If someone ever told you that you could increase your holdings of almost any specific coin without any risks and effort, would you believe him? Well, to us, this seems quite insane.
But, since we are writing this article, there appears to be an opportunity. One smart programmer from Mannheim, Germany, developed a helpful little tool with a significant impact.
What is coin lending?
The tool we are going to talk about is called a coin lending bot. Perhaps, you are wondering what we are talking about, so let us explain it to you.
Currently, there are two major cryptocurrency exchanges that support lending your favorite coins or USD to other traders: Bitfinex and Poloniex.
Within this feature, you can set several parameters, such as interests, as well as amount and duration, to make a suggestion to other traders, or you can also only accept an offer of those.
The trader who will borrow the money is not trying to trade, to earn a profit with it. If he does, it will be great. But if not, both exchanges will provide an incredible feature.
The moment when his account balance falls below, (=on) the amount that he has lent plus the interests, the so-called Safeguard activities by itself and forces his account to send you the coins, he owes you.
As you can see, this function will lead to an entirely low level of risks.
What does the coin lending bot do?
Here, we will explain what the exact function of the so-called bot is.
The main issue with lending digits on the cryptocurrency market is that they have their volatility on an extreme level.
If your purpose is to lend your coins manually, you will have to be aware that you should log into your account every day (or even more frequently), as well as check the momentary interest rates and place an order.
This seems quite annoying, right? That is precisely where the bot comes in. He will automate these steps, as well as lend coins (or USD) 24/7 for the best possible interest rate. But, this is not the best thing.
Besides his fantastic portability, this bot is entirely free of charge. Additionally, you will not even have to download anything the bot’s website controls the whole process.
But, you will not have to worry about the bot stealing your money. He will just access your account via API Credentials and not with your username or password.
It means that the bot does not have the permission to perform trades or withdraw funds.
Are there any negative aspects?
There are, of course, always two sides to every coin.
One downside could be the possibility that Bitfinex or Poloniex somehow run into bankruptcy. In this scenario, it may affect every coin stored in their wallets.
This may have happened previously to other exchanges, but as a matter of fact, both of the transactions are currently among the most significant crypto exchanges in the world.
The second point could be the failure of the Safeguard, which is not very likely as well, but, yet, it is still possible.
The third problem, depending on where you are living, might be the fact that some countries have a different policy on the taxation of profit by interests.
And last but not least, in case of the bot lending your money for two days or longer, you will not have access to it until the determined duration is over or the Safeguard ends it earlier.
How should we use the bot?
If we take all these factors into account, we can see that this may be an excellent chance for holders that do not fundamentally need constant passage to the coins.
Of course, before you begin to use the bot, you will have to do your research like always. Particularly, if there is a possible difference in taxation that is affecting you.
After that, if you still want to lend your money via this bot, you will find anything that you need on www.coinlend.org.
The English version is https://coinlend.org/?locale=en).
So, if you are satisfied with the bot, it would be nice from you if you donate a small amount to the creator, as the whole application will be completely free of charge and it also does not have an advertisement at all.