Hey, hi, how are you Bitcoin world!
Welcome to another day of mostly Cryptocurrency things!
Today we are going to talk about the long awaited and very much hyped Blockfi service soon to come out.
The World's FIRST Bitcoin Credit Card!
Is this truly the first Bitcoin Credit Card?
Technically no it is not.
Sorry if that takes the fun out of things for you but I can't help it if its true!
While this may be a super huge and long awaited ordeal.
It is most definitely not the first of its kind by any means.
However!
The reason why it is being called the first of its kind is what should be catching people's attention more.
Probably exactly why the peeps at Blockfi market it this way because it deserves the praise.
If it isn't the first, what makes it so special?
That was my first thought exactly!
Many of you may have already been using something similar or at least heard.
There are other cards out there such as Crypto.com's Debit Card or the more recently revealed Cash App Card features.
Outside of the US there are things like Ternio, Swipe, Bakkt, and I'm sure a few others I am unable to remember off the top of my head here.
However!
None of these are truly what someone would consider a "Credit Card".
Many of us are aware of the differences between Debit Cards and Credit Cards so I will not go into those details here.
Most of the options you are thinking of are technically "Pre-paid" Debit Cards.
They award you in Bitcoin, or CRO, or SXP, whatever you may be going through now.
If you are lucky enough to actually already have a Bitcoin Credit Card then good for you!
You are way ahead of us ??
What makes this Credit Card from Blockfi so special is the fact that it is the first of its kind offered to US Residents.
I hate to say it but what makes it special is the fact that it is now being offered somewhere where it is typically not known to be possible!
That place just so happens to be the wealthiest and most sought after market on the globe.
Offering a legal mainstream option for investors to get access to Bitcoin through Credit is a retail game changer!
The people at Blockfi have taken their time with launching this one and look to be on track to getting this right the first time.
This move was also timed perfectly for Blockfi to pave the way as one of the industry's main leaders right out of the gate.
Leading by example, this will give Blockfi and Bitcoin the much needed spotlight it has long deserved.
What else makes it special?
There are actually not many details or specifics on this offer from Blockfi just yet.
Their Twitter feed seems to be the best source for waiting for announcements if emails aren't your thing.
So the details we have so far are sparse but with a little bit of footwork and heavy-thinking we can sort of gauge how this might end up working.
What we know so far!
- Blockfi plans to start offering Q1 of 2021
- Blockfi customers must join a Waiting List to get their offer
- That Waiting List is still open!
(Use my referral https://blockfi.com/?ref=b2db60a1 to sweeten the deal if you haven't signed up yet! ??)
- There are no details on when the Waiting List will expire or end with available spots
- An FAQ for details is being created by Blockfi to help with answers but unreleased at this time
- The company continually reaffirms this will be an actual "Credit" Card meaning there will be a line of credit attached
- The company states the Credit Card will pay you back in Bitcoin
- There are no details on how Bitcoin is rewarded for using a Blockfi Credit Card
- As of today January 3rd, 2021 there are no known owners of this new Credit Card service reported
- People on the wait list may have already received emails detailing their next steps to claim their Credit Card
- Availability or Wait List size is unknown
- Blockfi is pretty much a sister company of Gemini who recently tightened relations with VISA through a recently announced global partnership for "Digital Assets"
Whew nelly!
That seems like a lot but it really isn't a whole lot.
Alerted to these over the weeks and months and so on have led me to the details above we know so far.
However!
Until they make more official announcements we can only work with what we have hence the jam-packed article ??
What can we expect from Blockfi?
Bold question!
Bold moves call for these types of questions though and if Blockfi cannot deliver it could be troublesome.
For a company backed by the Winklevoss Twins (sorry, had to mention it!) we should expect a lot!
Given what we know about Blockfi, its great reputation, and how it has handled recent times.
There is no doubt in my mind that this will not be a deal that falls flat on its face very easily if at all.
That sort of depends on how the Credit Card will work which we have no EXACT details on.
Except that with some clever pretending we might be able to guess how such a thing will work.
For starters, we need to go over what to expect!
- An Actual Credit Card
- Release date on or before April for most people
- A Frequently Asked Questions page FAQ
- A Credit Line is attached in some way
- Rewards
- Last but not least, Bitcoin!
We expect Bitcoin!
The demand for Bitcoin is real folks!
Have you seen how much Bitcoin is worth lately?
I'm so scared I have legitimately stopped looking at the price for fear I might crap myself.
Anyways!
One thing every Blockfi customer should expect from this Credit Card announcement is Bitcoin.
Literally the exact reason that got us all here in the first place is Bitcoin so if there is no Bitcoin it is no good.
I think we can safely say there will definitely be Bitcoin involved if they are straight up telling us we will get Bitcoin for using it.
So we can expect an actual Credit Card that gives us Bitcoin for using it...
How would something like this work?
No there is no Crystal Ball here for me to tell you exactly how this will work.
So this will largely be experimental trying to show ways this "could" work!
That way those of us who are interested can better prepared for how it will actually work once it comes out.
Gotta stay prepared people!
The easiest way out of this question is to compare to other places but that's boring.
So I will do the boring part really quick to get that out of the way!
Just compare what Blockfi is competing with in the Bitcoin/Crypto market.
There really is not that much competition!
What little there is involves some pretty interesting hoops and mental hurdles someone has to get over first.
Get over those things and our comparisons really only come down to a few things.
- Interest Rate Percentage
- Type of Currency
- Terms of Use
So with other comparable options out there we are not really interested in anything else but these 3 things.
These few things are what is most important in regards to how it benefits us, the people who will be using it!
Type of Currency I will go over first because it can be easily assessed.
The end all be all currency is whatever your native currency is which for most people tends to be USD.
It doesn't really matter what we are doing just as long as we get what we came for which is the money!
So the point I am trying to make here is that when we look at these few things we don't really need to focus on the Type of Currency so much.
At the end of the day it only matters what I can actually use where we are living or going.
With that out of the way we can look at both Terms of Use and Interest Rate together.
We have to look at them together to better understand because they go hand-in-hand with each other.
This is because getting issued a card is considering using the card.
So whether you end up using the Credit Card or not it still ends up getting used by you the moment it gets activated.
This is when your Terms of Use and your Interest Rate kicks in!
It is extremely important you understand how you will be planning to use the card and how it will have an impact.
This is because since it is an actual Credit Card there is a credit line attached of some kind.
Signing up for this without fully understanding could potentially set you up for a bad time later on in the future.
To understand that better we must understand how a Credit Line will be attached.
After that we will know better what to expect!
This is going to be a wild guess just for example related purposes.
Pretend we get the email saying we got approved for the Bitcoin Credit Card.
It is literally on its way in the mail going to arrive any day now!
Inside of our Blockfi account we have the regular account we are use to using just sitting there gaining interest.
With this Bitcoin Credit Card we now have it attached to our regular Blockfi account.
Now!
We know we have two accounts with Blockfi basically.
1. Our regular account for Blockfi holdings
2. Our credit card account attached to regular account
Our regular account still does everything it has always done!
That account continues to grow based on what you already own.
Our credit card account on the other hand is attached to the regular account giving us a line of credit.
So normally with a Credit Card our line of credit is attached to our credit history like in the US for example.
This line of credit attached to our history is a drag because there are negative things on credit history that are arguable.
With this line of credit on Blockfi however, it is not attached to your credit history!
It is attached to Bitcoin or Cryptocurrency you already own.
Does that still make it an actual Credit Card though?
Yes! In fact, it makes actual Credit Cards better.
In general it makes credit overall better and opens up a whole new area of escape for people.
Escape for people that are in debt or just looking to build up their portfolio!
Which makes it a huge ginormous and exactly why I am taking the time to write about it to you here.
It opens up a whole new portal of risk in US market that badly needs the help.
But!
With risk comes dangerous obstacles to overcome and that is why it is important to understand the Terms of Use.
Since the Line of Credit will most likely be attached to your holdings rather than your actual credit history.
It provides another way for you to get sucked dry of all your hard earned time and money.
So I cannot stress this enough!
Be smart, be frugal, and don't go overboard!
Get on with it Trevor! How could this work?
Again, only guessing and using competitive numbers here so be on the lookout for an actual announcement from Blockfi soon.
But!
If someone forced me to provide an example beyond my will this is what I am thinking will occur.
1. Using the Credit Card will "help" you get more Bitcoin every month with Blockfi
2. Not using the Credit Card will not "help" but it also will not hurt your holdings too bad
3. To be eligible for a Credit Card a Blockfi account must hold a value of around $10,000 upon signing up
4. Using Credit rewards you in Bitcoin ONLY if you pay off your credit on time
5. Credit frequency is monthly to align with monthly Blockfi payouts for regular accounts
6. Rewards & eligibility are for Bitcoin holdings only (at first at least)
7. The penalty for not paying off credit could be laxed in a small timeframe but steep if left long term
8. There is an annual fee for being issued a Credit Card that could be waived if certain requirements are met
9. Credit Cards will be issued by VISA and usable anywhere a regular Credit Card can be used
10. Cards won't be fancy metal just regular plastic
11. There is a fee for losing the Credit Card and needing to be reissued
12. Blockfi will only provide email support for Credit Card support with things like claims or reports of cards being stolen
13. If Bitcoin is rewarded back per purchase it will be based on a Tier system
14. If Bitcoin is not rewarded back per purchase it will be rewarded in the form of better monthly payout rates on regular account holdings
15. The percentage according to their Twitter is still 1.5% back on purchases
(https://twitter.com/BlockFi/status/1333771314792779777?s=20)
16. Not meeting conditions or paying back lines of credit will result in a loss of holdings from your regular account
17. They will have NFC and connectable to things like App Stores
18. Rewards might only be for purchases at certain Blockfi affiliated partners
19. Support for the product will be limited after it is fully launched
20. It will not help your regular credit history but that could change
All subject to change and mostly skepticism!
Whew nelly again!
Going to quit while I am ahead so I don't accidentally end up writing their whole terms of use for them ahead of time ??
I think that helps sum up a lot of what we can expect to see coming soon from the people at Blockfi.
All skeptical of course!
But I am willing to bet this will be a pretty accurate forecast of what is to come.
To be honest too, this would sort of be a worst case scenario list of expectations too.
Anything that has to do with money like this is considered really risky so I would want to make sure I prepare for the worst case scenario.
Just in case things end up worse or better!
Forecasting that ahead of time with such a bold announcement from Blockfi helps big.
For example, I predicted here that this will obviously require some type of threshold for account holdings.
Obviously you can't just have an account with nothing in it and expect to get a Bitcoin Credit Card.
You are probably going to have to have some Bitcoin to even start doing this.
I predicted you would probably need about $10,000 worth of Bitcoin to participate.
I predicted that on purpose because they probably sat down in a meeting one day and actually considered making that the true threshold.
It very well could end up being a very high amount like that for them to even be able to offer this service in the US!
We will have to see how Blockfi wants to push the edges of the SEC with that one but for now.
Worst case I am thinking if you don't have an account worth anything more than $10k USD.
Then you are probably not going to get a credit card for awhile.
That is worst case though!
And I am not trying to be a total downer here.
Just doing my job trying to keep you informed and prepared is all!
To be honest, based on how they are hyping the service and allowing pretty much anyone to join the waitlist.
They themselves don't even know yet!
But!
They are signaling the fact that they would like to offer it to as many people as possible.
Since this will be an "actual" Credit Card it will have to work like a "secured" credit card.
This is because your line of credit will be secured by your regular account holdings.
Technically if they wanted to they could offer a really low threshold of something like only $500 to be able to have the card.
It could potentially even be a moving threshold too.
Meaning your line of credit is literally the total amount of what your regular account is worth at any given time.
If your account was worth $1000 one day then on that day you had a credit line of $1000.
The next day that line could be more or less depending on what is available in your regular account.
So your line of credit fluctuates instead of being set.
In any event, since this will be tied to Bitcoin in some fashion there will likely be some fluctuation.
Fluctuation is always far out bro so that's okay with me!
But if Blockfi can navigate these expectations cleverly and truly offer a game changing service for Bitcoin.
This could really be what it takes to give Bitcoin that next little push into more people's pocket books.
I have my fingers crossed hoping Blockfi has what it takes and so far things are looking on the up-and-up.
Worst case, it isn't worth the time and no one uses it!
Then it will only lead the way for others to capitalize off of another soiled adventure.
My eyes are peeled for announcements and I have something ready to go for when details drop!
So be sure to Follow and be on the lookout for more information soon.
Thank you so much for reading and Happy New Years 2021!
Thank you for reading!
https://www.trevorbalthrop.com
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Follow on Twitter if you dare!
@Trevor_Balthrop
https://www.twitter.com/trevor_balthrop
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