Robinhood - Expanding Bitcoin or Holding it Back?

So, digging a bit deeper into Robinhood, I’m wondering about something that maybe y’all can help with.

Under the hood, Robinhood looks innocuous, but a deeper look we clearly see that you’re NOT ACTUALLY BUYING Bitcoin, rather more like a bank, offering a receipt or IOU for the Bitcoin.

This means that you’re not actually TRANSACTING Bitcoin or alt-coins, meaning one of two ideas:

1 - You’re not using Bitcoin as a transaction, as a currency

or

2 - You’re only using Bitcoin (the entity) as a base for investment

If we argue that Bitcoin is (supposed) to be used as a currency, a transaction mechanism, then Robinhood could be considered a “bad idea” overall for BTC.

If we argue that Bitcoin is (supposed) to be used as a store of value, then Robinhood “helps” do that in a banking-kind-of-way.

So the question? Do exchanges like Robinhood help adoption and expansion of Bitcoin? Or are they just creating a layer above Bitcoin like GBTC… or ETF’s which… I’ve talked about numerous times (They are coming).

Until Robinhood lets you deposit and withdraw Bitcoin, I don’t see this as an exchange, but rather a controlled apparatus on top of BTC to use as leverage… Good or bad?

Let me have it.

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Yea, I agree with you.

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I raised this concern since Day 1 when Robinhood made this announcement. I was actually surprised that no YouTubers or content creators picked up on that.

The reality is that Robinhood made no disclosure of whether a person would actually OWN BTC/cryptos on his/her own. There was no information on:

  1. Deposit and withdrawal
  2. Segwit or not
  3. Any interaction with the blockchain

Based on Robinhood’s limited announcement, I suspect that a user can specify a quantity (e.g., 0.023 BTC) and will be charged based on the current market price. So, users will still be relying on Robinhood’s bookkeeping, and are at the mercy of Robinhood’s viability (a.k.a. banks!). So, if Robinhood decides to log users off from their accounts, users will be out of luck.

While the user interface will be slick and simple, users WILL NOT have total ownership of their cryptos.

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Centralization.
Meaning, your value is safe as long as Robinhood is safe (and not taken offline).

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Nonetheless I do feel it’s great for the cryptoverse. It will help with adoption. I don’t think the noobs even care whether or not it’s centralized. They’re just glad they got their skin in the game. And for that I’m glad. Just my 2 cents and ain’t worth 2 cents. :grin:

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Yes! Who doesn’t want the SWEEEEEEEEEEEEEEET, JUIIIIIIIICY slice of pie??? :pie::pie::pie:

But on the meta-level, this is a huge gain for the cryptospace!

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From what I’ve researched, you can’t withdraw and transfer any crypto you bought. Just the USD amount. Yeah, I’ll pass. Good for noobs who would rather not learn how to transfer from wallet to wallet. Not sure about adoption, though.

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Hard pass for me… But exposure is exposure. Hopefully it brings in more people who otherwise wouldn’t think of investing in crypto.

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Peter, I can’t stop hearing your Steven Carroll “Oh god no!” sound effect here! So people are already trying to “embrace and extend” Bitcoin back into the fractional reserve dark ages! Arggggh!

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Man, this is why we need a decentralized exchange!

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Robinhood is built just like all the other exchanges. Coinbase, Bittrex, Binance, not withstanding. You’re not buying any of the currencies directly when you’re on these exchanges. You’re interacting with virtual wallets and off the blockchain.

It’s only when you can deposit and withdraw the tokens to your own wallet that your virtual wallets hit the blockchain and you get the real deal.

From a technical perspective, the only thing separating Robinhood from all the other exchanges is lack of withdrawal as you pointed out.

Logistically, I say Robinhood helps with the adoption rate, but I would probably never utilize their platform like this barring some convenience factor I haven’t considered yet.

The early adopters on Robinhood that first give it a passing interest will get serious if their money grows substantially, realize they need to be in offline wallets and then will venture to the next step.

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just curious how many of you use coinbase for long time?

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I do. Long time fan. Joined in 2014 I believe…

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Conspiracy time: banks paid Robinhood to implement Bitcoin purchases as they are now (no withdrawals, possibly no interaction with the Bitcoin network itself). When a decent amount of people buy bitcoin through Robinhood, the funds suddenly disappear. They blame it on the Bitcoin network which scares the public away from bitcoin.

:tinfoilhat:

Disclaimer: This sounded better in my head

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Coinbase was my “on ramp”

I’m also set up on Gemini and Kraken as means of moving fiat into cryptos, which has been useful in times when one site or another is down and I want to execute a new order.

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Lol. Haha, gotcha’ bitch.:joy:

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Yeah Robinhood is a piece of Sh:$:$t. I deposited 500 dollars usd when I signed up. Still can’t trade crypto yet now I want transfer the money back to my bank it is disabled. So what kind of service won’t let me get my usd back to my bank. They certainly lost me as a customer

And my money is being taken hostage by robinhood. I guess with name like robinhood how can you trust it we all know the story

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I think there is a withdrawal fee of $25 if I recall correctly. Avoid like the plague.

Edit: $25 fee is for wire transfer ACH doesn’t have a fee.

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Hey Everyone,
Been watching DCTV for a couple months now and well… I’m in brothers and sisters. Peter - John, you two remind me of my own brother and I . Hard working mfers—> (.) My opinion on Robinhood is that it is a very very good application for the future of Crypto. I’ve seen Robinhood bring in young and new stock market customers. It’s the gateway data dump #adoption

Erik~

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does robinhood exchange trade real BTC or is it something fishy?

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