How Does Bitcoin Lending Work? [Best Guide-2019]

The trading of cryptocurrency has been part of many people’s day to day activities. For the secure and fast transactions of cryptocurrencies, many people also made some profit through this. Also, there are many people who start trading, investing and most of the time lending cryptocurrencies. Especially bitcoin.

bitcoin lending

Without realizing that scammers can be found anywhere people start investing. Many people start lending bitcoin without knowing the rules and regulations. The truth is that lending or investing in bitcoin is not as easy as it sounds.

For that one need to do some bits of research and studies and some logic as well. Lending bitcoin has to be done after some careful thinking. For this, we need to check as to how this system works.

How does Bitcoin Lending Work?

Now to lend your bitcoin to someone you need a specific platform. Not specific but an insured platform to be firm. There are many bitcoin lending sites. But you need to look out for the best bitcoin lending sites. Then you can access and control who to lend. Moreover, lending bitcoin will be fast and secure.

The system to lend a bitcoin is kind of straightforward. In case of the borrowers need to put their bitcoin as collateral. After that, you have to agree to the terms and conditions of the respective platform. After checking through everything the borrower shall receive a crypto load.

In case for the lenders, they also need to agree to the agreed duration and rate. Plus, they need to lock up or secure their funds. Then it shall be easier for them to get their funds back in time plus earn some more interest. But note that you have secured your bitcoin and have lent to someone with more experience. 

For example, someone wants to borrow bitcoin from a lender. Then you have to create a listing. The listing includes the interest, rate and the due time for returning bitcoin. The difference would be that you will get a loan from one bank in reality.

In the virtual world, there will be more than one lender to lend you bitcoin. Your loans shall be published before many lenders and they shall choose to invest or say lend you bitcoin. This is almost like taking a loan out from a bank.

The difference is there are no other such legal paperwork or documentation is needed. So the factors that you need to keep into consideration before lending or borrowing bitcoins are:

1. Trust Score

Now I have mentioned before that not much legal documentation is needed like the real world. It is not entirely true. This is because bitcoin shall be lent once the trust score in the platform is high. Also known as a credit store it helps to verify the borrower’s identity and financial history. For that, some documents are needed to be submitted in the platform.

2. Verification and Funding

First of all, you need to open up an account in a bitcoin lending platform and verify your account. After the account is successfully verified then you can put up your lending and borrowing information. After that, you can receive offers and other things on the platform.


It sounds easy and tricky at the same time. Tricky because one cannot lend someone bitcoin. Especially not without researching a bit about the correct platform and borrower. Hence, it will be illogical to make haste for bitcoin lending.

Also Read- 10 Tips on Managing Your Finances [The Best Guide]

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