Content corrected by an authorized editor Karol Kiełtyka - 9/23/20, 7:13 PM
Hi. Can you explain to me in simple words what is a BlockFi and is it safe investing in?
There is no doubt that using a platform like BlockFi is more risky than storing cryptocurrencies in your wallet. These platforms are typically investment vehicles that offer lucrative interest on your cryptocurrencies. BlockFi is a platform for lending and borrowing cryptocurrencies, which was launched in August 2017. The company is one of the pioneers of cryptocurrencies supported by large investment funds, among others: Morgan Creek, Winklevoss Capital, Galaxy Digital, Coinbase Ventures.
BlockFi currently offers three products on its platform, which is earning interest on cryptocurrencies, loans against your cryptocurrencies and trading. For example, you might be earning 6-8% interest on bitcoins, but you want your payout to be in one of the supported coins like ETH or PAX. BlockFi mainly makes money by lending crypto assets to other institutional counterparties to trade and borrow cryptocurrency. Some of these borrowers are traders and mutual funds, market makers (OTC), companies that require cryptocurrency stocks to provide liquidity to clients.