Delta Financial Offers Interest-Bearing Bitcoin Accounts

[DannyElfman]

5% does not seem like an outlandish figure. The fact that they are paying out 5% in and of itself does not raise my suspicion.

That said, there is always counterparty risk and security risk. Judging from the tech background of the founders, I would perhaps be less wary of security risk and more wary that some HFT's or other whales find a way to game their platform and leave them insolvent.

I put a teeny bit in there that I can afford to lose.

Would be nice if BTC becomes accepted by a major brokerage that will allow people to trade on margin against it and perhaps buy dividend paying stocks. I called interactive brokers, no dice. Maybe this conversation could be a catalyst for pressuring some of these brokers to do that....

(which they probably won't until the regulatory framework improves-- but it can't hurt to try)

my two cents

If they are paying 5% then at a minimum they will need to earn 5% on the bitcoin you give (lend) them plus their expenses. With current interest rates that is simply too much to earn on investments that must be liquid enough to satisfy demands for payment from investors. 

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[franky1]

5% is requiring that they find for instance a sell price of bitcoins of $610, and a buy price of bitcoins of ~ $578 once a day. and that there is enough volume to sell to not cause a tank before its sold. and enough volume to buy to not cause a rise before its bought.
because 5% is a $31.20 price difference once you account for trade fees (based on 60c buy 60c (0.15% per trade))

even if we broke it down to not just 1 buy and sell per day, but lets say 1% profit per trade 5 times a day ($6 profit + same $1.20 fees) means movements of atleast $7.20 need to be held with enough volume to support the price for all investments to transact before it tanks. then buying back in with enough volume to support the buys to ensure they get that $7.20 cheaper price before it rises.

i have personally done this before on a few exchanges. once you start handling more then 10bitcoins prices move, i have played around with 500 coins and seen the price move alot. so saying it is possible and in someways guaranteed... is a lie.

just 20 coins would make the price on either bitstamp or btc-e move $2 in the wrong direction as there is no price support. meaning the 1st coin thy want to sell will b sold at $2 cheaper then the first coin. meaning if they were playing with just 300 bitcoins (not thousands just 300) by the time they have sold all 300 the price would have tanked and would then need to then wait for a further price drop to then have an oppertunity to buy in for their 5% profit.. its unsustainable 

and going back to why i think not only the financials are fishy, but the website itself.. i thought i recognized the cheap template they used..
http://bit.coin.je/ use the same cheap template too..

too many things have put the hairs on the back of my neck up, about this website.. i wont shout scam,.. but fishy is definitely a good word for it

[daviducsb]

I'm not necessarily out to defend these guys but the 5% they are paying is from margin loans others take to borrow bitcoin, "they" are not paying it like a bank would, so that comparison is not apt.

5% does not seem like an outlandish figure. The fact that they are paying out 5% in and of itself does not raise my suspicion.

That said, there is always counterparty risk and security risk. Judging from the tech background of the founders, I would perhaps be less wary of security risk and more wary that some HFT's or other whales find a way to game their platform and leave them insolvent.

I put a teeny bit in there that I can afford to lose.

Would be nice if BTC becomes accepted by a major brokerage that will allow people to trade on margin against it and perhaps buy dividend paying stocks. I called interactive brokers, no dice. Maybe this conversation could be a catalyst for pressuring some of these brokers to do that....

(which they probably won't until the regulatory framework improves-- but it can't hurt to try)

my two cents

If they are paying 5% then at a minimum they will need to earn 5% on the bitcoin you give (lend) them plus their expenses. With current interest rates that is simply too much to earn on investments that must be liquid enough to satisfy demands for payment from investors. 

[daviducsb]

I never said we need a regulatory framework, I implied that there will be more MAJOR BROKERAGES accepting bitcoin as collateral when the regulatory framework improves. This is common sense, matter of fact stuff.

There will always be a parallel bitcoin infrastructure but it will not involve MAJOR BROKERAGES, who will probably not accept bitcoin until there is more clarity re. regulations and so on.

5% does not seem like an outlandish figure. The fact that they are paying out 5% in and of itself does not raise my suspicion.

That said, there is always counterparty risk and security risk. Judging from the tech background of the founders, I would perhaps be less wary of security risk and more wary that some HFT's or other whales find a way to game their platform and leave them insolvent.

I put a teeny bit in there that I can afford to lose.

Would be nice if BTC becomes accepted by a major brokerage that will allow people to trade on margin against it and perhaps buy dividend paying stocks. I called interactive brokers, no dice. Maybe this conversation could be a catalyst for pressuring some of these brokers to do that....

(which they probably won't until the regulatory framework improves-- but it can't hurt to try)

my two cents

We don't need "regulatory framework." Why does everyone think bit coin needs permission? If you mess with fiat you have to follow regulations from the government that issues it, no government issues bit coin so no government regulations need to be applied. 

[drason]

To test the water, I put a small amount into BTC Interest account on June 19. Daily interests have been paid as promised. A few days ago, I moved the fund from BTC Interest account to BTC Primary account, and tried to withdraw. Then I got "incorrectly credentials"  error.  I have two-factor enabled on the account. I am sure I have entered the two-factor code correctly. I have send support an email and waiting for their reply. I will update here as things unfold.

[jjc326]

ANY company which pays INTEREST on bitcoin deposits is a FRAUD

Pure and simple!

Is this true? I could see a bitcoin "bank" offering a standard low rate and being fine. If it loaned the BTC out at a higher rate then the bank could make profit and pay interest. I'm talking like 1 percent in the current environment.

[heunland]

I put a small amount of BTC to try out btcdelta´s interest earning feature. I have received the interest on my deposit as promised, every day, since june 18. Also I have been able to move some BTC from interest to primary account and withdraw from there to one of my personal Bitcoin addresses outside of btcdelta, without any problem or delay. I have made several suggestion to customer support and they have been very prompt responding to my input. They already fixed a minor problem with their interest reporting I had pointed out to them. So far I am happy with this service, but of course only time will tell if this actually can work in the long run and I am not going to put a lot of my funds into this right now.

[Divinespark]

I can see the appeal but I would be terrified of abrogating control of my coins to a centralised system
What kind of security practices will they have in place?