In our BlockFi Review 2020 we will see on what cryptocurrencies you can earn the best interest. BlockFi offers crypto interest account for Bitcoin, Ethereum, Litecoin and stablecoins.
We have used BlockFi for a year now and we are very satisfied with the service and the interest.
If you are about to deposit you cryptocurency holdings into BlockFi, the first question you ask yourself is if BlockFi is safe, or not?
In this BlockFi review we will go through BlockFi´s products and review them. BlockFi offers interest accounts, crypto loans and crypto trading.
Other related business we have used for Bitcoin and crypto interest accounts are Crypto.com, Nexo and Celsius. You can read more about Celsius in our Celsius Network Review.
What is BlockFi?
BlockFi offers three main products
- Interest accounts
- Crypto loans
- Crypto trading
In this BlcokFi review we will focus on the interest account.
With the BlockFi interest account you can deposit and earn Bitcoin and crypto passive income. The interest is paid out in the beginning of every month. The interest earned by account holders compounds.
In the case you wish the compund interest to be paid out in different asset other than the one you deposited, BlockFi offer Interest Payment Flex.
Interest Payment Flex gives you the option to hold your crypto in you BlockFi Interest Account and get all of your interest paid out in the currency of your choosing.
What rates does BlockFi offer?
BlockFi offers interest accounts for BTC, ETH, LTC, USDC, GUSD and PAX.
BlockFi Interest Account VS Competitors
BlockFi offers some unique features attached to its interest account compared to the competitors.
Many of the competitors , like Nexo and Celsius for instance, promote their native token and connect their offers to it. BlockFi doesnt rely on such an internal token and all users are treated the same and you will earn in the deposited cryptocurrency.
How does BlockFi earn money?
BlockFi generates interest on assets held in Interest Accounts by lending them to trusted institutional and corporate borrowers.
Is BlockfFi safe?
Many ask themselves, whether or not, BlockFi is safe? We will explain how BlockFi have established a safe crypto platform for lending and loans.
BlockFi works with some of the best crypto security in the world (Gemini Custody). Gemini is BlockFi’s primary custodian. Gemini keeps 95% of their assets in cold storage and 5% in hot wallets that are covered by insurance provided by Aon. Any funds compromised in cold storage would be covered by their new insurance policy.
BlockFi is registered with the U.S. Department of Treasury Financial Crimes Enforcement Network (“FinCEN”) as a money services business (“MSB”). As a registered MSB, BlockFi is subject to the Bank Secrecy Act and its implementing regulations.
Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections.
BlockFi is as safe as one can wish. However, the whole cryptocurrency industry is young and still volatile.
What are the BlockFi risks?
Exchange Risk – There is always a risk when you let a third party handle your private keys. If they are hacked and your keys are compromised you lose your cryptocurrency.
Company Default Risk – BlockFi is a stratup in a completely new industry. If the company default there is no FDIC or SIPC insurance. You are investing in their loan business.
Borrower Default Risk – What happens if the borrower default their loan?
Interest Rate Risk – The interest rates are dynamic and will change over time. They will likely decrease over time when the volume increases.