Bitcoin
How To Generate Passive Income with Bitcoin Peer-To-Peer Lending using BitBond
A while ago you decided to buy bitcoins, not only because cryptocurrency seemed as an exciting idea, but also because you were looking for investment opportunities. Now that you have found a secure way to store your bitcoins and can comfortably navigate through bitcoin exchanges, you may be asking yourself, what next? The good news is, there are various ways you can invest your bitcoins such as cloud mining, margin lending on exchanges, and investing in initial coin offerings (ICOs).
In this article, you will be introduced to one of the best ways to invest your bitcoins, which is bitcoin peer-to-peer lending using Bitbond.
What is Peer-to-Peer Lending?
Peer-to-peer lending refers to individuals lending to other individuals or small businesses via an online peer-to-peer lending platform. This allows individuals and small businesses who struggle to secure a bank loan to receive funding and allows private investors to lend money for a high-interest return. Peer-to-peer lending returns are higher than those of government bonds, for example, as individuals and small businesses have a higher credit risk and are, therefore, more likely to default.
Bitbond is the first and leading peer-to-peer lending platform using the digital currency bitcoin. That means that small investors from around the world can engage in peer-to-peer lending without needing a bank account.
If you believe that the price of bitcoin will continue to appreciate and you want to earn interest income on your bitcoins, then bitcoin peer-to-peer lending is an excellent investment opportunity.
How to Invest in Peer-to-peer Loans using Bitcoin
To invest in peer-to-peer loans you simply sign up to the Bitbond platform, deposit bitcoins into your Bitbond wallet and then browse through the available investment opportunities. Once you have identified the borrowers you want to lend to you invest your bitcoins into these loans. As soon as the loan has been fully funded your investment in that loan is finalised and you will start receiving monthly repayments with interest until your loan matures.
Different borrowers have different risk classifications, time horizons, and interest rates. That allows you to adjust your levels of risk to the levels of returns you are seeking.
Your loan repayments will go straight into your Bitbond bitcoin wallet and you can then reinvest those funds or send them to a bitcoin exchange to exchange them back into fiat currency.
Diversifying your Lending
Investing in bitcoin peer-to-peer lending using Bitbond has a number of advantages. Key among them is the decentralized nature of bitcoin, which is not beholden to any country like other global currencies are. Therefore, this means whether you invest in someone from the United Kingdom, or Kenya you don’t have to worry about currency conversion rates.
Diversification is key when it comes to peer-to-peer lending. To reduce the overall default risk of your peer-to-peer loan portfolio, it is important that you spread you investable income across several loans. That way, if one borrower defaults, your overall loss is limited due to your diversification. Bitbond allows users to make investments as low as 0.01 BTC. This makes it possible for every user to diversify their lending portfolio across continents, people, and credit ratings. This, in turn, lessens the risk of borrower defaults.
Low Fees
A key feature about bitcoin peer-to-peer lending is the low fees involved for both lenders and borrowers. In the case of Bitbond, there are no charges incurred by the lender for investing or registration. A lender on Bitbond can expect to get returns on his investment without having to fork out money to cover the associated loan expenses.
In addition, Bitbond has one of the lowest origination fees you can find anywhere. The fees range from 1%-3%, the former being the smallest term loans and the latter, the longest term loan. Also, the minimum amount a borrower can loan is BTC 0.01. The maximum limit depends on the borrower’s ability to repay the loan.
Lenders can evaluate borrower’s business information
Unlike conventional P2P sites, lenders on Bitbond can learn more about borrowers through social media or by engaging them directly via the platform. Most borrowers on Bitbond are online entrepreneurs who sell products on large e-commerce platforms such as Amazon or eBay. You will find their social media and e-commerce accounts linked so that you can get a very good idea of who you will be lending to.
This means a lender can check out the borrower’s eBay page and read the customer feedback, which can help him decide whether or not to fund a project. Such stories are more reliable compared to the number of Facebook and Twitter followers a borrower possesses. Most traditional peer-to-peer lending platforms do not have this feature.
Higher Returns Than Other P2P Lenders
In 2015, US-based peer-to-peer Prosper recorded $14 billion in returns and an average interest rate of 6.87%, while its largest competitor, Lending Club, has an average interest rate of between 6%-8%. However, these returns pale in comparison to the to 13% average APR that you can generate on bitcoin peer-to-peer loans on the Bitbond platform.
Bitcoin P2P lending offers you one of the best ways to grow your money, as bitcoin usage continues to increase and new developments in the blockchain are creating more opportunities. Platforms such as Bitbond, do not have any hidden fees and offer competitive returns on your loans, thereby making P2P lending an excellent way for you to earn passive income regardless of where you are in the world.
If you want to start earning passive investment income through bitcoin peer-to-peer lending, sign up to Bitbond today and get started!
Statistics, examples, and ways to legally use cryptocurrency
October 1, 2013, was a turbulent day for San Francisco Public Library. A dozen FBI agents pretending to be usual visitors surrounded a man sitting at one of the tables, took his laptop and put a pair of handcuffs on his hands. That man was Ross Ulbricht, founder of Silk Road – the largest darknet marketplace for drug dealers, killers, and other criminals. The seizure of Ulbricht was supposed to tackle the illegal online trade, but, as the news site DeepDotWeb wrote, the bust was “the best advertising the darknet markets could have hoped for”. The reputation of cryptocurrency also suffers from associations with terrorists, who sometimes use it for their needs. How big is the real scale of the problem? And how many legal ways to use crypto exist? ChangeNOW has dived into the topic – and suggests you an overview of the current state of the problem.
Highlights:
- The drugs trade volume using cryptocurrency is relatively large
- Crypto was a significant reason why a part of drug sales migrated to the web, though stays yet not viable and anonymous enough for dealers (same as for terrorists)
- As efficient use of blockchain technology requires good infrastructure, crypto remains not suitable enough for many terrorist groups
- However, some terrorists are trying to adjust to anonymity threats and hold fundraising in crypto
- Legal ways to use cryptocurrency include dozens and vary from IT services to car rentals
Crypto & Drugs & Rock’n’Roll
The total volume of the online drug market using cryptocurrency is around $1 billion. It is located in the darknet, which provides an attractive, profitable, and mostly secure environment for drug dealers. Cryptocurrency, in turn, allows making payments that are hard to be tracked by authorities. This is how blockchain technology has helped to bring a big part of drug sales online from the streets. And it’s not only about drugs themselves – many legal opioid drugs are illegally sold here, too.
However, cryptocurrency is not always as secure and anonymous as it is thought to be. The information about any transaction ever made stays forever in the blockchain, which makes the system way more transparent than cash payments. This is a significant limitation for using crypto in illegal purposes.
According to the University of Technology Sydney, about 46% of criminal activity of each year is connected to Bitcoin. As for the drug sale itself, trade volumes in crypto keep rising, but the percent of Bitcoin drug transactions out of all transactions goes down. This means Bitcoin is more frequently used for legitimate purposes.
What cryptocurrency is used for drug sales most often? Surprisingly, privacy coins such as Monero are used only for 4% of transactions. Due to its pioneer position, Bitcoin is used in 76% of all deals despite all its anonymity risks.
The main problem for drug dealers using crypto is to turn their income into cash. This move remains complicated and insecure. Most cryptocurrency exchanges have instruments to define whether a transaction is coming from a suspicious source like the darknet. The rise of Monero use in the online drug market will hinder such tracking. However, for the reasons listed above, crypto is unlikely to completely replace regular cash in drug sales in the foreseeable future.
Cryptoterrorism
The views on how much cryptocurrency is used and will be used by terrorists vary widely. While some claim that terrorists have no infrastructure to use it and the methods are not secure enough, others argue that they are learning fast and adjust to crypto rapidly. Let’s see what both sides say.
Not actively using, unclear future
Lack of appropriate infrastructure, inability to use crypto. Most terrorist groups settle in the Middle East region, especially on its remote and war-torn territories. The vast majority of roads and technological infrastructure have been destroyed. In such circumstances, cash remains the most common and convenient way to pay and fundraise. Imagine a gun seller in a Syrian village – does it look like he has a tool to accept Monero?
Anonymity threats. Given the relative transparency of blockchain mentioned above, crypto might remain too unsafe for terrorists. Miners can see any potential terrorist money exchange while checking transactions, and it’s not too hard to see who sends them money. It can change with the rising use rate of privacy coins, but the ability to spend such money remains questionable.
Increased attention to crypto by the authorities. As the number of transactions keeps rising, more regulatory bodies’ attention gets focused on cryptocurrency, which apparently makes terrorists nervous and cautious.
Problems of specific currencies. While top cryptocurrencies like Bitcoin receive much regulatory attention, others remain marginal and unreliable because of a lack of support. Conflicts and uncertainty lower the trust to such cryptocurrencies – yes, even terrorists’ trust.
Using actively now, increasingly in the future
Terrorists seem to be rapidly learning to escape from tracking in blockchain. Several years ago it was easy to find any address or transaction made for a terrorists’ fundraiser. Today they use well organized and finely designed websites, where detailed video tutorials show how to donate money anonymously. Unique Bitcoin addresses and other crypto tricks are used to preserve security. Analysts from intelligence services claim there’s only going to be more such cases. And, of course, privacy coins are a “great opportunity” for terrorists too.
Shift to cryptocurrency is a reaction to economic sanctions. ISIS has lost most of its territory and resources, Hamas has been sanctioned by the West. Having been cut off from all main financial institutes, terrorist groups had to find other pathways for their financial activities – and cryptocurrency appeared to be the best substitute.
There might be difficulties and inconveniences, and the number of terrorists using crypto is yet unknown – but as we can see, digital money in terrorism is reality. Same as in drugs. And this is what cryptocurrency is notorious for, lacking trust among millions of people. The reputation of some of the exchange services only adds to this mistrust – ChangeNOW has carried out a special investigation on how such platforms may cheat their clients. But can you buy anything besides heroin and firearms with your crypto? What about pizza or a concert ticket?
Only Antarctica left
Cryptwerk, a platform monitoring actual use cases of different cryptocurrencies, says there are about 3500 ways to spend Bitcoin and more than 800 for Monero today. They range from music services to car rentals, from buying clothes to hotel booking services, and from sports bets to virtual tours.
Organizations accepting cryptocurrency are located on all continents besides Antarctica (what could be a better place for crypto than a continent without governments and countries though?). Mostly, in the USA and Central Europe. Bitcoin as the largest cryptocurrency is relatively widespread in India and Southeast Asia.
As this is a whole another topic, ChangeNOW will issue a post dedicated to use cases of cryptocurrencies. As it will be more detailed, who knows – maybe you’ll find a pizza right by that you could pay for from your crypto wallet!
This article was contributed by Jeremy from ChangeNow.
Buroka is a new breed of cryptocurrency exchange for Africa! Currently operating in Nigeria, Buroka was designed to fulfill the needs of modern Africans. Buroka allows customers to buy and sell Bitcoin with Naira via Local Transfers and cash deposits at the bank. In this Buroka review, you will learn more about the exchange and how you can use it to buy bitcoin in Nigeria.
How to Buy Bitcoin on Buroka
Step 1: Account Creation
To create an account, visit Buroka.com and hit the “Register” button. This will lead you to a page where you will be asked to fill in your personal information, including your name, email address, and password. Like any other serious exchange, Boruka will ask you for your ID, Proof of Address, and to take a selfie with your ID to eliminate fraud.
Step 2: Fund Your Account
Funding your account on the platform is straightforward. You can deposit either via bank transfer or at any bank branch. Make sure to use a unique reference code given to you by Buroka deposit system.
Step 3: Buying and Selling BTC
Once your deposit has been credited to your account you can immediately buy your Bitcoin. The buying and selling tab is located on the top right corner of the dashboard. There you can input the amount of bitcoin you want to buy. Once you do that, you then click on the “BUY BTC” button.
Step 4: Storing Your BTC
After buying BTC, Buroka provides users with the option of either storing bitcoin on the platform in a BitGo wallet or any other wallet of their choice.
Currently, Buroka only supports bitcoin (BTC). However, the exchange plans to include other cryptocurrencies going forward.
Security
Buroka exchange makes use of Two-Factor Authentication (2FA). 2FA provides an extra layer of protection for users. With the 2FA in place, an extra piece of information is needed before login into the platform or making any withdrawals.
In addition, Buroka’s platform is also protected using the latest security technology, including web-socket and API protocols that allow for a fast and secure order processing. Buroka also makes use of a well-updated SSL certificate, which makes it easy to detect a phishing attempt.
To further ensure that clients’ funds are secure, Buroka operates segregated accounts. These accounts are held with trusted banks so that clients can enjoy an extra layer of security provided by the banking system.
Conclusion
Buroka is a relatively new Bitcoin exchange with a well-designed, user-friendly interface. The Bitcoin trading platform provides several deposit options, which is attractive for Nigerian Bitcoin traders, as well as competitive market rates for both buyers and sellers.
If you are looking to buy or sell bitcoin in Nigeria, you can give Buroka a try.
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