Cointiply is a popular, tried and tested crypto faucet with some interesting earning options. Cointiply was launched early in 2017 so it has been active for over five years now and has built up a solid reputation as a reliable crypto faucet site.
You can earn crypto by clicking on the faucet once an hour, viewing PTC ads, watching videos, doing surveys and so on, but that is not the topic of this Cointiply training video.
How To Earn 5% Interest (Paid Weekly) On Cointiply
Instead, in this video I focus on the 5% interest rate that Cointiply offers, how to activate it and the potential risks and rewards involved.
For me, holding some crypto on Cointiply serves two purposes:
- Asset diversification to reduce or mitigate counterparty risk.
- Bitoin hedge
Counterparty Risk
In the video I talk a bit about the "counterparty risk" that everybody has to deal with when depositing assets with a third party, such as a bank, investment fund, a cryptocurrency exchange, or faucet sites such as Freebitcoin and Cointiply.
One rule of thumb to help you wrestle with counterparty risk is the "Lindy Effect," which I blogged about here:
@hirohurl/bitcoin-faucets-and-the-lindy-effect-how-much-longer-will-btc-faucets-survive
(Note: The youngest website that I cited in that blog post and video is the one that turned out to be a scam!)
Diversification of Risk
One way to protect the crypto assets that you hold online from a complete wipeout is to split them across several web properties. That is something I've been doing with the sats I've accumulated on Freebitco.in ever since I hit my 2023 target of 5 million satoshi on that site.
Freebitcoin pays out 4.08% interest on accounts that hold at least 30,000 satoshi, and Cointiply pays 5% on accounts that hold at least 35,000 Cointiply coins (equivalent to $3.50).
So I decided to send about $40 worth of BTC from Freebitco.in to Cointiply as part of my "Asset Diversification" strategy, and also as a hedge against a sudden drop in the value of Bitcoin against the US dollar.
Using Cointiply As A Bitcoin Bear Market Hedge
Cointiply converts Bitcoin deposits into Cointiply coins at the rate of 10,000 Cointiply coins per US dollar, and converts Cointiply coins back into BTC (or whatever crypto you are working with) when you withdraw your assets.
In my opinion, this adds an extra layer of risk to Cointiply transactions since, despite the five years of unblemished trading, we cannot be certain that Cointiply's coin is really a stable coin or that they will always maintain the Cointiply/USD exchange rate at 10,000/1.
However, "Lindy" encourages us to think that since Cointiply has existed for a solid five years or more, it is not unreasonable to suppose that it might continue for another five years.
So, assuming the coin/USD rate remains fixed at 10,000/1, Cointiply can act as a Bitcoin hedge.
How so?
Let's say you deposit $300 worth of Bitcoin when one Bitcoin is worth $30,000. Cointiply will exchange your 1,000,000 satoshi (1% of 100m sats) for 3,000,000 Cointiply coins.
Now suppose that the bear market tightens its grip and the price of Bitcoin drops from $30,000 to $15,000.
You still have 3 million Cointiply coins (not including the interest your deposit has been earning), which are worth $300. Now, if you convert them back into Bitcoin, you will end up with twice the amount of satoshi as you had when you made your initial deposit, that is, 2,000,000 satoshi! That would be a good time to send your BTC back to Freebitcoin where they will continue to earn interest for you.
The Downside!
Of course, there is a downside to this strategy, which is that Bitcoin goes up and never drops below $30,000. In that case, whenever you swap out your Cointiply coins for Bitcoin, while the US dollar value is at parity, you will suffer a loss on the number of satoshi that are returned to you.
If, for example, the price of Bitcoin doubled to $60,000, now you'd only get back 500,000 satoshi. The dollar value is the same as when you made your deposit, but you end up with only half the number of satoshi as you started with.
That's why I put only a small proportion of my Bitcoin into Cointiply. It's a nice downside hedge. It earns 5% per annum (paid weekly), and helps me to diversify my crypto holdings.
So, to sum up, this strategy comes with these benefits and risks:
Benefits:
- Reduces counterparty risk.
- Offers a hedge against a fall in the value of Bitcoin.
Risks:
- Bicoin only rises and you lose satoshi while maintaining dollar value of your holdings.
- Cointiply suddenly change the Cointiply coin/US Dollar rate.
(I think this would be a disaster for their reputation, and would be a harbinger of doom for the site, were it to happen.)
Cheers!
David Hurley
#InspiredFocus
P. S. Check out my (completely different) blog post on the topic of Cointiply's 5% interest rate on my blog:
https://davidhurley.net/earn-5-interest-on-your-cointiply-holdings-a-step-by-step-guide/
P. P. S. Start earning with Cointiply (no deposit needed): http://cointiply.com/r/P2Pxp
P. P. S. For more tips about how to earn crypto without any out-of-pocket expense, hop on board my free Beginners Crypto Course:
https://lllpg.com/mhpz6yzd/hive