Is BlockFi a Safe Way to Buy Crypto?

When it comes to cryptocurrency apps, finding one that strikes a balance between convenience and security is crucial. While no platform can claim to be 100% secure, BlockFi stands out as one of the more secure options available.

Security Features of BlockFi

BlockFi offers several advanced security features to ensure the safety of your data and funds:

Offline Data Storage: Your data is stored offline in encrypted form, meaning even in the event of a hacker breach, your information remains protected. Layered Security: BlockFi employs two-factor authentication (2FA) and fingerprint verification to further safeguard your account. Account Recovery: In case you lose access to your account, there's an Account Recovery feature that enables you to regain control even if your phone or password is lost.

Bank Deposit Comparisons and Savings

While the funds deposited with BlockFi are considered safe, they do not offer the same level of security as those held in a bank savings account. This is because BlockFi and its custodian, Gemini, are not insured by the FDIC or SIPC.

However, BlockFi takes measures to protect its users' funds by keeping the majority of them in “cold storage,” i.e., offline. This practice minimizes the risk of unauthorized access and ensures that your crypto holdings remain secure.

Market Volatility and Additional Risks

It's important to note that the money you deposit with BlockFi is safe, but not absolutely secure in the same way as a bank account. The interest rates offered by BlockFi are subject to market volatility, and other risks such as gap risks and hacking remain potential threats to crypto platforms.

However, BlockFi is relatively more secure than many other crypto savings accounts. Unlike Nexo and Celsius, which have faced significant issues, BlockFi is backed by reputable institutional investors including Fidelity, SoFi, and Coinbase, providing an extra layer of assurance.

Crypto Trading on BlockFi

BlockFi not only offers the ability to earn passive interest on your crypto and stablecoins but also includes a crypto exchange allowing users to buy and sell various cryptocurrencies:

Crypto: BTC, ETH, LTC, LINK, PAXG Stablecoins: USDC, USDT, GUSD, PAX

I personally use this exchange to periodically convert stablecoins into Bitcoin and Ethereum, effectively doing dollar cost averaging for these two coins.

Comparison with Other Platforms

While BlockFi is generally considered safer, it is always good to compare it with other platforms to assess its relative safety. For instance, Nexo and Celsius have faced security issues in the past, making BlockFi a more reliable choice.

Regulation and Institutional Support

BlockFi's custodian, Gemini, operates under the regulatory oversight of the New York State Department of Financial Services (NYSDFS) and is also a licensed depository trust. This regulatory compliance adds another layer of security and trust to the platform.

My Experience and Recommendation

In my opinion, BlockFi is a solid platform for those looking to earn passive income from their crypto holdings. The returns offered by the platform make it a worthwhile addition to any crypto portfolio.

I would advise starting with a small amount of money to get familiar with how the platform works in practice. Once you’re satisfied, you can gradually increase the total amount you deposit.

Initial Bonus Offer

If you or anyone else is interested in trying out BlockFi and wants an initial bonus, feel free to use code ba5b7efa when signing up. By doing so, both of us will receive 10 dollars in Bitcoin. The first deposit should be at least 100 in any type of cryptocurrency or stablecoin.

I hope this guide helps you navigate whether BlockFi is the right choice for you, and all the best with your crypto investments!

Mike