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Robinhood Reminder: Not Your Keys, Not Your Bitcoin

Robinhood Reminder: Not Your Keys, Not Your Bitcoin

Today’s largest information isn’t about Bitcoin, however as a result of the cryptocurrency and others commerce on the platform on the heart of the scandal, it’s a get up name for traders.

Robinhood as we speak halted buying and selling of GameStop shares and different shares, setting the web ablaze with anger. At the identical time, it ought to act as a reminder for individuals who use the platform for crypto market publicity of the phrase: “Not your keys, not your Bitcoin.”

Robinhood Halts Trading On Select Stocks, Is Their Crypto Service Next?

The phrase additionally extensively applies to all “cash,” however it’s Bitcoin that has taken heart stage in finance over the past yr.

Crypto property prefer it are secured behind a layer of cryptography. Each pockets consists of a public key performing because the handle customers make the most of to ship and obtain property, whereas a non-public key’s successfully the password to the account.

Read More:  More Than $220M in Bitcoin Withdrawn from Crypto Exchanges Since the Halving

The decentralized design permits for self-custody of property. But when customers purchase cryptocurrencies on an change and maintain them there, technically the change owns the non-public key to the pockets holding the property, and thus the phrase was coined.

Related Reading | How Bitcoin And Crypto Exchange KYC Could Be The Next Ledger Leak

When one other entity controls the non-public key to crypto property, they’re vulnerable to potential hacks or seizure. The platform the place the property are saved even have a layer of management over cash the person themselves really personal.

The solely method to make sure full possession and security of crypto property, is to self custody, ideally in an offline chilly storage pockets. This isn’t a fool-proof answer and plenty of crypto traders realized that the exhausting method, however that’s one other story.

This story as a substitute focuses on Robinhood, which provides publicity to cryptocurrencies, but doesn’t permit them to be moved off the platform in a pockets that the person themselves personal. Coinbase, for instance, lets customers transfer crypto freely to any pockets they need.

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No such answer exists in any way for Robinhood customers, who technically don’t personal any really cryptocurrency. The Bitcoin they suppose they’ve, is simply an IOU for BTC.

GameStop shares collapsed when Robinhood stopped buying and selling, leaving solely the choice to promote | Source: NYSE-GME on TradingView.com

Not Your Keys, Not Your Bitcoin: Move Money To Buy Actual Assets

As retail merchants are actually experiencing, Robinhood isn’t the free market they thought it was, and have had the power to purchase shares of GameStop and different shares restricted as a part of a a lot bigger controversy involving Reddit, hedge fund Melvin Capital, and plenty of different gamers.

At any given second, Robinhood may prohibit shopping for or promoting Bitcoin and different cryptocurrencies provided on the buying and selling app. The firm has already demonstrated that they’re prepared to bend when the powers that be demand it, and it may depart doubtlessly hundreds and even tens of millions of traders with out entry to cryptocurrencies.

Read More:  Wall Street Veteran Kickstarts Own Bitcoin Fund With $25m Investment

Related Reading | Centralized Wealth: The Downside To Institutional Bitcoin Buying

Admittedly, that’s a worst-case state of affairs that may be troublesome to think about taking place, however something is feasible in terms of the elite determined to take care of the management they’ve lengthy had and are actually shedding due to applied sciences like Bitcoin.

Those with crypto on Robinhood would possibly need to take into account promoting and taking the capital to purchase precise digital property they will custody themselves.

Featured picture from Deposit Photos, Charts from TradingView.com

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