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@matt_odell was asking about this and I didn’t want to spam the fuck out of his mentions, so here’s my story about @realblockfi
What I woke up to March 12
What I woke up to March 12
On March 12th my BlockFi loan was almost liquidated. Here’s what happened.
(I don’t tweet a lot, so sorry if I fuck this up)
(I don’t tweet a lot, so sorry if I fuck this up)
A bit of context. I retired in July 2017 (well, I still call it sabbatical) and have been living on my bitcoin. I can and I am — so many of you don’t seem to consider this possibility.
Of course I would rather not sell my bitcoin. For me, BlockFi offers a very attractive proposition. If it works, I can get some filthy fiat to spend on the big tiddy hoes and not have to sell my preciouses.
Im not the sharpest tool in the shed, but felt there were a couple of risks:
1. BlockFi exit scams
2. Bitcoin price tanks
I’m sure there are others, but those concerned me most.
1. BlockFi exit scams
2. Bitcoin price tanks
I’m sure there are others, but those concerned me most.
Eventually I came to the decision that:
1. They were both quite possible
2. I could at least hedge them both enough that I felt comfortable-ish.
My approach was allocating only a reasonable portion of my holdings, about 1/3 is what I settled on.
1. They were both quite possible
2. I could at least hedge them both enough that I felt comfortable-ish.
My approach was allocating only a reasonable portion of my holdings, about 1/3 is what I settled on.
If they exit scam, I’m screwed, but felt I would still be holding enough to continue my life unchanged.
If the price tanked, I had enough held back to prevent a margin call.
If the price tanked, I had enough held back to prevent a margin call.
Of that 1/3, I used 2/3s for the loan and put the other 1/3 into an interest bearing account. Partly to offset the loan cost, but also to have extra collateral handy.
March 12 I woke at 6 and saw a bunch of notifications (see above). As averse as I am to actually calling anyone, I picked up the phone and dialed support as I dug out my Trezors.
They only operate 9-5 or whatever and weren’t there.
They only operate 9-5 or whatever and weren’t there.
I emailed them some things
To their credit, they got back to me within minutes. I transferred the interest account holdings to the loan collateral and got to a safe LTV. However, later that day the price did its little $3,800 whoop-de-doo and I did have to send some extra to keep solvent.
I haven’t moved anything since, but once we seem reasonably stable above 10K will probably reallocate some back to an interest account. I sent them some suggestions, which seemed well received:
Regarding the last point, I forgot to mention. When we crashed to $3800 and I had to transfer from outside, they don’t show the pending transaction in their UI.
The @realblockfi support was fantastic, thank god. If they had auto sold in the middle of the night, this would have been a very different story. But here’s why all this might be worth the risk (for some of us):
• I still haven’t sold any bitcoin this year
• If number goes up enough this year, I can refi with the same (or less) collateral ... potentially forever.
• If number goes up enough this year, I can refi with the same (or less) collateral ... potentially forever.
And the risk of getting called, for me, is that I sell early. Previously I was selling ‘as little as possible, as late as possible’. If I’d been called, I would effectively have sold way earlier than I had to, losing any potential price gains.
If you aren’t living on your holdings and just want to enjoy your gains a bit, the entire risk/reward will probably look different to you. But for me, so far it’s doing great.
(How’s that thing go... feeling cute, may delete? This whole account...)