There are lots of Bitcoin lending platforms out there like Bitconnect, Regal Coin, Westerncoin, Hextracoin, Goldrewardcoin, Credence Coin, Falcon Coin etc. and I feel like every week there is coming a new one.
It is hard to keep an overview about them and even harder to decide in which one to invest and in which one better not. It is also important knowing the risk about putting your money there.
In the following article I try to give you an overview of what those platforms do exactly and based on my research I tried to put together a little comparison for you, so you know what you are getting into. As many people refer to those platforms as scams, I also try to list the Risks and Chances by investing in those platforms from my point of view.
1.0 What is a Bitcoin lending platform like Bitconnect, Regal Coin, etc. and what is the business model behind?
1.1 Lending
The idea is that the user transfers bitcoin (or other cryptocurrency) to the platform, then changes it in the local currency (i.e. Bitconnect coin) and lends it for a certain amount of time to the platform in order to achieve profits. The money is usually locked up for a certain amount of time (i.e. 120 days). Usually the interests (often about 1% per day) are paid monthly and can be withdrawn immediately from the account. So many people have been doing 20%-40% per month of your initial invest on this.
1.2 Pyramid scheme
On top of this, there is a pyramid scheme referral program. That means when you (Level 0) refer a friend (Level 1) to the program, you get a certain amount of the invested money of your friend as a bonus. When your friend then refers somebody (Level 2) and this guy invests, you (Level 0) still get paid a certain percentage of the guys (Level 2) investment and so on.
Like this there is a huge incentive to get others interested in the program and to recruit more people in the pyramid scheme. For this many people refer to it as Ponzi Scheme other even claim that Bitconnect is a scam along with other lending platforms.
Which makes us come to the next chapter - Risk and Rewards:
2.0 Risks and Rewards
Like in every other investment the bigger the risks, the bigger the rewards.
And it is really important to know what to get into here and do your research.
2.1 Risks:
- As they claim, the money you lend the platform is in most cases invested by a bot that generates interests on a daily basis. As I do not understand how it is possible to earn positive (however fluctuating) interests every day however it could be highly possible that users are paid their interests also by fresh money from newly acquired members.
- When this is the case the system only works a long as new members join the platform and invest (which is for example the case with bitconnect, which is growing continuously since one year having the ninth larges market cap in the whole crypto market).
- Should suddenly lots of investors pull out there money the system could collaps
- in a worst case, all your money on the platform could be gone
This is why I advise new users to withdraw a certain amount of their interests on a daily, at least monthly base in order to continuously reduce their risk. Generally in Crypo you should only invest money you can lose. Never make debt in order to buy crypto.
2.2 Chances:
- There are people who earn a lot of money with these platforms, some claim to make even 5 to 6 digits a month. And I believe them. The higher the risk, the higher the reward.
- it is a way to generate passive income. If you invest i.e. 5,000 USD at 0.9% per day you earn 45 USD a day. That are 1.350 USD per month. That means after 3 to 4 months you can have secured your investment because you earned over 5,000 USD in this time alone with interests (that you can withdraw daily).
- Even without gaining new members you are having the chance of earning 3x to 4x gains a year alone with your interests
- If you refer others you can earn additional money
Please make your own decision whether or not to invest in this kind of business.
With this site I want to help you educating yourself about the business model, the risk and reward in order to make your own decision. I invest in only a few of these platforms because I think we are having lots of startups right now that are just copy cats.
3.0 Lending Platform Comparison – in which Platform should I invest?
(i.e. Bitconnect, Regal Coin, Westerncoin, Hextracoin, Goldrewardcoin, Credence Coin, Falcon Coin etc.)
Bitconnect: https://bitconnect.co/?ref=cryptodanson
Regal Coin: https://regalcoin.co/ref/CRYPTODANSON
Westerncoin: No Referral Link yet
Hextracoin: https://hextracoin.co/register?referrer=cryptodanson
Goldrewardcoin: https://goldreward.io/join/danson
Credence Coin: No Referral Link yet
Falcon Coin: https://falconcoin.co/app/CI/customer/register?Ref=cryptodanson
I hope this article helped you in your decision, however it may be. If you decide to invest I would be very thankful when you use my referral link.
This is a subjective analysis based on my research, also containing my views and opinions.
I do not guarantee the correctness of the above posted information.
This is not investment advice. Please do your own research.
Thank you for reading and your feedback.
Your Crypto Danson
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STOPLast week I got in on the lending part of Westerncoin's platform. They are doing a 1:1 match for the time being. They have been paying out daily so far. Anyone interested can us my referral link https://www.westerncoin.co/brihead22
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