Coinflash – Maybe the worst way to buy Bitcoin

Today was a terrible day for Bitcoin and nearly every other Crypto-currency. Still, there has been a tremendous rally as of recent, and many have gotten rich off of Bitcoin speculation. I firmly believe Crypto-currencies are NOT a passing fad, and I also firmly believe that many of you could benefit by learning how to get your own. I even plan on teaching you one of the simpler ways to do so, but not today.

Today I am here to tell you what NOT to do. DON’T USE COINFLASH!

Coinflash is an “app” that works in a similar style to the investing app Acorns. The premise is brilliant! – Link a credit/debit card and a checking account to the app. Every time you make a purchase on that card, the app will “round up” to the dollar and gather that spare change total. Then, after a certain period of time that you set, it takes that total out of your checking account and invests it in Bitcoin via the CoinBase wallet. Think of Coinbase as a bank that opens a checking account for you to store your crypto-currency in.

OK, so if that seems like a lot, it boils down to this.

1. You spend with your credit card as you normally do.
2. The app totals a bunch of numbers over, say, a week.
3. The app deducts that total from your checking account (you are NEVER charged anything on the credit card) and MOVES that money to a Coinbase checking account.
4. The app uses that CASH to buy Bitcoin.

Here, maybe this picture will help:

For this service, Coinflash charges a fee. I believe that fee is currently $1/month, which is actually super reasonable for a set-it-and-forget-it-service. Initially, I thought this was an AWESOME way to sneak into owning my own Bitcoin through Dollar Cost Averaging. Through this app you can change just a few dollars a week into Bitcoin, without ever really thinking about it, and grow your bitcoin account.

Here’s the problem: Coinbase charges you a fee as well!

Again, a picture, to illustrate my point:

Let me break down what’s happening here.

• I set my Coinflash App to take my spare change and change it into Bitcoin and Ethereum (another type of Crypto-Currency) each week.
• On week 1 I had $9.58 worth of “spare change.” Coinflash split that in two and exchanged each for some Crypto-currency.
• For each exchange, COINBASE charged me $0.99. That means that on week 1, over $1 out of every $5 I exchanged disappeared as a fee to Coinbase. Over 4 weeks I changed $47.44 into bitcoin and ethereum, but was charged $8 to do so.
  • That’s like going to a bank, giving them $100 to deposit, and having them charge you $20 dollars to hold it for you, leaving you with only $80!

Why would you literally throw away your cash like this?

1. You didn’t know it was going to happen – Coinflash doesn’t make it clear that Coinbase (a SEPERATE COMPANY) is going to charge you additional fees.
2. You don’t know how to exchange your cash for bitcoin for free.
   1. More on this last one ina later post.

So in the end, my advice to you? Stay away from Coinflash and other “spare change” investment apps. Oftentimes the fees overcome the earning by a lot.