In this article we will be covering if BlockFi is safe from hackers. Personally, I’ve been using the BlockFi interest account for well over a year. In that time, I’ve learned the ins and outs which will be shared in this post. First let’s go over some of the reasons to get involved in cryptocurrency.
Why Get Involved in Cryptocurrency?
Cryptocurrencies are decentralized, digital, or virtual currencies that use cryptography for security. Cryptocurrency’s organic nature is its most appealing feature, as no central authority controls it, making it theoretically immune to any interference from a governmental entity or other attempts of malicious manipulation. Because of these security measures, counterfeiting a cryptocurrency is difficult.
It’s predicted that by end of 2025, over $15 Trillion will be invested into cryptocurrency. The earlier you invest in cryptocurrency, the higher your chances for making a substantial return on your investment in the future. Getting involved in cryptocurrency now could be one of the smartest decisions you ever make as an investor since the future of this innovative technology is promising.
Benefits to Staking Crypto
Staking is a term used to relate to the process of earning rewards from your cryptocurrency portfolio. It’s called staking because currency holders will deposit their currency (or stake) into a wallet designed to earn a small percentage of the coins they stake.
Staking crypto is beneficial to holders in many ways. Crypto blockchains utilize the coin’s native currency to maintain the blockchain. This means that a certain amount of cryptocurrency must be staked to be awarded network and transaction fees. Because of their nature, these staking amounts can be quite large, ranging from several hundred dollars (USD) and upwards per month up to hundreds of thousands of dollars.
For individuals, the primary benefits of staking cryptocurrency are twofold. The obvious advantage is being awarded more cryptocurrency, which can then be sold for profit or used to buy something else. Staking can also encourage long-term investment in crypto as it can potentially produce returns even when prices drop. Additionally, there is no minimum amount of cryptocurrency needed to stake, meaning that every wallet holding that crypto has an equal chance at receiving rewards.
Where to Stake Crypto?
Crypto as an asset class is in a precarious position. Many valuable digital assets are illiquid and locked, either from private keys or frozen by exchanges. As a result, investors cannot take advantage of potentially highly profitable opportunities or handle unexpected emergencies. BlockFi is an excellent solution for these issues. They provide access to the benefits of crypto investments through lending, thus allowing the use of liquid capital while retaining asset position and liquidity.
Their loan products are collateralized by your Bitcoin, Ether, or Litecoin. The funds in your BlockFi loan will be used for staking – it’ll work like earning interest on savings. In exchange for the convenience of having a loan, BlockFi will charge a fee, as well as a staking fee depending on which coin you choose.
Benefits to Using BlockFi
BlockFi offers a safe place to store cryptocurrencies in traditional financial instruments. They are a fully SEC-compliant crypto lender that offers simple and secure solutions. Their infrastructure, processes, and policies have been rigorously tested through a series of bank-like lending trials. BlockFi has developed a way to offer cryptocurrency loans safely that ensures its full regulatory compliance. They lend money against cryptocurrency because they operate as an FDIC-insured, US-based, fully regulated, and licensed financial institution.
There is a significant benefit to using BlockFi to own cryptocurrencies. The process does not require exposure to cryptocurrency price volatility. At the same time, you are consistently earning interest on your holdings.
BlockFi is opening the doors to crypto for all the world. They offer a platform for cryptocurrency education and investment. A simple application process makes it easy for you to start investing in cryptocurrency with just $1,000. But is BlockFi safe from hackers?
Is BlockFi Safe from Hackers?
So, is BlockFi safe from hackers? Because the barrier to entry into crypto is so low, very few barriers exist to prevent potential hackers from gaining access to your funds. Therefore, one of the easiest ways to avoid losing all your crypto investments is to keep them in BlockFi and not use it anywhere else. BlockFi employs multiple security solutions to keep private keys and user data safe, including a process that involves both a mnemonic phrase AND a company-specific master key. They then require users to pass two separate authentication checks (username + password or a biometric) before gaining access to the platform or funds.
BlockFi’s platform is well known for its security. They use secure cold storage (an offline method of holding cryptocurrency tokens) for most of the funds in holding and have developed a robust system for securing these assets offline. They have also implemented several additional proprietary security measures to protect their customers from hackers or other potential risks.
Interest Rates for Ethereum and Other Coins
BlockFi offers the most competitive rates on Ethereum, Bitcoin, and other cryptocurrency loans in the market. BlockFi doesn’t add any fees beyond the index rate. BlockFi is more transparent than its competitors since they don’t hide premium interest rates with upfront fees and monthly minimums.
BlockFi provides cryptocurrency-denominated loans and interest rates through 3 main products: Lines of Credit, Commercial Loans, and Retail Loans. They offer short-term (1–6 months) and long-term (12–60 months) loans. The interest rate will vary based on several factors, including credit risk. Generally, the annual percentage rate on their loans is in the 14%-20% range, depending on the crypto price and your interest rate term.
BlockFi offers interest rates on cryptocurrency deposits up to 10.00% APY, depending on the coin and duration of your deposit. BlockFi provides interest rates for cryptocurrency based on the market price but not on the blockchain (e.g., Ethereum). The market rate is set by an algorithm that updates every five minutes. It does real-time spot pricing of ETH and BTC prices.
Borrowing Money on BlockFi
Cryptocurrencies are volatile, but their value is steadily increasing. BlockFi makes loans to its customers in USD and charges a high-interest rate on the loan so that if the price of bitcoin falls, then your loan gets paid back in dollars equivalent to the price of bitcoin at the time of repayment. Over time, as the cost of bitcoin fluctuates, BlockFi will adjust the principal amount of the loan in tandem with price changes so that the trader can hold onto their investment safely. The borrower’s cryptocurrency secures these loans, and the loans can only be paid back in cryptocurrency. Thus, a borrower loses on the price difference but earns through the high-interest rate charged on the loan.
So, is BlockFi safe from hackers? Absolutely. BlockFi is building an ecosystem for financial products based on cryptocurrencies, lending, trading, investment funds, insurance, and savings. Borrowing money through the BlockFi platform means you’ll immediately have access to additional capital without having to sell valuable assets. This can help you improve your financial position and diversify your portfolio. BlockFi’s approach is safe and secure. Get the cash you need for emergencies or take advantage of other opportunities using your bitcoin and Ethereum as collateral.