Once people first get bitcoin, they try to look for ways to earn more bitcoin in the form of interest, similar to how you would earn interest in a bank.
What people need to understand is that the bitcoin protocol does not have ‘interest’, it simply does not exist in bitcoin. This is exactly the same as with any currency…there is NO interest if you have Rand or Dollars either, it does not exist.
What DOES exist, are companies and institutions who will pay you interest if you deposit your Rand, Dollars, or in this case, your cryptocurrency with them. Just like a bank pays you interest on your deposit, which they can use to generate revenue, there are cryptocurrency platforms that are offering the same service using your crypto deposits.
Open a Crypto Interest Account to Earn Free Bitcoin
With a BlockFi Interest Account (BIA), your cryptocurrency can earn up to 6% APY, the interest accrues daily and is paid monthly. This means that after a year of compounding monthly, you would have earned a total of 6% in interest. (Join BlockFi here)
let’s say you deposit 1 Bitcoin on February 28, 2021, earning 6% compound interest annually. On April 1 your new balance 1.005 BTC. And just like that, after 31 days, you earned 0.005 in Bitcoin interest. At the end of 12 months of storing your 1 Bitcoin, your new balance would be 1.062 Bitcoin
Users can create a new BlockFi account in as little as two minutes, and there are no minimums to earn interest, with your interest being calculated from the day you deposit.
BlockFi will pay you interest on a variety of different crypto products that they support. Bitcoin being 6%, going all the way up to Tether, which they will pay you 9.3% per year!
Can you add more funds to your interest account?
If you add additional crypto to your BlockFi Interest Account, your interest will compound on the new balance. For example, let’s say on May 1st you deposit 1 BTC and then on May 15th you deposit an additional 1 BTC, bringing your total balance to 2 BTC.
From May 1st – May 15th, you will earn compounding interest on the original deposit of 1 BTC. On May 16th you will start earning compound interest on your new balance of 2 BTC plus any interest earned in the first half of the month.
Can you get interest paid in a different cryptocurrency?
In the case that you’d like your compound interest to be paid out in a different asset than the one you deposited, BlockFi offer Interest Payment Flex.
With Flex, you can hold crypto in your BlockFi Interest Account and get all of your interest paid out in the currency of your choosing. This allows you to easily diversify your assets without having to buy new crypto.
How can BlockFi can afford to pay interest?
Please be aware that there are many fake and scam company websites that offer daily interest as high as 1% daily. These kind of websites are scams that are lying to you to get your bitcoin. Do not fall victim to High Yield Investment Products on scam websites!
With BlockFi, the source of funds for the interest paid to members comes from the fees charged to the people and companies borrowing crypto from BlockFi at a higher rate.
BlockFi pays interest to you from the funds it earns from lending your crypto to large trusted institutional and corporate borrowers in the crypto space. These loans that BlockFi make to these companies are generally over-collateralized for the protection of your funds.
BlockFi also uses a robust automated risk management system to continually oversee its financial positions. Additionally, BlockFi Interest Accounts are prioritized ahead of the company’s capital. That means that your money is protected behind that of the company. In the event of a financial reversal, BlockFi would absorb a monetary loss before you would.