This is my first post on Steem. While I’m new to this community, I’m not new to the crypo-space itself. I have been buying (and regretfully selling) bitcoin, litecoin, dogecoin since 2013. Recently, however, I have learned about another side of using crypto coins, trading and lending on exchanges. I am not very good at trading, especially margin trading, however I have been able to find a way to make a small, but steady, increase in my coins doing lending on Poloniex. At first, I was doing this manually, however I found out about an automated way to do this using your own computer. Following the instructions found here (https://poloniexlendingbot.readthedocs.io/en/latest/installation.html#installing-on-a-computer) I was able to start doing automated lending. The script is very smart, lending the highest rates available using all the coins that you have on the exchange.
However, as I have done more reading, I have started to question whether or not this is a safe method to be increasing my coins. Many holders of crypto coins have been pointing to the dangers of leaving your coins on an exchange. I know that everyone in the cryptosphere remembers, or at least has heard of, the problems faced by many when Mt. Gox was hacked, losing many of their holdings. Could the same happen again?
Also, many have stated that the safest way to store your coins are either in a hardware wallet, or in cold storage using good old-fashioned paper. While I realize this is the safest method of storage, it is hard to pass up the opportunity to make some returns on your coins. To me, it feels like a bit of a waste just to let them sit around. Then again, with the amount of new users coming into bitcoin, and other crypto coins, possibly letting them “sit around” off-line is a great way to have them increase in value naturally.
Another aspect that has been bothering is the possibility of the upcoming hard-fork with the bitcoin blockchain. Poloniex has stated that in the event of the hard-fork (which may occur as soon as August 1) any bitcoin out on loan will not fork. This means that you will only receive one type of coin. Holding your own bitcoin in your own wallet will guarantee that you will have access to both chains, significantly increasing your chance for profits. But, there is always the possibility of pulling your coins off of the exchange before this date.
So, what do you think? Is it safe to lend on Poloniex? Is it really as big of a risk as many people say? Or, is it a good (safe?) way to earn some extra coin?
Well the loans are usually 2 days and it seems like a reasonable way to have safe added increases but maybe just don't have all your eggs in one basket
Sound advice. The nice thing about the bot is that if it is over 0.2% it will automatically make the offers for 60 days. This can be tweaked in the settings, though.