[Updated] Choices for earning BTC interest

[SueGiant]

So is it advisable if I invest my coins to a bitcoin betting site?

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[btcduke]

A friend of mine told me he has more than 20 BTCs in Chinese exchanges to earn interest.

Anyone else have tried their service?

[IIOII]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

[fa]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

Apart from reasons posted by others previously, I think another sound reason is that if the company behind these websites are big and have enough money to burn, they might just want to gain more attraction and users. This is like what many B2C, SNS and IM service providers did when they were in early stages. You might once asked yourself, why are they selling at such a low price, not even covering manufacturing cost?
Loyal users are the most valuable asset to any website/company. When Internet started, the number of clicks is what every website craved for. It is still true now. More loyal users means more trust, reputation, traffic, and eventually more money.

Bitcoin in China is new. But the competition here is fierce.

An early and strong start means huge advantage. Just plain old Matthew Effect.

Take Jua.com for example, the company that owns Jua.com has ChBTC.com (ChinaBTC Exchange),  BW.com (cloud mining) and 8R.com (P2P lending based on BTC mortgage) behind it. BTW, I think those domain names alone cost a fortune. JUA users are more likely to use these services over others just because of trust and convenience. 

Yes, giving away BTC as interest is a loss of money in the short term. But in the long run, it is hard to say.
If Bitcoin turns out to be a business of decades or even hundreds, this move of offering interest is a brilliant strategy to boost user number and gain reputation, as long as the company behind it is not just scam. This is the homework you should do.

Consider Youtube's counterpart in China Youku.com, Twitter' s counterpart weibo.com, and Amazon's counterpart JD.com. These are already very big brands in China for years, and they are still burning VC money and struggle to seize users and the market. I don't think currently there remains much opportunity for new starters to build anything like Youku / Weibo / JD in China and succeed. Admittedly it is still possible, but it's extremely unlikely to happen.

Additionally, more coins deposited means less coins dumped into exchanges and shorting leverage, which will contribute positively to btc price. Believers and HODLers will surely benefit from this.

So personally I think this way of gaining new users by offering interest is both understandable and justifiable.

[btcduke]

So is it advisable if I invest my coins to a bitcoin betting site?

Define invest. If its pure gambling the coins... then not.

[sidhujag]

If you hold bitcoins dont give them to exchanges or people to earn interest its a scam.

If you want to earn interest you can buy bitbtc using bitshares its decentralized so you hold your keys. You earn interest the longer you hold the more lucrative and you can always go back to btc

[santaClause]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

Bitcoin is inflationary as additional bitcoin is created every 10 minutes and will continue to be inflationary for a good ~100 years (depending on how quickly the difficulty rises).

The reason that banks are able to pay interest on deposits is because they are able to invest a percentage of deposits in loans to other customers and has nothing to do with the positive level of inflation

[sidhujag]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

Bitcoin is inflationary as additional bitcoin is created every 10 minutes and will continue to be inflationary for a good ~100 years (depending on how quickly the difficulty rises).

The reason that banks are able to pay interest on deposits is because they are able to invest a percentage of deposits in loans to other customers and has nothing to do with the positive level of inflation

I dont think you get how it works.. in the end you have to inflate.. you are creating IOUs for future work.. future work will be paid by future labour, thus creating inflationary environment.

Getting rid of IOUs will mean you pay for what is needed now, thus it is priced in NOW instead of later. Is it a good thing? Might set us back 10 or so years to start, but in the long run certainly more stable option...

[santaClause]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

Bitcoin is inflationary as additional bitcoin is created every 10 minutes and will continue to be inflationary for a good ~100 years (depending on how quickly the difficulty rises).

The reason that banks are able to pay interest on deposits is because they are able to invest a percentage of deposits in loans to other customers and has nothing to do with the positive level of inflation

I dont think you get how it works.. in the end you have to inflate.. you are creating IOUs for future work.. future work will be paid by future labour, thus creating inflationary environment.

Getting rid of IOUs will mean you pay for what is needed now, thus it is priced in NOW instead of later. Is it a good thing? Might set us back 10 or so years to start, but in the long run certainly more stable option...

The rout cause of inflation is a higher amount of money supply in the economy (although this does not always cause inflation). If there are more bitcoin available to be spent then there is a chance that inflation will occur.

The fact that people are able to receive work in exchange for work later does not in itself cause inflation, plus loans are available in the bitcoin world although the lending market is much less efficient then the fiat based lending market

[sidhujag]

The whole concept of interest makes only sense if you have an inflationary currency. Bitcoin has a fixed maximum monetary supply. So it's wrong to expect interest, unless you assume that fractional reserve banking (essentially fraud) is taking place.

Therefore I advise caution when someone offers interest on Bitcoin deposits without offering a plausible explanation. Why do these exchanges offer interest? Why do they need more deposits?

Bitcoin is inflationary as additional bitcoin is created every 10 minutes and will continue to be inflationary for a good ~100 years (depending on how quickly the difficulty rises).

The reason that banks are able to pay interest on deposits is because they are able to invest a percentage of deposits in loans to other customers and has nothing to do with the positive level of inflation

I dont think you get how it works.. in the end you have to inflate.. you are creating IOUs for future work.. future work will be paid by future labour, thus creating inflationary environment.

Getting rid of IOUs will mean you pay for what is needed now, thus it is priced in NOW instead of later. Is it a good thing? Might set us back 10 or so years to start, but in the long run certainly more stable option...

The rout cause of inflation is a higher amount of money supply in the economy (although this does not always cause inflation). If there are more bitcoin available to be spent then there is a chance that inflation will occur.

The fact that people are able to receive work in exchange for work later does not in itself cause inflation, plus loans are available in the bitcoin world although the lending market is much less efficient then the fiat based lending market

The borrowing rate for banks is different than the borrowing rate for you and me.. thus banks make the difference.. higher inflation will affect rates thus affect lending rates.

Bitcoin supply is consistent and known but fiat supply is not thus makes for a more less stable environment. The money velocity is used to understand fair market value of the currency based on supply metrics. Based on bitcoin and its volume sold on exchange looks fairly undervalued here.

And its not wrong to expect interest with bitcoin because bitBTC in bitshares makes it possible without any fractional lending or gimmicks.. its just the fees that are accrued over time are paid in interest to holders of assets like bitBTC about 15% per year currently.

Interest on deposits today and crypto interest are totally different.

[bl4kjaguar]

plus loans are available in the bitcoin world although the lending market is much less efficient then the fiat based lending market

These two lending markets are not comparable since BANKS DO NOT LOAN OUT RESERVES.

Furthermore, all bank notes are not actually money.

The people are the sponsors of all the money of the society.

The real culprit in inflation is an unconstrained central bank. Since central banks are created or enabled by governments, the real culprit in inflation is government. In turn, inflation cannot be controlled unless proper government, which really means proper law, is instituted and respected.

[CryptoCarmen]

So is it advisable if I invest my coins to a bitcoin betting site?

yes bet all in.

[gigEls]

Interest would be nice!

[ondratra]

Imho those companies are lending these coins themself - for example for margin traders.

[troy112]

Why do you think they are keeping the bitcoins/ burning them for publicity or anything.
If you take a guess, they might be investing with your bitcoin and earning more than they are paying you. Don't you think return more than 10% is possible if you invest carefully.
They even have advantage, they can use bitcoins as they like and don't have to fill any obligations or govt. Regulations.

[Billyboy402]

there alot opf shit talk here , but for any one in the future reading this

atm

BTER.com and MCXnow.com both offer interest on deposit (1%)
it a marking to get user to use their site. they pay a small amount of interest from the fees the exchange make

other then that , you will have to hold POS coin 

[sidhujag]

there alot opf shit talk here , but for any one in the future reading this

atm

BTER.com and MCXnow.com both offer interest on deposit (1%)
it a marking to get user to use their site. they pay a small amount of interest from the fees the exchange make

other then that , you will have to hold POS coin 

Bitusd is the only real choice... And mcxnow.com is not good right now

[Billyboy402]

there alot opf shit talk here , but for any one in the future reading this

atm

BTER.com and MCXnow.com both offer interest on deposit (1%)
it a marking to get user to use their site. they pay a small amount of interest from the fees the exchange make

other then that , you will have to hold POS coin 

Bitusd is the only real choice... And mcxnow.com is not good right now

thanks for pushing more personal view and bullshit ..... BitUSD is not a exchange or bank that pay ...... it just another investment you have to buy into

yes mcxnow has close down , but bter still pay interest on BTC and a few other coins 

[Bizmark13]

While the idea seems nice, I'm not sure if it is actually a smart one. By sending your bitcoins to such a site, you are betting against the possibility that they will not get hacked, "hacked", or turn out to be a scam. I'm not sure if taking such a big risk would be worth it for just a ~10 percent annual gain. If the site disappears with all of its users' funds, then you will lose 100 percent of your initial deposit.

Also, doesn't Bter also offer interest for Bitcoin and altcoins as well? I've never heard of all those other sites mentioned in the OP before but I think Bter is quite trustworthy. That doesn't mean they can't get hacked though. And there is still a non-zero percent chance that they could suddenly disappear without a trace. Heck, I remember when they nearly went bankrupt when a hacker made off with 50 million NXT a couple of months ago. It could happen again.

(That being said, I might put a small fraction of my bitcoins into such sites just for fun. But I definitely wouldn't recommend investing all of your bitcoins there.)

[fenican]

Bitcoin transactions are NOT reversible. When you send coins to an obscure third party to earn "interest", the following risks are all present:

1. They will shut down and disappear with your principal
2. They will slow-pay or no-pay your withdrawals
3. They will get hacked, or claim to have been hacked, and lose all your coins

Also have to ask yourself how any site can fund unrealistic rates (i.e. 2.5% per month) without running a pyramid. Do they have a magic cash machine? Probably not.