Interview with Devon Dyrdahl, marketing manager of Btcpop. In this interview Devon reviews Btcpop and we explore in detail all the passive income opportunities on this crypto financial platform.
Can you introduce yourself?
My name is Devon Dyrdahl and I have been working on marketing for Btcpop.co for the last 2 years in marketing. I discovered Bitcoin and Btcpop when researching new peer-to-peer industries, particularly P2P lending and investing. As fiat is restricted to only accredited investors, I was excited to find open access Bitcoin lending at Btcjam and Btcpop. I signed up for Btcpop in early 2015 and been a daily user ever since. So I have seen the company change first hand. In April of 2017 I volunteered on chat to write some blog content, and soon after that joined the team on a permanent basis.
What is the history of the BTC PoP?
Btcpop has a very rich and interesting history for only being around 4 years old. Lots of good, and some not so good.
Old management created and grew Btcpop from nothing to 40k users in a little more than a year. Btcpop was founded on the idea of making P2P Bitcoin lending better, creating a free lending market with far less restrictions than leading websites at the time Btcjam and BitcoinLendingClub. This was largely successful at first, as a good community of borrowers and lenders migrated to Btcpop from these platforms for the better terms and rates.
Then in late 2015/early 2016 as suddenly as the P2P Bitcoin lending industry emerged, it collapsed. The collapse was due to many factors including; regulation, false identification, liquidated traders, ponzi scheme borrowers and more. The straw that broke the camel’s back was Bitcoin’s price nearly tripling from $200 range to the $600+ range causing massive defaults across the industry. As many Bitcoin borrowers at the time sold their Bitcoin for fiat, and couldn’t or wouldn’t pay back the Bitcoin with the dramatic price increase.
Btcpop, on the outside, appeared to escape the ill fate of its competitors. While it still suffered massive defaults, features such as insurance and collateral looked to enable borrowers and lenders to fair better than other platforms at least. However, the inner workings of Btcpop were broken, as in the pursuit of growth careless coding and feature implementation had unleashed a host of exploitable bugs and the team was quickly in over their heads. Instead of being upfront about the issues, old management swept problems under the rug and made matters worse borrowing more BTC and running the Altcoin exchange via fractional reserve. Then as the price raised management, pulled the equivalent of a ponzi exit scheme, selling the tattered website as functional to the current owner, who was the websites largest and most important user.
On June 19th 2016, Btcpop’s new owner, who is best known as user @Casimir1904, took over. Very quickly the ponzi exit was discovered with missing balances, missing altcoins, and a -100 BTC balance in the insurance fund. This was along with a host of other issues and a backlog of support tickets.
In an integrity move, the first thing new ownership did was found missing balances and altcoins at his own expense. No losses were shared, no long process sueing old ownership was undertaken. This very significant investment was made to keep existing users around and Btcpop running, when in reality it probably should have went bankrupt. Since that day, Btcpop has been fully funded with more than enough BTC funds to cover user balances being openly disclosed in a signed coldwallet address.
After the takeover, the first year was used to repair the current website and get existing features in working order, which continues to be an ongoing process. In 2018 it was decided that Btcpop would recode its entire website and launch new with improved functionality, UI, and a new exchange for our 250k registered users. This website re-code is still being done at this time, but the current website remains functional and growing as it is with existing features.
What are the core functionalities of BTC POP?
Borrow/Lend Bitcoin (other cryptocurrencies/stablecoins planned in the future) in an open market platform with peers around the world using altcoins as collateral to substitute or supplement reputation. (Explainer video)
Our exchange unofficially called “The Staking Exchange” is quickly becoming a core aspect of Btcpop.co. Its main differentiation point is that all proof of stake coins are automatically staked for users and rewards distributed for all deposits in the platform.
Behind “The Staking Exchange” is Btcpop’s staking pool infrastructure which pools all POS coin balances and stakes them from 1 wallet. This leads to getting smaller staking rewards much more frequently. For many coins the compounding effect more than pays for Btcpop’s fee of 2% of staking rewards.
To help new users get started with proof of stake coins Btcpop has integrated a 100+ altcoin faucet into its platform. The faucet pays out the 2% staking reward fee + any donations to the faucet.
Instant Loans and Instant (Savings) Account
Complementing the main P2P loan function of Btcpop is the instant loans feature. Here, instead of borrowing from peers, borrowers can borrow Bitcoin instantly at set terms or collateral requirements from Btcpop itself. To back these loans users can deposit into Btcpop’s risk free savings account named “Instant Account”. This account pays out interest from these Instant Loans and is effectively risk free as Btcpop holds the loan risk, but pays out the interest. Effectively making it a variable interest savings account for depositors who can deposit/withdraw anytime. (link to explainer video)
Btcpop runs a cloud mining facility in Icleand and offers contracts from that facility to its users. Btcpop also offers scrypt contracts from a mining facility in Texas. (this service may be discontinued)
Bonds, IPO’s, and P2P Shares
Expanding on the idea of P2P loans. Btcpop offers alternative financing in the form of P2P bonds or shares. Bonds enable users the flexibility and structure of bond financing, at a small P2P scale. And P2P shares enable users to issue globally trade-able shares via an IPO within the platform. Users can also issue existing private shares on Btcpop in order to utilize Btcpop’s exchange and dividend paying functionality. And all shareholders get the ability to use those shares as collateral for P2P loans.
What are BTC POPs strengths compared to other exchanges?
Btcpop’s obvious strength is its staking infrastructure. Earning staking rewards on balances or even open sell orders is advantageous for POS(proof of stake) coin traders. Anyone who stakes their own coins knows doing it themselves for multiple coins is no easy or cheap process. The faucet also brings awareness to these small cap proof of stake coins and some liquidity within the exchange.
Another strengths is Btcpop’s robust and mostly automated wallet system, enabling it to list and manage many different cryptocurrencies in a secure low maintenance way. This enables Btcpop to have some of the lowest listing and withdrawal fees of any exchange, as well as support for many low cap cryptocurrencies. In the future when Btcpop’s exchange is updated with API, a new trading engine, and brand new user interface it plans to be fully competitive with all other cryptocurrency exchanges.
What are the ways to make Passive Income on BTC POP?
There are many ways to make passive income on Btcpop!
- Staking: Own some POS coins? Deposit them at Btcpop and they will automatically be staked for you, just watch your balance grow. They will even earn staking rewards as sell orders or as collateral for BTC loans.
- Investing in P2P loans + Bonds: While I would categorize this more as active rather than passive income. If done with some simple rules, or only on 100%+ collateralized loans, investing in P2P loans or bonds can be a easy, enjoyable, and profitable endeavor.
- Instant (Savings) Account: This is by far the easiest and lowest risk to way to earn, as Btcpop takes on the loan risk for you. Simply deposit BTC and forget about it. As other users take out and repay instant BTC loans you will receive small portions of the interest payments and up to a historic 3-15% APR. You are able to deposit withdrawal from this account anytime without fees or restrictions.
- Dividend Paying Shares: In most cases shares are as high or higher risk than P2P loans/Bonds so be careful. But a fun way to earn is to simply hold or trade dividend paying P2P shares.
- Cloud Mining: While Cloud mining hasn’t been profitable lately. Historically cloud mining has paid out great returns and Btcpop offers a secure competitive mining contract, which are planned to be tradable sometime in the future.
- Faucet and Referrals: Claim free altcoins yourself every 30 min from Btcpop’s faucets. While it may not seem like much, the coins add up, and over time even accrue staking rewards. If you don’t have time to claim for yourself, Btcpop’s referral program pays a 25% bonus of all altcoin claims made by your referrals, which grows your altcoin balances without any claiming at all. Btcpop’s affiliate program also pays back a portion of referrals repaid loans.
Can you tell us more about staking wallets? How do they work?
Staking wallets are very similar to any other cryptocurrency wallet besides the staking feature. Proof of Stake is a consensus engine like Bitcoin’s proof of work, but instead of computers burning electricity hashing, proof of stake uses incentives and disincentives to achieve the same distributed consensus. When you stake in a wallet, you lock up some coins as collateral that you will be a trustworthy node to truthfully validate transactions. If you validate transactions correctly (like Bitcoin miners) you get rewarded with new coins and fees. But If you attack the network, you lose the coins you put up for stake. (Link to Proof of Stake Explainer video)
At Btcpop, using our proof of stake wallets is no different than using any other exchange wallet. Once you have an account, all you need to do is deposit and watch the staking rewards roll in.
There is the option to Deposit Bitcoin and earn interest on BTC POP correct?
Yes, This is Btcpop’s “Instant Account” which behaves very much like a savings account except there is no set interest rate, as that depends on people taking out and repaying instant loans.
All you need to do is deposit BTC from your main account to the “Instant Account”. Btcpop itself funds the Instant loans and takes on repayment risk itself. But it pays the interest to depositors in the Instant Account. So as other users take out and repay instant loans you will receive small portions of the interest payments and up to a historic 3-15% APR overtime. You are able deposit/withdrawal from the Instant Account anytime with no fees or restrictions. (explainer video)
How does BTC POP Lending work for the lenders?
Btcpop is simply a platform for borrowers and lenders to meet and do business. Btcpop only charges borrowers a 1% loan listing fee, and works to provide them with the best tools possible (verification, collateral, insurance, ect) so they can create a proposal strong enough that investors choose to invest in and fund their loan.
P2P Investors/lenders are completely in control of their money 100% of the time. So, consequently they are also 100% responsible for their investments. Btcpop prides itself on its free-market open nature, but that also means investors must make investment decisions themselves. For doing this, investors earn 100% of the interest on P2P loans, but they also take on all of the risk. Investors are currently not required to to do any type of verification.
The process for borrowers is also pretty easy. Unless borrowers are taking out a instant collateral loan, they must first verify. Verification is similar to every other cryptocurrency platform with KYC ( ID verification, proof of address, cellphone #, ect) except at Btcpop all users must receive a verification code in the mail. This costs postage in BTC/BCH (around $2.71) and takes as long as a normal letter in your area.
Once verified borrowers are free to create whatever loan proposals they want. Borrowers get to choose their loans length, interest rate, insurance, collateral, and even repayment schedule. But, just because they can list whatever terms they want, doesn’t mean their loan proposal will be funded. Btcpop provides some guidelines on how to get a Bitcoin loan, but in the end the market decides what terms it finds acceptable for the borrower by either funding or not funding their loan request. Borrowers are able to get much larger loan proposals funded quickly by using 100%+ of altcoins or P2P shares as collateral.
Borrowers also have a selection of loan types the can choose from. They can take an instant loan at set terms, List a completely customizable P2P loan on the market, Or even issue P2P Bonds. Btcpop’s existing users and staff are more than helpful in helping borrowers adjust their listings if they are asking for too much, and borrowers will be surprised how fast their listing funds if they ask too little.
Is there an automated lending system to diversify within loans?
Diversification is highly highly recommended strategy for all investors at Btcpop, but there is no automated lending system to do that. Nor are there plans for one until one of high enough quality one can be built. In the past other platforms created these rating based systems, but they have proven to be easily fallible and have lost users many BTC.
Btcpop encourages an active, highly critical, and diversified investment strategy for P2P Bitcoin loans. This has been beneficial as every loan is heavily scrutinized by the investor community and has prevented many scams or bad loans from being funded in the first place. Automated systems are much less critical and more easily fooled.
What is the rate of defaults? How are the defaults managed?
While I don’t have the exact number, about 6 months ago when it was calculated, defaults under new ownership were down to around 5%. Prior to new ownership they were as high as 20% for some periods of time.
Btcpop’s current philosophy is all about preventing defaults before they happen, and it has been far more successful than any collections agency. Some things that have reduced defaults significantly are:
- Address+ verification: All users must get code in the mail in order to verify their address. This combined with a more strict and advance verification system has played a role in reducing defaults.
- Critical Community: Btcpop has built a critical community which actively finds and critiques bad loans to prevent them from getting funded. This has been one of the top reasons for reduced defaults.
- Emphasis on Collateral: Collateral has become the #1 determiner if a loan gets funded. Every borrower is suggested to have a little skin in the game with collateral. And in order to get larger loans funded collateral is basically required or the loan will not get funded.
- Locked in Btcpop loans: If borrowers are not able to come up with collateral the next most funded loan type is “locked in Pop”. This prevents users from withdrawing from Btcpop and gives honest borrowers a helpful tool to restructure or repay, while at the same time stopping scammers.
How defaults are managed when they do happen:
If a loan does go into default (14+ days late) the defaulters collateral is liquidated and insurance is paid out. Upon request, user information is disclosed to holders of the defaulted debt so they are able to individually pursue collections. Btcjam.com pioneered a lot of legal precedents for P2P Bitcoin debt. And while there is legal ground to pursue collections from defaulted individuals, as with many collection cases the cost is usually not worth the expense.
How does the affiliate program work, which parts of the site actually earn money to the referres?
The current affiliate program works by giving every user a referral link that will look like https://btcpop.co/Home/22023/yoursource If a user signs up using that link they are a lifetime referral.
The current system rewards affiliates in 2 ways but in the future plans on rewarding affiliates for all profit generating activity.
- Faucet rewards: Affiliate receives 25% of all claimed rewards from their referral.
- Repaid Loans: Affiliate receives 0.5% Commission on ALL referred repaid loans UNDER ฿5.0
and 0.25% Commission on ALL referred repaid loans OVER ฿5.0
Future plans to reward affiliates for all profit generating activity.
Can you share some security aspects of BTC POP?
I myself am not involved very much on the technical side of security. However, I do know that Btcpop thoroughly gone through its security system and stopped many attempted attacks implementing multiple redundant security measures and sanity checks.
Btcpop’s owner is well versed in cryptocurrency security and online security in general. The industry standard hot/cold wallet system is used for many coins. There is also a redundant backup plan for funds if the owner of Btcpop for some reason falls out of the picture.
Where do you see BTC POP positioned in the future?
In the short term Btcpop will continue to focus its resources on building out and improving its niche as “The Staking Exchange” and enabling P2P lending to organically grow. Btcpop’s exchange has quickly become one of Btcpop’s main growth centers and a strong liquid exchange has the additional benefit of strengthening the use of altcoins as collateral for P2P loans.
In the medium term Btcpop is well positioned to grab some market share both as an exchange and cryptocurrency lending platform. Until cryptocurrency denominated loans become more viable with less volatility, Btcpop sees good potential to continue growth in P2P lending with USD stablecoin loans backed with cryptocurrencies as collateral. The exchange should continue to grow by focusing on POS coins and overtime become more liquid and useful by simply providing a high quality secure service with an exchange API.
In the long term, I see a cryptocurrencies becoming a large part of the global economy. And in a world of P2P money, P2P finance makes a lot more sense. I see Btcpop as a well known and trusted online place to go for crypto financing big or small. Btcpop intends to do this by providing the best marketplace, tools, and adding the least friction possible. Peers around the world will be the ones that truly grow and prosper from P2P finance, we just want to provide a place for that to happen.
I also foresee an online reputation based credit system developing, so more uncollateralized and credit only loans will be funded. And investors will no longer be 100% involved, and instead use algorithms and other tools to take advantage of AI and massive global loan diversification.
Can you let us know some of your favourite crypto projects?
Besides Btcpop I am a big fan of the makerDAO stablecoin project DAI. I love the idea of a decentralized stablecoin providing the stability of a large fiat currency like the dollar, with the decentralized nature of an Ethereum ERC20 token. I am also very excited for when Btcpop can offer DAI denominated P2P financing.
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