Depositing crypto into BlockFi to earn interest, ok or stupid idea?

[hashtag]

Their interest rates are competitive. They claim to lend out those money to institutions....

However, I know only that they are backed by Gemini but not much else.

I'm trying to estimate the counterparty risk so please help me with anything you know about them and the team?

[Slow death]

Their interest rates are competitive. They claim to lend out those money to institutions....

However, I know only that they are backed by Gemini but not much else.

I'm trying to estimate the counterparty risk so please help me with anything you know about them and the team?

https://blockfi.com/team

Crypto-Backed Lending Platform Blockfi Approved to Operate in California

Back in July, news.Bitcoin.com reported on the cryptocurrency-backed USD lending platform, Blockfi, which raised $52.5m from investors in an investment round led by Michael Novogratz’s Galaxy Digital. On Monday, Blockfi announced the firm is now servicing residents from California and the latest expansion leads to the crypto-lending service being available in 44 states.

I think they are legitimate, but I do not know if it is advantageous to use their services or not. This is for you to decide.

[mk4]

If I remember correctly, their annual interest rates is at around 7%? While definitely not a bad deal, decide for yourself if you're willing to leave funds to a service for a good amount of time, and if it's worth the risk or not. Risk meaning potential issues like hacks, regulations, and such. While they might be taking their security seriously, these things(especially hacks) should always be one of the factors for your decision.

[gentlemand]

They've just reduced the interest rates paid to anyone who deposits above 25 BTC or 500 ETH to 2%. Why would you even dream of taking that risk for that little?

It's still 6.whatever below that amount but if they cut the rate at that level after a month or so there's nothing to stop them doing it again tomorrow.

And they're not backed by Gemini. Gemini have been contracted to store the coins. Nothing more. They can easily still have the coins and wind up owning far more. You can be 'legit' and still fuck up.

[dothebeats]

And they're not backed by Gemini. Gemini have been contracted to store the coins. Nothing more. They can easily still have the coins and wind up owning far more. You can be 'legit' and still fuck up.

This third-party service is asking a third-party to hold the funds for them. In the event of loss of funds due to hacks and whatnot, I'm afraid coin owners and users will have a pretty hard time determining who to run after, as I'm pretty sure both services will point fingers once they are on the said situation. The 'legit' services fucking up hard are pretty much rare, but in matters concerning cryptocurrencies, it's pretty much commonplace thinking that they can get away with such carelessness.

As for OP, I don't think it's even best to think about leaving funds on a site with no assurance that they are insured to the teeth just to take 6% interest per annum. I'd assess the risks and pretty much check whether there are other places in which I can take my money for less risks and for more control rather than leaving it there and hoping for the best.

[buwaytress]

If your deposits are insured, then sure why not? If Japan's able to enforce deposit insurance on licenced exchanges, surely a Gemini-backed entity must be able to do the same, especially if they're soliciting your deposits.

2% annual interest is not worth the risk, as pointed out. If you REALLY wanted to gamble, there is a service here that lets you earn about 4% annually (compounded), crediting you daily, and funds never locked. Hint: They're in Gambling section and are one of the most read and responded to threads. They've not scammed anyone for 4? 5? years but I wouldn't store my precious savings for that kind of interest. A little here and there, sure.

[hashtag]

If your deposits are insured, then sure why not? If Japan's able to enforce deposit insurance on licenced exchanges, surely a Gemini-backed entity must be able to do the same, especially if they're soliciting your deposits.

2% annual interest is not worth the risk, as pointed out. If you REALLY wanted to gamble, there is a service here that lets you earn about 4% annually (compounded), crediting you daily, and funds never locked. Hint: They're in Gambling section and are one of the most read and responded to threads. They've not scammed anyone for 4? 5? years but I wouldn't store my precious savings for that kind of interest. A little here and there, sure.

It's 6% for the first 500 ether


what is that service you are talking about? I suppose there is still counter party risk? If not even more?

[mk4]

It's 6% for the first 500 ether


what is that service you are talking about? I suppose there is still counter party risk? If not even more?

That's pretty much trusting around $70,000 on today's prices on a company. While 6% annual interest for that amount is definitely mouth-watering, it really isn't worth the risk in my opinion.

You do you though. If you think the 6% is worth the risk, then go for it. Just take note that while the company is probably legitimate, the funds they're holding being stolen is NOT impossible. Or they might even pull off a Quadriga. 🤷‍♂️

[1Referee]

Nothing is worth exposing yourself to the risks of having your coins held by whatever party, not even when everything is insured.

The thing with insurances or exchanges in general settling their debt, is that these always work against you. Lets say that you have 10BTC currently worth $4000 stored there and they get hacked or lose them. If the price fell back to $1000 they will refund you your Bitcoins. If the price went up to $20,000 they will refund you the $4000 they were worth per coin.

Sure, you can say it's still better than nothing, but this better than nothing simply isn't worth the risk. This isn't even taking into consideration the hassle and the stress involving this whole process. Smart people find better ways to generate income. Dumb people will go for these platforms.

[buwaytress]

If your deposits are insured, then sure why not? If Japan's able to enforce deposit insurance on licenced exchanges, surely a Gemini-backed entity must be able to do the same, especially if they're soliciting your deposits.

2% annual interest is not worth the risk, as pointed out. If you REALLY wanted to gamble, there is a service here that lets you earn about 4% annually (compounded), crediting you daily, and funds never locked. Hint: They're in Gambling section and are one of the most read and responded to threads. They've not scammed anyone for 4? 5? years but I wouldn't store my precious savings for that kind of interest. A little here and there, sure.

It's 6% for the first 500 ether


what is that service you are talking about? I suppose there is still counter party risk? If not even more?

Still not worth it, my friend. In fact, I'm still not sure any amount of interest is worth it, and that they're actually lowering interest rates is a sign that even they can't make as much as touted.

Anything guaranteed just sits uncomfortably with me, because there's no such thing. Like I said, though, if deposits were insured, like they would be in a bank account, that's a different story. That's what you should find out (and I'm more than certain they don't).

The service I'm talking about is freebitco.in. Probably the oldest faucet around? That's the same risk I'd say, putting your money and hoping they never run away. They've never scammed, but past performance isn't a guarantee of future, right?

[shield132]

If your deposits are insured, then sure why not? If Japan's able to enforce deposit insurance on licenced exchanges, surely a Gemini-backed entity must be able to do the same, especially if they're soliciting your deposits.

2% annual interest is not worth the risk, as pointed out. If you REALLY wanted to gamble, there is a service here that lets you earn about 4% annually (compounded), crediting you daily, and funds never locked. Hint: They're in Gambling section and are one of the most read and responded to threads. They've not scammed anyone for 4? 5? years but I wouldn't store my precious savings for that kind of interest. A little here and there, sure.

+1 this one. For me the service which offers withdraw anytime is better than that one, in any way deposit is still risk becausr unlike banks you have zero guarantee they won't go scam. But personally I would risk if I plan to hold my bitcoins and get rid of manual trading, but still, price is a little bit easier to predict now to my mind, you would gain that interest with some trade pretty soon.

[magneto]

Their interest rates are competitive. They claim to lend out those money to institutions....

However, I know only that they are backed by Gemini but not much else.

I'm trying to estimate the counterparty risk so please help me with anything you know about them and the team?

I personally wouldn't take the risk of this.

You simply don't know whether or not they are running a fractional reserve at a particular point in time. Also, there may be KYC/AML concerns where since your bitcoins are no longer in your exclusive control, they could hold up your funds citing the need for further verification, or suspending your account because suspicious activity. These things may seem unlikely now, but once you deposit your BTC with any central entity, you're faced with them.

Apart from their affiliation with Gemini, this is not even a particularly new idea as I've mentioned before. Previously, there were services such as Magnr if I remember correctly offering pretty much the same thing, and the reason why they didn't pick up was exactly because of the high risk, low reward situation that investors are put in.

You may be better off offering collateralised loans on the forum (You'll get 0.05-0.1% per day on loans at the very least, although obviously you'll need to find clients), or lending on exchanges, if you were comfortable with taking this counterparty risk with blockfi.

[anu1908]

i personally don't trust any third party services that 'control' my money even for a little while. i don't really care how legitimate they are but not being able to control that much money is big no for me. if you want to earn interest, maybe running lending services in this forum is an alternative, unless you want something simple.

[BitHodler]

if you want to earn interest, maybe running lending services in this forum is an alternative, unless you want something simple.

It's hard to actually get things working on this forum as newbie that wants to put its coins to work. There are quite some reputable members here offering super low interest loans already.

Competing with these members by offering even lower interest rates isn't appealing enough to satisfy people. People need to understand that some times you shouldn't try to invest your coins, but invest time in yourself.

There will be a time where your local bank will pay interest over the coins they hold on your behalf. People may not like banks, but they are more trustworthy than all crypto services combined in that aspect.

[Lucius]

People may not like banks, but they are more trustworthy than all crypto services combined in that aspect.

This is one big truth, cryptocurrency non-regulation is still enables various companies and individuals to fish in murky waters. I do not think it's time yet, and perhaps will never be to trust anyone when it comes to cryptocurrency in such a way that they are entrusted with our private keys. In fact in this way people undermines one of the basic idea which stands behind cryptocurrency, to be your own bank and to have full control over your coins.

[leowonderful]

Really depends whether you think the risk-to-reward ratio for this is worth it. Gemini holding the coins is definitely a big plus, but there's still at least some level of risk that the coins could be stolen; if you do choose to invest into this platform, do not invest more than you can afford to lose.

Lending on these forums can be very difficult if you don't have an older account or good trust feedback, but if you've got the time for it, lending with collateral can be very lucrative. Trading can also be profitable if you've got the time and patience to learn about it and practice, though it's not something you can instantly pick up and start earning on day one. You can even make money selling crypto for fiat and buying back into crypto through the Currency Exchange section- there's an uncountable number of ways to make money on this forum. You just have to find them.

[gentlemand]

Gemini holding the coins is definitely a big plus, but there's still at least some level of risk that the coins could be stolen; if you do choose to invest into this platform, do not invest more than you can afford to lose.

I don't think coins being lost or stolen is the problem. It's them over extending their liabilities. They may start off with a minor flirtation at fractional reserve, get cocky and blow it completely. You can still have all the coins and finish up owing far, far more.

What goes in and what comes out has the potential to become very screwy very quickly.

[milewilda]

People may not like banks, but they are more trustworthy than all crypto services combined in that aspect.

This is one big truth, cryptocurrency non-regulation is still enables various companies and individuals to fish in murky waters. I do not think it's time yet, and perhaps will never be to trust anyone when it comes to cryptocurrency in such a way that they are entrusted with our private keys. In fact in this way people undermines one of the basic idea which stands behind cryptocurrency, to be your own bank and to have full control over your coins.

And most people do forget such thing, thats why they're here on crypto because of the reason to be you own bank.If they do always prefer on trusting up these kind
of platforms then better to stick on traditional banks which i do completely agree that they are more trustworthy compared to this one.

[hashtag]

If your deposits are insured, then sure why not? If Japan's able to enforce deposit insurance on licenced exchanges, surely a Gemini-backed entity must be able to do the same, especially if they're soliciting your deposits.

2% annual interest is not worth the risk, as pointed out. If you REALLY wanted to gamble, there is a service here that lets you earn about 4% annually (compounded), crediting you daily, and funds never locked. Hint: They're in Gambling section and are one of the most read and responded to threads. They've not scammed anyone for 4? 5? years but I wouldn't store my precious savings for that kind of interest. A little here and there, sure.

It's 6% for the first 500 ether


what is that service you are talking about? I suppose there is still counter party risk? If not even more?

Still not worth it, my friend. In fact, I'm still not sure any amount of interest is worth it, and that they're actually lowering interest rates is a sign that even they can't make as much as touted.

Anything guaranteed just sits uncomfortably with me, because there's no such thing. Like I said, though, if deposits were insured, like they would be in a bank account, that's a different story. That's what you should find out (and I'm more than certain they don't).

The service I'm talking about is freebitco.in. Probably the oldest faucet around? That's the same risk I'd say, putting your money and hoping they never run away. They've never scammed, but past performance isn't a guarantee of future, right?

You compare regulated service with established team to a faucet?

[mescalito]

I guess it's a Ponzi, how else do they want to make more than 6% p. a.? Actually there is one other possibility. They'll long BTC on say 3:1 leverage.