Coinbits is a new service launched by Bitcoin wunderkind Erik Finman (he bought Bitcoin when he was 12, which made him a teen-millionaire)
In an interview with MarketWatch, he said,
"The goal of the application is to make cryptocurrency not just more accessible… but to make cryptos and blockchain technology tangible and more tactile,...”
Coinbits works like this:
Everytime you spend money "in the real world", your purchase will be rounded up to the nearest Dollar, and the different is invested in Bitcoin for you.
So if you buy a Latte at Starbucks for, say, $3.80 - the app would round it up to $4 and invest $0.20 for you. All you have to do is register your credit or debit card with Coinbits.
Not a bad idea! Not a new one, either - apps like this have been around in the fiat world for quite a bit - but I haven't been aware of a crypto version that aims to make things so easy and convenient.
Since I'm always on the lookout for "easy and simple" solutions, especially for crypto beginners, I took a closer look at Coinbits.
Here are some of my findings:
Pro's
- You get to invest in cryptocurrencies without even noticing. Especially for new investors or people who don't want to deal with money or trading/investing every day, that probably sounds very attractive. And even for seasoned investors, this could be a nice additional way to Dollar-Cost-Average your investments - even though in tiny amounts.
- They have a strong partner: Coinbits works with Coinbase, for offline storage of the funds
- You can earn $5 in Bitcoin for referring your friends - and they will also receive $5 as a welcome gift.
- Since the platform only just launched, there's a big potential to be one of the first affiliates and make a nice little passive income.
Con's
- Heavy KYC: Of course - any fiat gateway comes with KYC requirements, plus you're going to have to link all your cards or bank accounts from which you regularly make payments. Be conscious of how much info you're giving away about yourself.
- Only available in the U.S. at the moment, but global roll-out is planned, and you can actually contact support to get on the waiting list for "early global adopters".
- You can only invest in Bitcoin at the moment, but other currencies are planned for the future.
- The costs - with a flat fee of $1 (per what?? not quite clear...) it's important to review whether it's actually worth it or not, depending on the amount you're saving per day or week.
- You can't cash out your Bitcoins. You will have to convert them to USD in order to withdraw your funds.
That last part would be the main con for me, besides the KYC requirements. But I guess, you could still benefit from a price increase of Bitcoin over time.
My conclusion:
I’m happy for people to have an easy way of investing, but this app basically functions like a bank - at least in this current first version.
So it's not really supporting the crypto spirit and teaching people how to deal with cryptocurrency, however looking at it purely from an investment point of view, it will make a difference and very likely outperform the interest people receive for their savings in the bank. This is a good thing.
This article was previously published on Publish0x.
About the author:
Anja Schuetz helps absolute beginners to become confident crypto investors and create a Plan B for their financial future. She also consults as a Customer Communication & Operations Manager for blockchain start-ups.
Anja offers a Free Bitcoin Beginner's Course when you sign up to her Conscious Crypto Museletter here: http://anjaschuetz.net and has also written a Beginner's Guide to Steemit
