3 ways to grow your Bitcoins....or 3 ways to lose your Bitcoins?

With fiat currencies, we keep our monies in our banks to earn interest. Alternatively, we invest our idle funds in stock markets to earn dividends, or we buy bonds that could be redeemed with a profit. The end goal of these actions is to gain "X" percentage of your monies after "Y" number of days.

Can the same concept be applied to crypto-currencies? The answer is yes. Here are 3 ways we could do so:

1. Interest-bearing sites

There are reputable bitcoin sites that could hold your idle bitcoins for you and grow your coins in the process. For instant, popular crypto-currency exchange Poloniex offers a margin-lending feature to its users. In short, you could opt for a less-risky option by lending your bitcoins to Poloniex users instead of trading. The daily interest rate fluctuates and it ranges between 0.01% to 0.1% constantly. Any interest that you gained from a transaction will be subjected to a 15% deduction by Poloniex as fees.

Based on these calculations, let's assume you have 2 BTCs loaned to users on Poloniex and the daily interest rate is constantly on 0.07% each day, you will ideally earn 0.0357 BTC in interest after 30 days and this does not include compounding.

However, lenders are required to login to Poloniex every few days to ensure their coins are loaned out successfully due to the competing bidding nature of the lending section where lenders try to out win each other by offering lower interest rates. To maximize your gains, it is advisable to use a lending bot to ensure your coins do not sit idle in Poloniex. You could use Poloniex Lending Bot, a python script that polls Poloniex constantly to ensure your coins are placed on the lending list. 

As an alternative to Poloniex, you could gain interest on your Bitcoins by placing it with BW.com - a Chinese mining pool. It offers 3% per annum returns for your Bitcoins stored with them with options to convert your storage to 3-months, 6-months or 12-months fixed deposits. The interest rates are 6%, 7.3% and 8.6% per annum respectively.

What are the risks involved? There is still a good chance that the exchange or mining pool may collapse which will result you losing all your coins. Remember MtGox and Crypsty? 

2. Invest in funds managed by members in Bitcointalk.org forums

Bitcointalk.org forums is the largest and longest standing Bitcoin discussion forums around. This forum is the epitome of the decentralized nature of Bitcoins - anything goes in this forums: Scammers could start a ponzi scheme there, transfer of bitcointalk forum accounts could be conducted within and there were sales of items that are dubious in nature. However, on the flip side, the ills are being kept in check thanks to a self-policing community who would shame forum members for objectionable conduct.

But entrepreneurship thrives in the same forum. There are members who are making a living from the forums by providing various services to others. There are some members who offer fund investment services. This is how it works: You park a certain amount of Bitcoins with these members, and they would return you your principle and profits after a stipulated time frame. One particular fund that stood out is Delta Investments which has been in the forums for a long time. It has seemingly good reviews because investors have reported  more than 7% gains each week.

I need to warn you that this is a high-risk approach because the fund may collapse and the managers may run away with your coins.

3. Sell your Bitcoins with a 15% mark-up on xCoins.io

xCoins.io is a site that was launched in June with  positive reviews. The controversy with this site is that it uses Paypal as its payment processor. xCoins is a middle man that connects buyers and sellers with the former who seeks to buy bitcoins with Credit card or Paypal -- at a 15% markup price. The sellers will receive the proceeds in their Paypal account. Many readers are very likely to disapprove this site because it is using Paypal as the main mechanism for fund transfer since Paypal transactions are reversible by scammers.

However, xCoins has a verification and validation process that will minimize such risk. For sellers, one plus points is the fact this enables you to gain a 15% profit and the Paypal funds could be transferred to your bank account. You will then be able to buy bitcoins from the lowest price point in main exchanges and resell it on xCoins and the cycle continues...provided that scammers are not able to beat xCoins's verification procedures!

Clearly, the weakest link here is Paypal. If only xCoins are able to use a different payment processor, I am certain more sellers would come on board since the transaction procedures are automated and seamless; unlike Localbitcoins where sellers have to constantly monitor and process each transaction manually.

What are the other ways you grow your Bitcoin investments? Please share your methods in the comments below.