Bitcoin Forum

I have been reading up on some interest accounts out there for BTC and Altcoins and the yields are really good especially when benchmarked against fdic insured fiat.

What’s your take on this? Is this a good or bad idea?

Platforms and exchanges usually offer very low rewards for BTC staking, but for most of the other altcoins, you can get quite decent % back if you decide to stake. Annual percentage yield (APY) goes from few % and up to 50 % in trustworthy websites. The downside is, that for majority of altcoins, you have to store them on exchange or other platform, which brings with it few risks.

The risk of leaving your coins or tokens on exchange is big but it is not biggest one. In fact, the biggest risk is unknown future price of coin or token you invest in and stake or yield it.

In theory, APY can be high but it does not make any sense in the end if after one year, price falls a lot, halves or lost more than that. When you choose a coin to yield, fundamentals are very important because such things can help price to be more strongly survive against volatility of general market.

So if a coin has a good APY in theory, what you need is only a stable price of that coin. Then you can end with good profit after a few months or one year.

Personally I don't stake/deposit my bitcoins to any platforms that offers interest payments against my deposit. There are couple of platforms available though like Celcius or Bitbns etc. But I have never used their service.

I believe bitcoin doesn't need such platforms because bitcoin itself is a super volatile asset which can fetch a big return if you can wait for the right time. So I will continue to avoid those interest payers.

From the perspective of what Bitcoin stands for, I think it's a bad idea - because each user should be their own bank and have exclusive access to their private keys. The risk taken by those who deposit BTC to earn interest is therefore always present, but I understand that it is acceptable to people when they see the interest offered to them compared to traditional banks.

One old faucet that is still active offers just one such option with an interest rate of 4% + per year, and since I have some active refs and that it is a BTC that I have not personally invested in, I use that option. However, if we are talking about a significant profit, less than 1 BTC deposit on such services makes no sense to me. The risk is simply too great for what I can gain from it.

Imho it's usually not a good idea.
You have to either put your coins into a custodian platform/website (this has risks "not your keys, not your coins"), either convert into an altcoin for PoS, LPoS or such (and altcoins are riskier than Bitcoin).
I am not into DeFi that much, maybe I've missed some case(s).

With Bitcoin price rising nicely against fiat, putting a good amount of coins at risk for some tiny APY it's not such a good deal.

For Bitcoin I don't do that since the risk is bigger than the APY, trading is far better than staking Bitcoin.

For Altcoins the APY is worthy and most of altcoins itself is centralized, so staking isn't really bad here since holding the coins itself has a risk. Personally I don't recommend to buy altcoins since you need to take huge risk or can be defined like go big or go home.

As with what everyone else more or less said. It's a bad idea. At the moment there are too many risks for not enough rewards.
Now if a major financial institution did it, with a ton a regulations and insurance and security. I could see it being attractive.
*I* would not do it, but if there was no more risk then a CD or savings account then I would see it's appeal.

-Dave

Most people will tell you that it's a bad idea and I would agree. Staking and earning interest on coins requires that you give up custody of those assets and put them in the hands of someone else.

Ultimately, the choice is yours. Do you think the interest rates are worth giving someone control over your bitcoin? History has shown us that many platforms have been hacked, or the owners have performed exit scams and rug pulls. There is no protection against that and it can happen at anytime if you are dealing with untrustworthy individuals.

Personally, If I had some altcoins that I would be willing to "gamble" with, I would stake them somewhere in return for a decent percentage. But I wouldn't do the same with my bitcoin.

Is it about risking? for me not for Bitcoin owned, but for altcoins I definitely do. Whatever Bitcoin is owned now will be very risky if I do not choose and sort out where to bet it. Even those offers came from the leading exchanges. Bitcoin is still Bitcoin and I will not let it move or be deposited on another party. I prefer to hold it without mixing it with altcoins that can be bet anywhere.

If holding, then i will just decide to hold. My side earning maybe trade with money that i use to trade and not hold. Staking bitcoin or maybe save it and expect for a yield i never think about that because not want to put my money into other people or company because risk that can be come is also bigger.

Loaning your BTC to someone else is risky.

To earn while holding is a pretty good idea but to let somehow do it, instead of yours, like staking is totally risky. But many had done this and become their habit now, perhaps, it was not a problem for as long as it was staked on the trusted exchanges. I actually made this thing, with 2-3% APY is good enough but if you know how the other way that could increase your profit, that was a great idea ever.
I don't stop those people are currently staking but have to be sure that you don't have to complain about whatever happens like hacking is prone to most exchanges.

First, don't mix Bitcoin and altcoins together. They might both be cryptocurrencies, but there's a key difference that Bitcoin is the most reliable project in this field, while altcoins are mostly just investment scams veiled as the next big thing.

Second, Bitcoin already gives you absurdly high returns of investment, so it's simply not worth the risk of losing all your coins to scammers/hackers to get some extra %. Practice shows that when there are centralized custodians that hold Bitcoin, exit scams and hacks are rampant.

Firstly, there aren't much opportunities for Bitcoin out there. The ones available are just not worth it since you've to give up custody of your coins which isn't advisable. The rewards doesn't justify the rewards. Another point to note is that there aren't many opportunities like DeFi for Bitcoin and shady people can just make one with the primary aim of milking peopl their bitcoin all in the name of earning APY/APY rates. NOT WORTH IT.

I'd only be repeating what I said here (https://bitcointalk.org/index.php?topic=5355868.msg57761148#msg57761148) a few months back.  Interest doesn't come from nowhere.  Make sure you understand what you're getting into.  Be careful:

Not really worth for the risk imho and where you do able to see or check out those good interest rates with those platforms which give out interest in fiat?

Staking does only have max of 2-5% APY which i dont consider to be a good idea or could really equal to the risk you've been putting because
we know that centralized platforms does have the tendency or risk on running away with those funds.

So i dont see for it to be worth or considerable but still its your choice to make though.

There are other platforms these days that offer much higher compare to centralized exchanges offering, most of them are in the different chains, like Ethereum network, Solana Network, etc.
Bridges and they will become like wrapped Bitcoin on the respective chain then you can use it to farm, like yield farming or just a normal stake/deposit.

But then again, it's still not 100% safe since most of these are smart contracts, there could be a bug on code or can be hacked.

I think it's better to keep your BTC in your own wallet rather than putting it on some exchange that will offer a small number of fees that won't really matter to you. This time, the pros cannot overtake the cons. Imagine you are after the small percentage fees but ended your BTC stuck on their exchange? This has happened before and it would not be impossible to happen again. I experience such a thing when I cannot withdraw my crypto assets on Okex when their withdrawal function was not working for a month.

for me storing BTC has two views on the benefits that are obtained by a person who keeps it and both have their own advantages. The first is storing in your own wallet, you get a profit when the market price rises and can be sold at any time, while the second saves it to the party when you get a fee or interest from the income saved by the owner of the BTC asset. So both have their advantages and disadvantages.

If you want "interest" then you better work on it yourself instead of taking a big risk by handing your coins to someone else that may or may not be giving it back to you. One way is to start your own business with the funds you have or if you are serious enough you could even partner up with other people to increase the capital. How do you think big businesses started? Just like this. You have to put some effort in and take some small risks.

Likely the risk is there especially now that you leave it on an exchange where you don't have that total control of all your bitcoins and the earn you may get. Not that bad but in the sense of security over it, keeping it for over a year or even lower than that is still risky action on your part.

Capitalism is all about risk.
A company working for profits takes risks.Zero risk usually means zero profit.
A bank that gives loans is earning interest rates,which is also a profit,which means that the bank is getting paid for taking the risk to lend money.Bank loans are covered by assets,like mortgage.
I have nothing against earning interest for your Bitcoins,but only if you give loans that are covered by a big enough collateral.The collateral must be at least 120% of the loan amount.
Sending your Bitcoin to some crypto company,which is promising you X% annual interest is a big NO for me.
Any crypto company can scam you at some point.It doesn't matter how legit the company seems to be.
 

In days gone by, maybe.  In practice, that's not remotely true now.  There is no risk to them because governments are happy to steal money from the wider populace to pay for any losses.  "Too big to fail" has set a precedent that will likely not be undone in our lifetimes. 

I don't think satoshi ever uttered the word "interest" on these boards.  And "interest" was only used in the whitepaper in the non-financial context of attention or curiosity.  I suspect that was intentional. 

If my tokenomics and economy calculation are good then the interest isn't much for those holders who hasn't large Bitcoin in their wallets, also I don't think this is even a thing people are excited about or are interested in, this won't even entice me to keep my cryptos in exchanges even if I were to be a whale holder. But if after  your research you think you interested in the interest you would get from holding/staking your Bitcoin or crypto-currency through that means then Good luck.

Yes, they are offering much higher interest compared to related fiat products but the difference is that most of these fiat products are, as you've said, insured. There is low interest but there is also lower risk. Crypto staking products offer higher APY but the risk is also higher.

I don't use it so I wouldn't also recommend it to other people. What I recommend is to choose Bitcoin and perhaps a handful of very solid altcoins and keep them yourself and away from the control of anybody. But should you decide to invest on them, just make a moderate investment, an amount you could easily forget should it end up the way you wouldn't wish to.

As everyone has said sending Bitcoin or altcoin to an address which you can access
but some other party has control of is never a good idea but I am one who is taking that
risk and have been for a number of months now on the BlockFi platform. I have a small
portion of my holding on deposit there earning interest.

The deposit im aware that I dont have control over, meaning if the platform is
hacked, or if they decide to lock me out, there is very little I can do.

So along with the reward there is also risk.

I don't think stashing your bitcoin is a great idea. Putting your coins in a stash means giving up your ownership and custody over it because you permit the exchangers to have the authority over your funds. Hence, when hacking happens, your assets aren't safe. There are numerous incidents of hacking already reported with these exchangers and wallets. I suggest to be wary and always double-check where you are putting your hard-earned money/coins because it's not easy to make money nowadays. Reassess if the risk that comes along with stashing your money is worth it or not. For the interest that they will give you, will it be okay to put your funds just for the sake of having your money grow with them? If yes, then go ahead. After all, there are several exchangers that offer pretty much decent interest over time. If not, then don't do it. It still all depends on you.

Op, consider it carefully before taking part in such things. There's always a risk when you're staking your coins because it means that you're giving some other party the keys. Then comes the concern over it being worth it in terms of profit. How much will this staking give you annually? 5%, maybe 10% if it's a very good deal? Well, Bitcoin can go 10% up or down in a matter of days. So aren't you better off simply hodling your BTC independently because this change is quite insignificant compared to volatility? You can also try to follow cycles with these 10% increases and sell the excess for fiat or a stable coin on an exchange.

The interest is usually not much. It goes from about six percent (6%) per annum and above in some platforms. It’s not really bad, it is up to you whether you’re going to like it or not. If you see a good platform that you can use for it, then you can do it. The good thing about the exchanges that I am using for staking is that you can withdraw your staked assets at anytime, that’s good thing. It is not the type where your assets gets locked for like a year and if you changed your mind you wouldn’t be able to withdraw it. It’s not bad if you’re making extra 6% and above on your assets.

Cant trust up that much and even they would say 6-10% interest per year and the same locked in period then I wouldn't really be tending or risking out to those platforms no matter how well known or popular they would be.

Just like others been saying is that interest in the essence of price volatility would be much more worth I could say because we know on how Bitcoin do able
to move after a year.

It could neither be doubled or at least 30-70% in a year or not known as always.

I don't earn any interest on my crypto assets and I was never interested in such stuff owing to the extreme volatility of the cryptocurrency market. I don't think it's worth investing in any sort of schemes that offer interest on crypto assets.

Instead, it would be better to depend on FIAT interest schemes since FIAT currencies are far less volatile both in the short-term as well as the long-term.

Bitcoin is the prime/master currency of the crypto market. So always stay safe while dealing with Bitcoin transactions.

But if looking for yield or interest on Bitcoin, then it is not that convenient or profitable solution to date.

Rather than swapping Bitcoin to other chain tokens, majorly Ethereum chain tokens can give some sort of boost on earning.

Currently, Yield farming, LP Mining, Staking, Minting are majorly supported Ethereum Chain including forks and Layered Solutions such as Binance Smart Chain, Polygon, Fantom etc.

Investing in new projects including ICO, and IDO can also give profit in a short duration, but require patience.

I've always thought that a asset which is likely to appreciate in value is always better than earning interest on a depreciating currency i.e I would much rather have my money stored in Bitcoin which I believe will only increase in the future, and will escape the drawbacks of keeping your money in fiat. For example, escaping the natural inflation which is associated with holding fiat currencies for a long time.

Not completely accurate since banks get bailed out all the time, though you're right that's usually through government intervention, which would presumably be funded via tax. So, you might be partly right, though there are definitely banks which have gone under without being saved, and we'll likely see this in the future too. In fact, it's one of the reasons why Bitcoin was created, because of the failings of the banking system which resulted in multi millions/billions in bailouts.

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Not a bad idea but I don't choose to get with those interest rates for holding bitcoin. I'm good as I'm the one holding it and not any platform that would take more than the interest that they'll give to me. I feel secured and better if it's on my wallet and I'm the one who has the private keys on it. The growth in value of bitcoin is already good to me, so whenever the price goes up, that's the already the reward for me and for the others too.

Majority would really be having the same mindset when it comes to this interest or staking on where it is much better if they do held off their coins on their own wallet rather than entrusting those coins on a platform just for you to earn small interest.

I feel secured too when you do know that you do possess the private keys of that wallet on where your coins been stored.You could sleep confidently
without worrying on something like that.

Basing with the risk is something depending on someones preference so its up all to you.

Correct me if i'm wrong but i think my friend once told to me that we can stake USDT to Binance, but if it is wrong then i missheard it. With USDT i think the only problem that we can face is security of the exchange or our own account. About price, maybe stable coin can help the price at least not dumped.

No doubt exchanges are under the top priority of hacks.

If you want a safer option, there are custodial wallets which offer much better rates for USDT/ stablecoins than most exchanges such as Binance. We're talking ~10% APY.

I personally don't'. I've profited more than enough by taking advantage of the BItcoin's naturally increasing price over time, so I didn't think that I'd still need to stake my coin. Not to mention as others have said, the threat of your assets not being on your own care is enough to actually consider why you shouldn't actually stake your coins. If we were talking about solely staking, I'd go for something else instead of Bitcoin. Bitcoin price volatility is enough to profit, and that little profit you can get from staking it isn't enough imo.

You are not wrong. Your friend says the truth about staking USDT in Binance so you can earn some rewards, especially if you use more than $100 on the stake.

If you take a look at Binance in Flexible Saving, with only $5, you can earn interest for about $0.0013699 per day, so that can be good enough to earn the interest if you do not want to use your USDT to trade.

Everything you do will have a risk so you need to know the risk first before you decide. Binance gives you many coins to stake to earn the interest, so that will be up to you.

It is the best option for those who wanted to earn money while holding. Of course, it was found to be risky on their side knowing that they lose full control of it but as they use reputed exchanges like Binance, that is something different.

Maybe you are talking about trading and since you know how to trade, this staking isn't necessary for you then. Even me, I'd rather focus on trading as it was possible we may gain more compared to staking. However, not all are good at trading and so it gives them an option to just stake.

the only LEGIT 'interest' is in the PoS coins where custodians merge many users value into large addresses to stake coins for PoS block rewards.

however PoW coins like bitcoin do not earn interest. they are usually put into custodians trust and that custodian then does trades using users coins HOPING for profit. but this is not legit or guaranteed. and expect losses

in both cases giving funds to an exchange long term can put your funds at risk. not just at a bad trade the custodian does but also the custodian doing an MTGOX on its users. or like the other exchanges done with their 'we been hacked' retirement plans for themselves

dont trust any exchange offering money for nothing. if they could make money for nothing.. they would not need yours, they would be self profiting.
if they could make money why would they give it away

if its too good to be true.. its not

I don’t personally earn any interest on the bitcoin I own, but outside of it I do own a little bit of DeFi stuff where I’m staking am making a modest interest return. You must be careful when it comes to these, many are scams and completely unsustainable.

No. Whatever I keep on my stash, I just keep adding more and more. The 'interest' that it accrues is solely based off of bitcoin's current valuation versus its price when I first stashed them, and to me that is more than enough. I've profited a lot this way for how many times already, and it still works with minimal effort—you just have to make sure that your wallet is safe and secure enough and you're golden.

You can earn interest by letting exchanges use your coins for liquidity, but I would go against it as the exchange's security may be compromised and they may not be able to reimburse your coins in the event of a hack

Yes, it's all up to us. But the way you keep your bitcoins is much more of a priority than to look at those percentage that you'll gain. The profit you'll get in staking is also available by just holding it.
People tend to have the little percentage gain plus the value going up and it's a win for them. But for us, we're already good holding it and we're enjoying looking at the price increases of bitcoin.

I think they’re both quite the same, because the interest on the staking you will be doing will be from around 6% to 20% per annum. That’s pretty much the same thing with FDIC insured investments, because the interest usually goes from around the same 6%, 12%, and I have seen a few that are up to 20%.

The only difference is now going to be that cryptocurrency assets have a high level of fluctuation, and that will make it too be more able to bring profit then the regular investment. If you should stake your money in any cryptocurrency, there is a high chance that before the end of the year when you will be getting that profit, or interest, the price of the crypto currency might as well increase which means more profits in return.

No because I want to keep my bitcoin forever and not risk losing them. Bitcoin will continue to grow in purchasing power over the years and decades, I'm happy with that. So I will be storing them on my Trezor instead of on an exchange earning interest.

No way. Bitcoin is already profitable enough, or at least has been so far, to risk losing it for a few percent more. I prefer to have my keys and a long-term investment vision, doing DCA, and forgetting about other returns.

Couldn't agree more with this. Sure, 8% sounds like a heck lot of interest, but people really underestimate the security (or lack of it) at all these interest or yield farm shit.

If it's centralized, take a look at Celcius and see how much they lost, with CEO being so dumb to use Metamask with millions of customer funds.

DEX is no better, Defi hacks are rampant.

Risk 100% for 8% or less? No brainer NO for me.