(Slowly) Make Money with Bitcoin: Mikadily's Poloniex Lending Bot

Note: Originally published March 21st, 2016 at www.teachmehowtobitcoin. I'm republishing this article on Steemit, as I believe it might of some use to active Bitcoin investors. This is also my first post on Steemit :)

Origin Story

Recently, I've gotten into trading Bitcoin and other digital currencies on Poloniex, a cryptocurrency exchange.

I'd first heard about Bitcoin lending on the (now-defunct?) Smart Bitcoin Investment Podcast, from show guest Jag Runeski from Lumbridgecity, a website that gives cryptocurrency trading and mining advice.

I got really excited listening to that podcast. Delusions of grandeur ran wild – I thought that I might've finally cracked the code to becoming fabulously wealthy from Bitcoin with this lending thing.

I set up a Poloniex account, bought a couple of Bitcoins, and was on my way.

Turns out – I'd misheard Mr. Runeski as far as what the lending rates were. I soon found out that lending a small amount of Bitcoin is actually a really, really, really slow way to make any money.

Actually, if you have access to a lot of capital - we're talking $10,000 and up - you can make some money. Based on average lending rates, you can make about $150 per month for every $10,000 you lend to margin traders on the site(based on the current price of Bitcoin at around $420 on March 27th, 2016).

Poloniex acts as a proxy for the actual lending, and by doing so, protects you from thieves running off with your money.

There are other Bitcoin exchange sites that allow you to lend Bitcoin, but you're doing it peer-to-peer, so it's very easy for the lendee to disappear with your Bitcoin and never be seen again. Sometimes this even happens with highly rated users with 100+ transactions!

In fact, I was assured by a support rep at Poloniex that that has yet to happen. A trader would have to zero out their account on a bad margin trade. However, margin calls prevent this from ever happening.

So let's say you have some Bitcoins and you want to try lending them on Poloniex. What you will quickly find is that the loans are rarely held for the full-term of 2-60 days. In fact, loans are only held as long as a trader is holding onto a position. When the trader sells, the loan is released.

What that means is a lot of tedious screen-watching and clicking and re-clicking to initiate loans.

Enter Mikadily's Poloniex Lending Bot.

The Lending Bot

To use the lending bot, download the zip from GitHub and then generate your API key from Poloniex. Open the lendingbot.py file in a text editor and enter your API key where appropriate. Run the lendingbot.py file(you may need to install Python).

After doing this for a few months I've concluded the bot is legit. None of my Bitcoin has disappeared and been sent to some phantom Bitcoin wallet.

If you try the Poloniex lending bot and you like it, maybe send some sweet BTCs to Mikadily. His public key is:

1MikadW4iKTJ54GVrj7xS1SrZAhLUyZk38

Check out the original post on reddit here.