, services that specialize only in issuing cryptocurrency loans continued to operate in the digital industry. The popularity of lending in digital coins has grown for several reasons:
Due to the lower interest rates
An increase in the number of traders and investors who find it convenient to receive funds immediately in cryptocurrency.
A simplified system of requirements for borrowers - those who were not approved for loans in banks could easily receive digital coins.
Another type of lending has also become popular. Services issue loans in dollars, euros or rubles secured by bitcoins. This is especially convenient at times when the market is in a protracted decline, and it is unprofitable to withdraw cryptocurrency purchased earlier at higher prices.
Advantages and Disadvantages of Cryptocurrency Lending
The risk is quite high both for borrowers due to the high volatility of digital coins and the lack of regulation in this area, and for investors who may face scammers. On bitcoin lending platforms, you can go through verification using fake documents, there is information about this on specialized forums.
Many services form the rating of borrowers, but sometimes fraudsters, having paid off several small loans in order to raise their status in this rating, take out a loan and disappear with the money. The only judicial precedent, when the court ordered the borrower to repay the debt in cryptocurrency, was recorded in America.
To take a loan in the electronic system correctly, you need to know about all the advantages and disadvantages of bitcoin.
The advantages of bitcoin include
- Confidentiality.
Taking a loan or transferring money, you can be sure of complete anonymity. The actions of the participants concern only themselves and have no outside influence. This brings us to the next point. - Independence.
Bitcoin, unlike other payment systems, does not block participants, does not issue sanctions and does not freeze accounts. Many resources block the participants' wallets without the possibility of recovery, for reasons they only understand. With Bitcoin, you can be sure of the safety of your finances, even if you take out a loan. - Commission.
There is no commission as such for carrying out manipulations with monetary amounts. It is appointed voluntarily and its size is set by the participant. However, it should be borne in mind that the larger the commission, the faster the data processing and action will take place. A zero commission fee is likely to increase the time frame quite a lot.
Like any payment system, bitcoin also has its drawbacks
Namely:
- No Warranties.
Of course, the security system of bitcoin reliably protects all transactions and it will not work just to steal money from someone, but at the same time, if a problem arises, there will be nowhere to turn to. This is a kind of payment for the confidentiality of actions and the complete absence of blocking and freezing of accounts. - Limitations. There is a certain limit, equal to 21 million bitcoins, after which, their receipt is suspended. Such a huge loan cannot be taken for bitcoin.
The advantages of crypto loans are the following features:
- fast processing of a loan on special conditions without contacting official structures;
- obtaining a loan at a lower interest rate than banks offer;
- the likelihood of an increase in cryptocurrency funds in capital turnover;
- carrying out large international transfers with low commissions.
- Loans from exchanges and crypto brokers
Among the disadvantages are the following:
- in case of an erroneous operation in cryptocurrency or loss of access to it, nothing can be done to correct the situation;
- inability to predict the long-term cryptocurrency rate (high risk of a sharp loss in value);
- dependence of cryptocurrency on electronic media: in the event of a global collapse and failure of servers that contain virtual money, the possibility of data recovery will be questionable;
- lack of stable provision of cryptocurrencies.
Risks of lending with cryptocurrencies
For borrowers, the main danger is the high volatility of cryptocurrencies and the lack of regulation. Investors can face fraudulent borrowers who are verified on Bitcoin lending platforms using fake documents. Some even pay off a few small loans to raise their rating, get a bigger loan and disappear with the money.
There is no complete certainty that the rights under loan agreements in cryptocurrency will be protected. In particular, the question arises, how to determine the moment of transfer of values so that it is clear to the court? What documents must be provided and how and at what point in time to determine the value of the cryptocurrency?
Among the advantages of crypto loans are quick registration without contacting a credit institution and the percentage is lower than that of banks. Also, the advantages of such a financial service include the likelihood of an increase in cryptocurrency funds in capital turnover and international transfers with low commissions. If digital money receives transparent and understandable regulation, it is quite possible that it will be difficult to surprise anyone with a loan in bitcoins, and such a service will appear in banks.
With the development of the cryptocurrency market, a service such as a loan in cryptocurrency has appeared. The crypto loan market is just beginning to gain popularity. Many who would like to get a loan in bitcoins or other digital currency are stopped by the lack of clarity of the procedure, its advantages and disadvantages, the reliability of such a phenomenon as cryptocurrency. countries, the most popular today is still bitcoin. As an example, we will take this type of cryptocurrency - as the most popular.
Features of loans in cryptocurrency
Perhaps the main feature of cryptocurrency is that it does not have a special regulatory framework and regulatory bodies that determine the mass of monetary units and their exchange rate. Anyone who has mining capabilities is engaged in the production of currency. The cost of one bitcoin or another unit of digital money (not to be confused with traditional Internet banking) consists of the implementation of a free exchange of cryptocurrency for a variety of goods of those companies that agree to carry out such operations. In this regard, it is impossible to somehow arbitrarily change or fix the bitcoin rate, its cost is the result of a huge number of operations in the cryptocurrency market. We can say that cryptocurrency does not obey the terms of the monetary policy of financial institutions and states in which it operates. Simply put.
Getting a loan in bitcoins is not the same procedure as taking a loan from banks. You register on a certain Internet exchange and advertise that you want to take out bitcoin on credit, give certain obligations to return the borrowed cryptocurrency at interest, and other users decide for themselves whether to provide you with a loan from their own virtual money or not. bitcoins, you can use lending platforms - special services whose members invest their cryptocurrency in various projects. These are cryptocurrency exchanges that act as intermediaries between those who use electronic money. To protect yourself from possible risks, choose only reliable lenders. To do this, you can use the data of special ratings, where each lender has a certain level of reputation. This is a P2P lending option (from English peer-to-peer - equal to equal), that is, in fact, you can get a loan in bitcoins from the same individuals as yourself. The issuance of a loan can be handled by either one lender or a group of investors. Each of the members of the group of investors gives the borrower a certain part of the capital he needs. The more you can interest investors, the more investments will be. In this regard, describe in detail why you need to get a loan in bitcoins. To get a loan in bitcoins, you need to register on a cryptocurrency exchange and submit your application, indicating the required loan amount, the rate at which you will return the funds and the repayment period.
Pros and cons of cryptocurrency
The undoubted advantages of bitcoins and other cryptocurrencies include the following:
- cryptocurrency does not depend on the financial policy of the state, its capitalization is based on the voluntary participation of people / organizations around the world;
- Bitcoin accounts cannot be blocked by supervisory authorities;
- operations on the use of cryptocurrency are anonymous and cannot be canceled by any regulatory authorities (as we said above, they simply do not exist in the field of electronic currencies);
- bitcoins cannot be copied - all digital codes are unique;
- great opportunities for speculation by all market participants, for example, you can provide or receive a loan in bitcoins on favorable terms;
- in the case of lending in bitcoins, there is no fixed commission fee (sometimes a commission as such), it is set by the participants in lending in cryptocurrency. As a rule, the higher the loan commission is set, the more actively investors react to offers.
Is there a “cryptocurrency bubble” and will it burst soon?
Alwaleed, Saudi prince
Bill Gates, founder of Microsoft Corporation
As you know from the history of bitcoin, its rise in price since its inception has occurred several thousand times: in 2010, a thousand bitcoins were sold at 0.3 cents, in 2017 one bitcoin was already worth 10 thousand dollars, and in 2018 its value in relation to the dollar Despite the fact that more and more people are striving to get a loan in bitcoins and generally use cryptocurrency, and its value is growing, there are also many skeptics among economists who do not cease to declare the imminent collapse of the entire electronic market. In their opinion, cryptocurrencies are another financial bubble, and their popularity and cost are associated with human psychology and are driven by the desire to hide the goals of their financial operations and the desire to get the maximum profit from short-term investments.
Before taking a loan in cryptocurrency, weigh the pros and cons. Opportunities and risks are assessed differently by different experts here. It is difficult to predict how Bitcoin will behave in the future. It is best to take a loan in cryptocurrency only under the most transparent conditions.
Conclusion
Many traders make money on digital tokens using margin trading, which allows speculative transactions with cryptocurrencies received on credit secured by a certain amount (margin). A loan from an exchange and a crypto broker is called leverage. With the help of leverage, a trader can make transactions with a value that is several times higher than his own capital in the account.
Leverage is not only a big risk, but also a good opportunity for large earnings, with the correct use of borrowed assets. Today there are quite a few cryptocurrency platforms that provide the opportunity for margin trading. For example, loans can be taken on Poloniex, Exmo, Bitmex.
A few months ago, the major exchange Binance allowed buying Bitcoin and Ethereum with a credit card through the app. On the main site, users had such an opportunity back in January. To make transactions, traders need to add Visa and Mastercards credit cards to their accounts and remember that there is a commission for each transfer.
Cryptocurrency lending is of interest not only to single players, but to the "whales" of the crypto market - institutional investors. In April of this year, Genesis Global Capital Corporation calculated that since January it has issued loans in cryptocurrency for $ 425 million, and in 2018 this amount was estimated at $ 1.1 billion.
Large loans are constantly taken by exchanges, OTC platforms and private firms. At the same time, the lender himself borrows digital money from large players at 4-5% per annum, and then issues loans at a higher interest rate (6.5-7.5%).
Cryptocurrency loans for experienced players in the digital industry are risky, but a real tool to increase capital. The number of those who decide to borrow in digital coins is growing every year. Perhaps in a couple or ten years it will be difficult to surprise someone with a loan in bitcoins, and large banks will offer to issue a loan in cryptocurrency in 15 minutes and in any branch.
There are more and more services offering loans - in tokens or fiat money - secured by Ethereum or Bitcoin. We describe their benefits and risks
Lending has become one of the main services in the DeFi sector, gaining popularity this year. To get a loan, you need to leave a collateral - usually in one of the main cryptocurrencies. Most often, the borrower also receives funds in the crypt.
For example, one of the leaders in the DeFi sector, the Maker project issues a DAI stablecoin secured by Ethereum. The user blocks his ETH in a smart contract and receives a DAI token in return.
To repay the loan, you need to send the same amount of DAI back - they will be instantly burned. You will have to pay interest for using tokens. For Maker, they are 8.5% per annum.
This is less than for a bank loan in rubles. According to the latest data from the Central Bank, in August on loans for up to a year, the average rate was 12.46%, and for a longer period - 10.4% per annum.
Since cryptocurrencies are volatile, in order to get $ 100 DAI tokens, you will have to block ETH for $ 150. Under these conditions, any MakerDAO user can take out a loan - unlike bank loans, which are not available to everyone. Typically, DeFi service clients use borrowed funds to fill liquidity gaps.
Another project, Compound, allows not only taking loans, but also issuing cryptocurrency at 6% per annum. And BlockFi customers can borrow digital assets using credit checks or intermediaries.
There are services that issue loans in dollars, euros or rubles secured by bitcoins. This is convenient when the market has sagged and it is not profitable to withdraw coins that were bought earlier at a higher price.
All services require borrowers to provide the same set of documents: passport, proof of income and residence. For example, Bitbond asks for a scan of a utility bill that the user receives by mail as proof of residence.
To get a loan on BTCpop, instead of a passport, a driver's license is suitable, but an additional photo is required. To increase your chances of getting a loan, you can download a video message. Also, services often request links to user accounts in social networks.
It's all?
In addition to the systems presented, there are also special forums on the topic of bitcoin. There you can find a lender or borrower by posts and topics. Although this method is more risky, it is also the most profitable, because no commission is charged for actions.
