Crypto Lending – A word to the lenders (part 5/5)
There are many great lending platforms that can offer great returns and make this way of investing far superior to just regular holding. However, the old saying still remains true: if you are not the owner of your private keys, you are not the owner of your cryptocurrencies.
This saying holds true for crypto lending platforms as well. The concept of lending cryptocurrencies is more than outstanding and will surely flourish. However, one must first worry about security rather than be hyped up about potential gains.
A platform might have the best crypto interest rates but fail in some other departments, such as the safety and security of the customers’ assets.
In January 2018, a cryptocurrency lending platform called Davor Coin made an announcement: “Lend us your funds, and you’ll have the chance to win a prize of $1,000,000.” People from all around the globe got overly excited and started lending their money to Davor Coin. Just a week later, the platform received a cease-and-desist letter from the state of Texas.
Davor Coin’s lending platform scheme worked only as long as values kept rising. However, when cryptocurrency values went down, Davor Coin crashed. The platforms such as this one that did not crash were fined by the SEC or given a cease-and-desist letter from the same SEC regulators, which meant they were under investigation for securities fraud.
Bitconnect is yet another great example of such platforms, as is Lendconnect. Both of these companies offered a RoI that was ‘too good to be true’; they indeed were too good to be true. These ‘great opportunities’ are also called Ponzi schemes.
Bitconnect offered a 1% return per day compounded. This certainly couldn’t go on forever. Lendconnect went even further and offered up to a 164% return on investment! What’s shocking is not the attempts of scams such as these, but the number of people that fell for it.
Crypto Lending – What does the future hold?
As they say, money makes the world go round. The same goes for cryptocurrencies as well. It’s evident that some cryptocurrencies are slowly but surely transitioning into crypto assets.
To learn the basics about how to earn interest in Bitcoin and other cryptocurrencies is getting simpler and easier by the day. As soon as these lending platforms find their audience as well as their place on the market, we will witness so far unseen financial tools working together to open the world of finance to everyone, including the unbanked.
Lending your cryptocurrencies is becoming safer, easier, and an overall great way to earn passive income. However, for more safety and better returns, you will have to stick to the best and safest crypto lending platforms that offer good crypto interest rates while still being insured for your safety.