Bitcoins or cryptocurrency has been the talk of the year. With the exponential increase in the decentralized currency system, Bitcoin’s value has been steadily increasing.
Cryptocurrency is a digital currency without any physical form which can be used to purchase and sell goods online.
This trend began in 2009 when the first bitcoin was mined. Today, we will concentrate on using bitcoins that are collateral or maybe use lend and borrow them. Lately, you definitely would have noticed the bitcoin transactions going through the roof purchasing commodities or more cryptocurrency alike.
Next-Gen lend and borrow?
We all know that bitcoin doesn’t have to be reported to any bank and it is decentralized. So, this global currency could be used as any other paper currency to lend or borrow without any protocol bound, unlike the loans you get from your local banks and financial institutions.
Peer to peer platforms has been created to get an instant funding by lending or borrowing bitcoins. This can be used to finance a small or medium business through something called Bitbond.
Bitbond and how to use it
With the regular risk of lending and borrowing money, there is an interest rate involved here too. Borrowers are required to provide their personal information along with ownership of social media and e-Commerce accounts.
With loan rating from A to F, the risk is accessed for the accounts links with the previous history.
In case the loan is unpaid, you do the oldest trick in the history; take legal actions or sell the loan to a debt collection agency.
Bitbond can be created using 3 simple steps:
- Create an account
- Verify your identity
- Lend or borrow process
We discussed how to lend or borrow bitcoins. However, we also need to know its pros and cons before we can decide if it’s really worth the effort for cryptocurrency lending.
- Entirely new asset class, the sooner you get, the better your earnings will be
- Big spenders are yet to firmly establish themselves here
- Colossal growth spurt expected in this online financial sector
- Buy fraction of a bitcoin if you are unable to buy the whole
- Largest and best-know cryptocurrency is bitcoin. However, there are smaller ones too
- Limited supply potential which makes it more valuable
- Big price swings, you need to be ready for both the worst and the best-case scenario
- Many financial experts predict bitcoins to not capture a part of mainstream market
- There are no set regulations
- All governments are concerned about unregulated nature of the currency
- Both coins and exchange scams have been reported, so you need to be careful when investing your hard-earned money
With the pros and cons out in the open, you are welcome to take the risk of buy, lend and borrow this cryptocurrency. This currency has been in the market for nearly a decade, but just it has taken the spotlight. No one knows the legitimate reason for this is happening now, but people are surely buying this currency at an alarming rate. We hope this information will help you make that smart decision of dealing with cryptocurrency.