Loans at Cryptocurrency, that's something different. If everything at Cryptocurrency is all about making sure that you can earn as much money as possible, this is just different. Cryptocurrency does not have the ambition to act as a bank, but more and more financial services are being rolled out. And what exactly is such a service for which you go to the bank? Exactly, a loan.
Do not think of amounts such as a mortgage application or when you plan to finally get that private plane on the head, but the amounts can still add up. Today we enthusiastically present the following manual in the Cryptocurrency series: Crypto Loans at its best. So this moment is perfect for getting some extra crypto knowledge in your head. Sit back and enjoy.
What exactly are Crypto Loans?
Not long ago, Cryptocurrency had a module they called 'Cryptocurrency Lending'. In the meantime, this module has been changed in name to Cryptocurrency Savings, because it concerns crypto that you can lend to third parties, while you can then earn interest on it.
What is Trading?
Trading is actually the module for which everyone first visited Cryptocurrency and the reason why Cryptocurrency ever started with Cryptocurrency. Trading is simply the entire cryptocurrency trade. You can buy and sell cryptocurrencies on Cryptocurrency and earn or lose a lot of money from that trade. Depending on your skills and luck factor of course the Bitcoin Dealers will be able to provide you the best information on the same.
What is Margin Trading?
Margin Trading is very similar to ordinary trading on Cryptocurrency. The big difference is that with borrowed money you get a number of interesting additional functions such as leverage. Margin Trading is ideally suited for the more experienced trader.
What is Saving?
Saving is comparable to bank savings. You deposit your cryptocurrency in one of Cryptocurrency's savings accounts and you receive interest on the amount invested. Depending on the investment period, variable or fixed and which type of crypto you invest, the interest rate is determined and you can therefore earn a nice bit extra on your 'savings crypto'.
What is Strike?
Staking is the holding of crypto in your own wallet, so that it can be used in a joint pool to maintain a Proof-of-Stake block chain. You will receive a small fee for this, but the crypto will remain in your own possession in the meantime. The more crypto you hold, the greater the fee.
How Do Crypto Loans Work At Cryptocurrency?
Well, now that everything is crystal clear and you know more about Cryptocurrency than Cryptocurrency itself, it is time to take a closer look at the Crypto Loans or 'the loans'. The whole concept of borrowing, of course, remains simple. You want to borrow a little bit of money (or crypto in this case), so you apply for a loan. Depending on the quantity, the period and your risk profile, you have to pay a certain interest. A number of basic principles are usually used for this:
· The shorter the loan period, the lower the interest rate in percentage.
· The larger the amount, the lower the interest rate in percentage.
· The more uncertain your risk profile, the higher the interest rate in percentage.
After all, borrowing is all about risk. It is up to a lender to estimate the probability that he will ever see the loan amount or cryptos again. That is why, by definition, loans are accompanied by a form of collateral, just as a home is used as collateral for a mortgage. If something goes wrong, the bank can still sell your house, even if that is a last resort.