Bitcoin Interest, found online at BitcoinInterest.io, describes itself as a “decentralized savings community”. Find out what that means today in our review.
What is Bitcoin Interest?
Bitcoin Interest is a frictionless global payment system that claims to focus on three specific aspects of the industry, including technology, community, and savings. The Bitcoin Interest payment platform has “a new integrated savings technology that allows our users to park their coins and earn interest,” explains the official website. The platform is scheduled to launch in January 2018 with a hard fork at block 505083, which should take place on January 18.
Despite the name and the hard fork, the team insists that they’re not looking to replace bitcoin; instead, they want to build “a new technology to help support the progressing of the overall ecosystem.”
How Does Bitcoin Interest Work?
Bitcoin Interest claims its network “can handle many transactions per second while reducing the bottlenecks and lag of the legacy version of bitcoin”.
The network will start with a much lower difficulty than bitcoin, allowing miners in the community to benefit from higher rewards. Bitcoin Interest’s network uses GPU mining, which they claim will lead to “a more decentralized network as we will not be excluding any of the smaller miners.”
What’s the point of the Bitcoin Interest network? As mentioned above, the developers don’t want to replace bitcoin (BTC) as a payment platform. Instead, they’re advertising their network as a savings system where miners and coin holders can park their coins to earn a monthly interest rate. That’s where the name “Bitcoin Interest” comes from.
The platform revolves around the use of Bitcoin Interest Coins, or BCI. Every BCI block has two rewards. The biggest reward goes to the miner for their participation in solving the block, while the other reward is sent to the interest pool to facilitate interest payments for those who participate in BCI coin parking.
Parking rewards are assigned through Enhanced Proof of Work, which uses the Equihash algorithm. The interest pool reward will start at 1.08 BCI, decreasing to 0.54 BCI as the block height increases.
Bitcoin Interest claims there’s no set interest rate: the interest payment you receive after round depends on two things: how many BCI coins you park and how many other BCI coins are parked in the active interest round. After you park your coins, the system will continuously check to make sure your coins are parked for the entirety of the interest round.
Obviously, this is all a bit complicated, so let’s break it down into real terms. Here’s how the website explains it:
“If I was to park 100 BCI coins for the entire duration of the round, and there were another 1000 BCI coins parked, then I would receive 10% of the interest pool balance once the round has finished.”
Users can choose a weekly or monthly interest period for parking their coins and claiming their share of the collective interest pool. Miners receive 12.5 BCI from each block they solve, and with every block solved, an additional 1 BCI coin is generated and placed in the interest pool. 30% of the interest pool is used for weekly payouts, while 70% of the pool is used for monthly payouts.
Who’s Behind Bitcoin Interest?
Bitcoin Interest is led by Lars Mapstead (“Legendary Lars”), Aaron Mathis (“The Codefather”), Nicholas Dooley (“Noodles”), and Manuel Gonzalez Garcia (“The MexiCAN”).
The official Bitcoin Interest website links to the LinkedIn pages of all four members of the team. The four members list themselves as cryptocurrency enthusiasts and computer programmers. However, none of the four profiles make any mention of Bitcoin Interest. This could be an innocent reason: the company could be operating in stealth mode, and the team members don’t want to be publicly associated with it.
However, we’ve seen online scams previously appear online that seem to list real team members, but in reality, these people don’t know their LinkedIn profile is being used to promote the scam. We assume that Bitcoin Interest is a legitimate project backed by these four individuals, but it’s a bit of a red flag.
Bitcoin Interest Distribution Model
Bitcoin Interest will launch on January 22, 2018, or at block 505083. If you hold bitcoin at that time, then you received a 1 to 1 swap from Bitcoin to Bitcoin Interest.
The Bitcoin Interest team will retain 1 million BCI coins out of the 21 million total supply. Those coins will be used to fund the monthly interest pool for the first year, to pay costly exchange fees, to market their project, to improve it, and to pay ongoing server maintenance costs.
You’ll be able to claim your BCI coins after the fork by inserting your BTC private key into your BCI wallet. You can also transfer your BTC to an exchange that supports the Bitcoin Interest fork.
The Bitcoin Interest Conclusion
The original bitcoin (BTC) gives no rewards for holding coins. Bitcoin Interest aims to create a cryptocurrency that incentivizes savings while still being usable as an international, frictionless cryptocurrency.
Bitcoin Interest’s hard fork is scheduled for January 22, or block 505083. If you hold bitcoin leading up to the hard fork, then you’ll receive an equivalent amount of Bitcoin Interest.
Obviously, when someone starts talking about cryptocurrency lending programs and high interest rate staking programs, it’s a red flag you’re being scammed. Unlike Bitconnect and similar Ponzi schemes, however, Bitcoin Interest appears to have a legitimate development team and a more legitimate platform. Nevertheless, there’s no whitepaper listed online, and it’s not totally clear where the value of the cryptocurrency comes from.
To learn more about Bitcoin Interest and the upcoming hard fork, visit online today at BitcoinInterest.io.