P2P (peer-to-peer) lending is a huge success story with Prosper and Lendingclub at the forefront of what later became a worldwide P2P financial revolution. Now the banking world is facing an even more inconvenient solution which is the P2P lending with bitcoins. In case you’re not familiar with the cryptocurrency that is changing the way how money is sent and spent, I’d recommend to check out the introduction at Coindesk.
There are quite a few players already providing bitcoin P2P lending services. Amongst them, Btcjam has established itself as the most important lending platform up to date. Tightly followed by competitors such as BitLendingClub and Bitbond. If you are looking for high yield returns using one of the most exciting technologies that humanity has ever created, then you should definitely educate yourself about P2P lending with bitcoins.
Why P2P lending?
Basically lending is getting simplified and accessible for everyone using technology. This is then accordingly reflected in higher gains. As Lendingclub puts it:
Lending Club uses technology to operate a credit marketplace at a lower cost than traditional bank loan programs, passing the savings on to borrowers in the form of lower rates and to investors in the form of solid returns. Borrowers who used a personal loan via Lending Club to consolidate debt or pay off high interest credit cards report in a survey that the interest rate on their loan was an average of 7.0 percentage points lower than they were paying on their outstanding debt or credit cards.
By providing borrowers with better rates, and investors with attractive, risk-adjusted returns, Lending Club has earned among the highest satisfaction ratings in the financial services industry.
If I can lend fiat money, why should I lend bitcoins instead?
Ok, now that we know that the lending platform is a huge success: Why do we have to lend bitcoins instead of using ? The answer is simple: You will get higher returns. Bitcoin is not restricted by any government, which means you can take advantage of a global P2P lending platform without the regulatory hurdles of a specific government. Additionally to the savings created by the technology of the platform itself, the global reach allows lending platforms to create savings avoiding bank licensing fees, which again create an increase in potential gains.
Sounds great. How do I get started?
- First of all inform yourself about the risks involved and, as always, and make sure you diversify your investment.
- Once you feel comfortable that this is a legitimate way to create significantly better returns than with standard methods provided by your bank, you will need to acquire bitcoins. Coinbase is a great service where you can easily setup an account and acquire bitcoins, but also exchange them whenever you want into your local currency. However, if you prefer the quick and dirty way, then simply create an anonymous account on LocalBitcoins and find a seller locally.
- With your bitcoins in your (virtual) pocket you can now go setup an account in one of the Bitcoin P2P lending platforms and start getting your first returns.
Tip: Start with a very low amount to get a first idea on how it works and learn while you work your way up to bigger amounts. You can e.g. start your first trials lending 5 cents.