Due to the large amount of scams in this space, and the free time from the market being so quiet, I would like to do more reviews of platforms to help the common investor differentiate the good from the bad. Therefore, I recently joined a new platform and decided to write about it. That platform is non other than Blockfi, the hottest interest and lending platform. Without wasting any more time, let’s get straight into the Blockfi Review – Legit interest accounts or scam?
Nothing should be considered investment or financial advice. Enjoy the ride.
If you are anything like me, you probably are getting pretty restless. The market is stagnant in my opinion, and the only light at the end of the tunnel short-term is the halving. Although, with all this free time, I start to search for things to do with my crypto.
One in particular has been catching my eye with lofty promises of high interest payments. These usually seem to good to be true, because in the past, they were. There were so many lending platforms that fell flat while thousands of people lost everything. We are talking millions and millions of dollars lost to scams like Bitconnect, Novalend, and many others similar to these that basically set up pyramid style schemes where you get more money based on how many people you attract to the platform.
In reality, these platforms would trap your assets into their internal exchange or market place by making you lend their native token. This way they could control the liquidity of the asset, price fluctuations, and manipulate the payouts. This happens over and over again it seems, but something is different with Blockfi.
This is all being said to let you (The reader) know that, yea, I get it. I get the scams, the FUD, the hacks, the lies, the fake platforms, and yes, I even get why Vitalik likes cat shirts so much.
Just kidding, no one understands that.
But seriously, I am just as skeptical as the next person, and probably even more so. Therefore, I am testing out Blockfi myself just to make sure anything I write or post is from personal experience. Currently, I am two months into using the platform. From my brief experience, here are my thoughts and opinions on the platform.
Does Blockfi Work?
The answer is, I think so. Thus far, the monthly interest has been accruing daily, and I can easily see it growing. To start off my account, I deposited $100 worth of Bitcoin and $100 worth of Ethereum. Ironically, right after I deposited the crypto the price spiked. Which, in no way am I complaining about. Here is a snapshot of the first day growth which continued to gradually grow.
I know $.01 does not look like much, but that grew over the day and over the month into much more. To respect the platform, I do not want to fully disclose how much interest was obtained exactly. I can confirm the interest grew, it was deposited into my account after the month, and I am happy with that.
A few things to note:
The interest grows on a monthly compounded rate to the projected amounts. That means you have to take the annual interest rate as a rate you will receive from leaving your crypto in the account for an entire year and reinvesting the profits. That means you can not withdraw your profits, or your investment will not compound to receive the full projected growth amount.
To be clear, you can withdraw your crypto at anytime. Although, to maximize return, I suggest not doing that unless you plan to sell right away.
Withdraws From Blockfi
Speaking of withdrawing crypto from the platform, it is relatively simple. It is the same process as withdrawing from any other exchange or wallet, except you only receive one fee-less withdraw per month. Afterward, any other withdraw that same month will incur a small fee. The fee is different per crypto as well, just as the interest rate per crypto asset differs. Please note that any withdraw address needs to be white listed 72 hours in advanve before the withdraw is available.
That means, when you open your account you need to go ahead and white list the address you want to withdraw to or you will have a 72 hours wait time when you try to withdraw later on.
The saving grace for this platform is that it did not try to create its own native currency and force users into using it. By letting people receive interest on their own coins, the ones you can deposit, it simplifies the platform and increases transparency.
Personally, I found the platform easy to navigate after making my first deposits and withdraws.
Partners and Accreditations
While the platform was easy to navigate, and the interest payments seem to be working, I still have to know more. A great thing about Blockfi is that it is actually backed by some of the largest names in the crypto industry.
And no, I do not mean John McAfee, Craig Wright, or Roger Ver. I would stay away from anything these guys invest in.
Although, Blockfi is backed by the Winklevoss twins who own Gemini, ConsenSys, Valar, Galaxy Digital, Susquehanna, Morgan Creek and Coinbase. There are many others, and to add to this impressive list, there were reports that Blockfi already has over $55 million in assets under management based on early 2019 figures. The company more than likely has over $100 MM at this point in time of February 2020.
Clearly, Blockfi has more than just con artists to attract the most reputable brand names in the industry to their front door.
Should You Open an Account
Well, honestly that is entirely up to you. If you do not mind putting your crypto in a form of hot wallet, then it might as well be in one that is earning you money passively. Most people at this point store their crypto either on exchanges, custodial providers, native wallets, or cold storage. Personally, I like to have my assets available, but every person needs to figure out what they are most comfortable with.
By all means, I would recommend testing out Blockfi. At the very least, you will learn about it and be able to advise other people if they ask you about it. You might even earn some free crypto along the way. Did I mention, you can request which crypto you would like to be paid out in? I obviously chose Bitcoin.
Is Blockfi Worth it
This is sort of like repeating the above question, but at this point in time I would say yes.
With everything that I have seen, there are no huge red flags. That being said, I would never put all of my money in one platform. In addition, there is no guarantee for liability taken on Blockfi’s side given the platform is hacked or goes offline. They explicitly say in their contract, they are not liable for losses incurred through investments or hacks.
I say that just so you do not think you are 100% protected against everything. As always, do your own research, test out the platform, and make sure to monitor your investments at all times. Thanks for reading my Blockfi review. Leave a comment if you use the platform. Tell me what you think about it as well.
In full disclosure, this is not a paid advertisement, and in no way am I sponsored by Blockfi. The only thing I do utilize is affiliate links to help support the blog.