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  1. #1
    Sherlock's Avatar
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    Default Lending bitcoins

    I am not sure if anyone considered this option, but there is a possibility to lend bitcoins (and other cryptocurrencies).

    I am not talking about a "bitcoin lending club" like btcjam.com, which really is a bit hardcore place.

    I am talking about Bitfinex or Poloniex, where it is possible to lend the bitcoins for margin funding of traders/gamblers. If there is no fork or other irregularities, there is defacto only the risk that the exchange will go under.

    Recently the Poloniex rate is almost 0.1% per day ~ 3% per month, but there are days when it is even higher (but also lower).

    Edit: Bitstamp->finex
    Last edited by Sherlock; 29 April 2017 at 4:06 pm.
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  2. #2
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    I didn't know that one can do that. Very interesting.
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  3. #3
    MMM
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    Can you explain more?
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  4. #4
    Sherlock's Avatar
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    Default

    Look 4 example here: https://poloniex.com/lending#BTC
    You see bid and asks for loans. People need the loans when they trade with a leverage. E.g. Someone has only 1 bitcoin, but he take take leverage=loan 1x-100x depending on exchange, so he can bet more than one bitcoin on the price movement. It is the same system as with forex, but with forex there is a lot of liquidity, so the loans are very cheap. With bitcoins and cryptocurrencies it is not lie that, after all only 16M+ bitcoins exist.

    So the yearly rates are way in DD territory. But yes, there are the risks that the exchange will go under. They are not small.

    Also the exchanges offer API and based on the API exist lendingbots, so it is possible to customize your loans (I use bots only at fiat lending club).

    In a way it is still the same job. Providing some services to gamblers.
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  6. #5
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    Default

    i'm going to cross-post the following that i also responded over here
    http://www.gpwa.org/forum/what-odds-...tml#post843702

    "at poloniex, especially watch out if you have your bitcoin on loan, in case of a fork you will only receive back your bitcoins, not the coins from the other branch (e.g. bitcoin unlimited), details , see https://poloniex.com/press-releases/....17-Hard-Fork/
    this is also the reason why the loans percentages skyrocketed a couple of weeks ago, half of the people understood this, and stopped offering their bitcoins for lending, the other half i guess did not understand or was not aware of it that you could lose a lot of money. now , lending percentages are low again and everybody continues like it's business as normal. in case of a fork, casualties will fall over here for sure that were not aware of this."

  7. #6
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    Default

    BU is dead, right? UASF is dead too. No fork happening soon. For sure one has to take care at difficult times, but then the premium is extreme.

    The lending term usually is 2 days, so there is plenty of time to react. Everything is reward vs risk.
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    yeahfree is offline Private Member
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    Default

    BU dead.. not yet. i believe they are still somewhere between 35 and 40%, not sure. i personally don't think a fork will have to happen soon. best to not fork unless really needed. but, even though it might be a small risk, it's still a risk that everybody should be aware of the consequences in case a fork might happen and he is lending btc's on poloniex.

    i have used poloniex for lending my bitcoins a lot, and it works well. i only dont feel too comfortable with poloniex itself compared to other exchanges like kraken or bitstamp.

    i didn't know you could also lend bitcoin on bitstamp, might be a good moment for me to take another look at them again.

  9. #8
    Sherlock's Avatar
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    BU movement is not dead, but BU fork is dead, they admitted it. They will not try with 51%, after Antbleed and Asicboost. They know it is a suicide.

    Fork was never a real thing. The miners want the status quo, so they are using pawns like Ver.
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  10. #9
    MMM
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    didn't see that option on Bitstamp.
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  11. #10
    Sherlock's Avatar
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    Default

    sorry, i meant bitfinex (not good place to go atm, until their problems have resolution)
    from the bigger places is lending possible also on quoine (I never tried finex or quoine)
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  13. #11
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    Default

    What sort of security do you have on "lent bitcoins"?

    How does the exchange / market ensure that the bitcoins are returned as agreed / when agreed / with the interest paid?
    I imagine that if something goes wrong it would be almost impossible to identify anyone / get them into a court-room?

  14. #12
    Sherlock's Avatar
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    Default

    It is for margin trading only. The borrowers can only trade with the money. Of course they must close the position and return the money before they withdraw. The interest is simply substracted from their balance automatically.

    Imagine: You have one 1 bitcoin. You borrow 2 more, to have 3 for overnight trading. You are trading/gambling. Either you end with more money and you return the 2 btc + interest; or you end with a loss, but either you close the position and again return the money + interest or of you being margin called and again you return the money + interest.


    Do you understand?
    We are all bloodsucking ticks, hungry, devious
    each one latched on to the ass of the previous
    when the last and the first latch on it can be shown
    ass-blood sucked by the first from the last is his own

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