Topic: BlockFi/Celsius vs Cold Wallet (Read 234 times)
Of all the platforms to earn some extra, BlockFi & Celsius are among the safest, but TBH you won't get much in return. For bigger bucks try a good lending platform, check the APY and see huge gains. Less safe than a cold wallet but safer than trading against the whales - you will probably lose that battle, but you'll win on a good lending protocol
Blockfi & Celsius is basically a gamble.
I dont know much about Celsius but I do have some Bitcoin on deposit with Blockfi
since earlier in the year and yes its a risk because I release control of them to the platform.
They are a lending platform, they as @o_e_l_e_o states lend out what I gave them to
others and pay me interest for that.
While Botcoin's FIAT value is increasing the amount of Bitcoin and Satoshi's remain
the same, 1 Bitcoin will always be 1 Bitcoin, so these lending platforms offer a chance
to increase your "holdings" ... at a risk.
As mentioned by many above, use only what you are willing to lose.
Any other wallet which you have access to the private keys is in your control.
I dont know much about Celsius but I do have some Bitcoin on deposit with Blockfi
since earlier in the year and yes its a risk because I release control of them to the platform.
They are a lending platform, they as @o_e_l_e_o states lend out what I gave them to
others and pay me interest for that.
While Botcoin's FIAT value is increasing the amount of Bitcoin and Satoshi's remain
the same, 1 Bitcoin will always be 1 Bitcoin, so these lending platforms offer a chance
to increase your "holdings" ... at a risk.
As mentioned by many above, use only what you are willing to lose.
Any other wallet which you have access to the private keys is in your control.
I saw an interview with the celsius CEO and he claims that they are able to give higher interest because they keep less of the profits from lending out money than the banks etc..
The thing is that the crypto related legislation is incomplete or even missing in many countries. Crypto is very easy to lose and in many cases one will not be able to clearly prove it was a hack or it was an inside job.
This being said, most won't risk their investment for some extra cents, especially as bitcoin itself gives much bigger returns that one could dream of.
Is this the future of financial system? Maybe. But we're not there yet. Don't forget that before a nice calm U.S. of A. there was the wild-wild-west...
I don't have a ton of crypto assets so wondering if it's even worth dealing with cold wallet.
If you don't have a ton of crypto assets, then you will earn just tiny amounts from BlockFi. As yourself is having a high chance of losing the entire investment worth it? Because crypto businesses have an ugly tendency of getting hacked or pulling exit scams.
Thanks for the reply, but isn't what you describe basically the modern financial system.
To a degree, but I'm not exactly super thrilled about the fact that banks operate with a zero reserve requirement and lend out all your money to make profits for themselves, while being bailed out when they mess up. They take all of the gains, while assuming none of the risk.The difference here is exactly that - bail outs. Banks have insurance, are covered by FDIC, can get the Fed to print and give them more money if they need it, will be bailed out by he government if they mess up, and so on. BlockFi/Celsius/whoever have none of that. If they mess up (of which there is a much higher chance since they are not subject to the same oversight as fiat banks), your money is gone.
Thanks for the reply, but isn't what you describe basically the modern financial system. I saw an interview with the celsius CEO and he claims that they are able to give higher interest because they keep less of the profits from lending out money than the banks etc.. I ordered a ledger nano X to experiment with, but I do find this to be an interesting discussion. from this perspective robinhood seems to be the worst actor, don't even have a way to transfer coins and no interest payments.
I've said this before, but it's always worth repeating whenever this question comes up. I suggest you go and take a look at the Terms of Service of these platforms and see just exactly what you are signing up for and just exactly what you are allowing them to do with your coins. Emphasis mine:
They both contain pretty much identical wording. Any coins you deposit to their platform will be handed out to a variety of unknown third parties in a variety of mechanisms (including investments and loans), be they individuals, businesses, exchanges, banks, anyone at all. The platform will not hold any collateral to cover your coins, and they won't tell you who they are giving your coins to. If one of those anonymous third parties defaults on their loan, wave goodbye to your coins. If one of those investment vehicles turns out to be a scam, wave goodbye to your coins. If they choose poor investments, wave goodbye to your coins. If one of the third parties goes bankrupt, or scams, or disappears, or ceases trading, etc., wave goodbye to your coins. You aren't just placing complete trust in either BlockFi or Celsius, but you are also placing complete trust in a variety of completely unknown third parties.
So, what happens if everything goes bad? Let's take a look. Again, emphasis mine:
Identical wording again. You cannot hold BlockFi/Celsius or any of these third parties responsible in any way whatsoever for loss of your coins. You deposit some coins and they lose them all making bad trades, loans, or investments? Oops. Their bad. You just have to suck it up and move on. Even if they take your coins and hand them to a known scammer, there is nothing you can do about it.
Given that bitcoin is currently sitting at 450% gains from where we were 1 year ago, is it really worth risking all your coins like this for ~4.5% gains?
Quote from: https://blockfi.com/interest-account-terms/
Except where prohibited or limited by applicable law, BlockFi has the right, without further notice to you, to pledge, repledge, hypothecate, rehypothecate, sell, lend, or otherwise transfer, invest or use any amount of such cryptocurrency, separately or together with other property, with all attendant rights of ownership, and for any period of time and without retaining in BlockFi’s possession and/or control a like amount of cryptocurrency, and to use or invest such cryptocurrency at its own risk.
Quote from: https://celsius.network/terms-of-use/
In consideration for the Rewards payable to you on your Celsius Account and the use of our Services, you grant Celsius, subject to applicable law and for the duration of the period during which the Eligible Digital Assets are loaned to us through your Celsius Account, all right and title to such Digital Assets, including ownership rights, and the right, without further notice to you, to hold such Digital Assets in Celsius’ own Virtual Wallet or elsewhere, and to pledge, re-pledge, hypothecate, rehypothecate, sell, lend, or otherwise transfer or use any amount of such Digital Assets, separately or together with other property, with all attendant rights of ownership, and for any period of time, and without retaining in Celsius’ possession and/or control a like amount of Digital Assets or any other monies or assets, and to use or invest such Digital Assets in Celsius’ full discretion.
They both contain pretty much identical wording. Any coins you deposit to their platform will be handed out to a variety of unknown third parties in a variety of mechanisms (including investments and loans), be they individuals, businesses, exchanges, banks, anyone at all. The platform will not hold any collateral to cover your coins, and they won't tell you who they are giving your coins to. If one of those anonymous third parties defaults on their loan, wave goodbye to your coins. If one of those investment vehicles turns out to be a scam, wave goodbye to your coins. If they choose poor investments, wave goodbye to your coins. If one of the third parties goes bankrupt, or scams, or disappears, or ceases trading, etc., wave goodbye to your coins. You aren't just placing complete trust in either BlockFi or Celsius, but you are also placing complete trust in a variety of completely unknown third parties.
So, what happens if everything goes bad? Let's take a look. Again, emphasis mine:
Quote from: https://blockfi.com/interest-account-terms/
You will indemnify and hold us and our affiliates harmless from any losses, damages, suits and expenses, of whatever kind, including reasonable attorneys’ fees, which we may incur in connection with or arising out of your use of your Crypto Interest Account or our activities in connection with such account, your violation of any law, regulation, order or other legal mandate, or the rights of a third party, or any act or omission by your agent, representative or third-party service provider while using your Crypto Interest Account, regardless of whether the specific use was expressly authorized by you.
Quote from: https://celsius.network/terms-of-use/
You agree to indemnify and hold harmless Celsius and its Affiliates, and their respective employees, managers, officers, directors, partners and shareholders from any losses, damages, suits and expenses, of whatever kind, including reasonable legal fees, that we incur in connection with or arising out of your access to or use of the Services, or our activities in connection with such Services, and for your breach of these Terms or violation of any law, regulation, order or other legal mandate, or the rights of a third party, or any act or omission by you or any person acting on your behalf while using your Celsius Account, regardless of whether the specific use was expressly authorized by you.
Identical wording again. You cannot hold BlockFi/Celsius or any of these third parties responsible in any way whatsoever for loss of your coins. You deposit some coins and they lose them all making bad trades, loans, or investments? Oops. Their bad. You just have to suck it up and move on. Even if they take your coins and hand them to a known scammer, there is nothing you can do about it.
Given that bitcoin is currently sitting at 450% gains from where we were 1 year ago, is it really worth risking all your coins like this for ~4.5% gains?
BlockFi/Celsius is paying interest on BTC and will store your bitcoin vs Cold wallet (more security, but no interest)
I don't have a ton of crypto assets so wondering if it's even worth dealing with cold wallet.
what are people's opinions on this?
I don't have a ton of crypto assets so wondering if it's even worth dealing with cold wallet.
what are people's opinions on this?
I find BlockFi/Celsius even more dangerous than - let's say a custodian web wallet.
But of course, it always depends on how you perceive those coins. If you want to risk them, it's really up to you. I have done my share of stupid things too when I was young into crypto. But if you want to keep them safe.. well.. keep them safe.
And for keeping your coins safe you don't necessarily need a cold wallet either, especially if you don't want to spend and you know (or are willing to learn) how to safely generate a paper wallet for long time holding.
I've said this before, but it's always worth repeating whenever this question comes up. I suggest you go and take a look at the Terms of Service of these platforms and see just exactly what you are signing up for and just exactly what you are allowing them to do with your coins. Emphasis mine:
They both contain pretty much identical wording. Any coins you deposit to their platform will be handed out to a variety of unknown third parties in a variety of mechanisms (including investments and loans), be they individuals, businesses, exchanges, banks, anyone at all. The platform will not hold any collateral to cover your coins, and they won't tell you who they are giving your coins to. If one of those anonymous third parties defaults on their loan, wave goodbye to your coins. If one of those investment vehicles turns out to be a scam, wave goodbye to your coins. If they choose poor investments, wave goodbye to your coins. If one of the third parties goes bankrupt, or scams, or disappears, or ceases trading, etc., wave goodbye to your coins. You aren't just placing complete trust in either BlockFi or Celsius, but you are also placing complete trust in a variety of completely unknown third parties.
So, what happens if everything goes bad? Let's take a look. Again, emphasis mine:
Identical wording again. You cannot hold BlockFi/Celsius or any of these third parties responsible in any way whatsoever for loss of your coins. You deposit some coins and they lose them all making bad trades, loans, or investments? Oops. Their bad. You just have to suck it up and move on. Even if they take your coins and hand them to a known scammer, there is nothing you can do about it.
Given that bitcoin is currently sitting at 450% gains from where we were 1 year ago, is it really worth risking all your coins like this for ~4.5% gains?
Quote from: https://blockfi.com/interest-account-terms/
Except where prohibited or limited by applicable law, BlockFi has the right, without further notice to you, to pledge, repledge, hypothecate, rehypothecate, sell, lend, or otherwise transfer, invest or use any amount of such cryptocurrency, separately or together with other property, with all attendant rights of ownership, and for any period of time and without retaining in BlockFi’s possession and/or control a like amount of cryptocurrency, and to use or invest such cryptocurrency at its own risk.
Quote from: https://celsius.network/terms-of-use/
In consideration for the Rewards payable to you on your Celsius Account and the use of our Services, you grant Celsius, subject to applicable law and for the duration of the period during which the Eligible Digital Assets are loaned to us through your Celsius Account, all right and title to such Digital Assets, including ownership rights, and the right, without further notice to you, to hold such Digital Assets in Celsius’ own Virtual Wallet or elsewhere, and to pledge, re-pledge, hypothecate, rehypothecate, sell, lend, or otherwise transfer or use any amount of such Digital Assets, separately or together with other property, with all attendant rights of ownership, and for any period of time, and without retaining in Celsius’ possession and/or control a like amount of Digital Assets or any other monies or assets, and to use or invest such Digital Assets in Celsius’ full discretion.
They both contain pretty much identical wording. Any coins you deposit to their platform will be handed out to a variety of unknown third parties in a variety of mechanisms (including investments and loans), be they individuals, businesses, exchanges, banks, anyone at all. The platform will not hold any collateral to cover your coins, and they won't tell you who they are giving your coins to. If one of those anonymous third parties defaults on their loan, wave goodbye to your coins. If one of those investment vehicles turns out to be a scam, wave goodbye to your coins. If they choose poor investments, wave goodbye to your coins. If one of the third parties goes bankrupt, or scams, or disappears, or ceases trading, etc., wave goodbye to your coins. You aren't just placing complete trust in either BlockFi or Celsius, but you are also placing complete trust in a variety of completely unknown third parties.
So, what happens if everything goes bad? Let's take a look. Again, emphasis mine:
Quote from: https://blockfi.com/interest-account-terms/
You will indemnify and hold us and our affiliates harmless from any losses, damages, suits and expenses, of whatever kind, including reasonable attorneys’ fees, which we may incur in connection with or arising out of your use of your Crypto Interest Account or our activities in connection with such account, your violation of any law, regulation, order or other legal mandate, or the rights of a third party, or any act or omission by your agent, representative or third-party service provider while using your Crypto Interest Account, regardless of whether the specific use was expressly authorized by you.
Quote from: https://celsius.network/terms-of-use/
You agree to indemnify and hold harmless Celsius and its Affiliates, and their respective employees, managers, officers, directors, partners and shareholders from any losses, damages, suits and expenses, of whatever kind, including reasonable legal fees, that we incur in connection with or arising out of your access to or use of the Services, or our activities in connection with such Services, and for your breach of these Terms or violation of any law, regulation, order or other legal mandate, or the rights of a third party, or any act or omission by you or any person acting on your behalf while using your Celsius Account, regardless of whether the specific use was expressly authorized by you.
Identical wording again. You cannot hold BlockFi/Celsius or any of these third parties responsible in any way whatsoever for loss of your coins. You deposit some coins and they lose them all making bad trades, loans, or investments? Oops. Their bad. You just have to suck it up and move on. Even if they take your coins and hand them to a known scammer, there is nothing you can do about it.
Given that bitcoin is currently sitting at 450% gains from where we were 1 year ago, is it really worth risking all your coins like this for ~4.5% gains?
isn't using the exchanges to store your crypto kind of like storing your funds with Vanguard or Fidelity, or storing money in a bank. Of course bitcoin is not FDIC insured but I'm kind of surprised the number of people who say cold storage is the way to go.
Vanguard is SIPC insured. Fidelity is FDIC insured.
Almost bank is FDIC insured.
BlockFi and Celsius is not insured by FDIC or other services, they only have SAFU to protect their users (usually it's only 5-10% proportion from their profit). Many people recommended to use cold storage since in the past there's a top exchange named Mt.Gox, but this exchange suffered bankruptcy and they can't refund their customer funds. It happen on 2014, it's a good lesson why you shouldn't trust centralized services.
I think you're favor to earn some % APY on bank, to be honest it's not profitable if you calculate how much the profit you get after you subtract with fees, charges, penalties, inflation etc etc.
Not your keys - not your bitcoin. That is short explanation for BlockFi and Celsius, custodians who are holding your bitcoin and they are somehow secured but not totally immune to hacks.
You can also lose your Bitcoin in personal cold wallet but that would be your own mistake with losing private keys and seed words, or if you get attacked and robbed.
I would always choose to keep majority of Bitcoin in secure cold wallet or multisig if you have more btc, and experiment with interest earning only in small percentage of your holding.
You can also lose your Bitcoin in personal cold wallet but that would be your own mistake with losing private keys and seed words, or if you get attacked and robbed.
I would always choose to keep majority of Bitcoin in secure cold wallet or multisig if you have more btc, and experiment with interest earning only in small percentage of your holding.
isn't using the exchanges to store your crypto kind of like storing your funds with Vanguard or Fidelity, or storing money in a bank. Of course bitcoin is not FDIC insured but I'm kind of surprised the number of people who say cold storage is the way to go.
Since I like to play it safe, I would go for cold wallet. And remember, even if you don't have a lot of crypto right now, it may be worth much more in a year or two.
Regarding Celsius/Blockfi, I know couple of people that are using the former with one big differnece from what you are planning to do; they didn't send there all they have, just a small percentage of their portfolio ( under 10% ). No matter how populatr some platform is, the fact is that if you don't own private keys, you don't own coins.
Regarding Celsius/Blockfi, I know couple of people that are using the former with one big differnece from what you are planning to do; they didn't send there all they have, just a small percentage of their portfolio ( under 10% ). No matter how populatr some platform is, the fact is that if you don't own private keys, you don't own coins.
Can you afford to loss all your coins invested in BlockFi/Celsius if they got hacked in the future? If you said yes, there you go... if not choose cold wallet. You own your coins, so you're the only responsible what you'll do with your coins.
It's worth to deal with cold wallet, even you wouldn't earn as much as BlockFi/Celsius but there's no chance you will loss your coins except you made your own fault (e.g. click random site, infected with malware etc)
It's worth to deal with cold wallet, even you wouldn't earn as much as BlockFi/Celsius but there's no chance you will loss your coins except you made your own fault (e.g. click random site, infected with malware etc)
The risks are pretty much are concerning potential confiscation and the likes, and the service's wallets getting hacked. Hence why it's not recommended to be depositing majority of your coins on such services. But if the coins you own is an amount that you don't mind losing, go ahead.
BlockFi/Celsius is paying interest on BTC and will store your bitcoin vs Cold wallet (more security, but no interest)
I don't have a ton of crypto assets so wondering if it's even worth dealing with cold wallet.
what are people's opinions on this?
I don't have a ton of crypto assets so wondering if it's even worth dealing with cold wallet.
what are people's opinions on this?
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