Robinhood Crypto Wallet

 

What is The Robinhood Wallet?

History of Robinhood Wallet

Pros & Cons

Pros

Cons

Advantages

Disadvantages

UX Overview

Installation Tutorial

Security

How Robinhood Compares To Other Wallets

FAQ

Can you use the Robinhood wallet on PC?

What currencies does Robinhood wallet Support?

What are the things to know about the Robinhood wallet?

How useful is the Robinhood wallet?

Conclusion

 

What is The Robinhood Wallet?

 

Robinhood is not a very well known name in the cryptocurrency space. Ever since the company was founded in 2013 it has focused on the stock market slowly becoming the leading brokerage service for many retail investors. Eventually, this brokerage started providing limited exposure to the cryptocurrency markets as well, creating a need for their own wallet. In a sense, the Robinhood wallet takes an unconventional approach which we will discuss further down in this review. Custody and privacy aren’t at the same level as some competitors.

History of Robinhood Wallet

 

As already mentioned, the company started operating in 2013. It took a few years before they were able to offer cryptocurrency investing to their customer. Along those services came the Robinhood wallet that is free to use but probably not what you are expecting. The company itself was founded by two close friends Vlad and Baiju who were roommates at Sanford. They noticed that the stock market had a high barrier of entry and decided to do something about it. They are still working on solutions for cryptocurrency markets so updates and changes to the current version of the wallet can be expected.

Pros & Cons

 

Pros

 

  • Supports fiat deposits

  • Easy to use

 

  • Fairly secure

 

Cons

 

  • Limited cryptocurrency support and options

 

  • No anonymity

 

  • Users have almost no control over the wallet

 

Advantages

 

Similar to Coinbase, the Robinhood Wallet is connected to the Robinhood cryptocurrency exchange allowing users to swap between different cryptocurrencies with ease. The wallet supports most major currencies so trading between them will be easy for beginners. This could be outlined as the main strength of online “hot” wallets because they are the only ones that can enable in-app trades for now.

The Robinhood wallet supports almost all major cryptocurrencies including:

  • Bitcoin
  • BitcoinCash
  • BitcoinSV
  • Ethereum
  • Ethereum Classic
  • Litecoin
  • Dogecoin

 

Comissionless trading is the main selling point for the stock market Robinhood app and it seems that cryptocurrency trading comes with the same benefits. While other exchanges may take up to 1% of your trades, swapping between currencies with the Robinhood Wallet won’t come with added costs.

 

Another advantage that comes with using this wallet is that it is very simple to navigate and get used to. Those that already used Robinhood for purchasing stocks will encounter the same experience with the cryptocurrency wallet.

Disadvantages

 

Many online wallets face the same problem and that is security. Especially wallets that are associated with exchange because the coins you purchase aren’t yours unless you withdraw. As such, these wallets are prone to security breaches and even loss of funds. In the event that the exchange gets hacked or compromised in any other way, user funds would be at risk constantly. To be fair, the Robinhood wallet comes with 2FA protection, and users can add PIN codes for extra security.

 

While the exchange was founded in 2013 cryptocurrency services weren’t available until 2018. Alongside came the wallet which is very young and thus unappealing to many. This trustworthiness issue is constantly present in the crypto space because investors with larger amounts want to keep their cryptocurrency in a wallet with a good history and long standing track record. Since Robinhood took the spotlight in the Wall Street controversy in 2021, their applications and services took a big hit in terms of customer reviews.

 

Lastly, we need to look into the pricing model of the Robinhood wallet. According to some research, there may be some hidden fees that are not completely clear. This implies that “commission-free trading” isn’t as free as it was advertised but again when compared to other online wallets like Coinbase, users should end up paying fewer fees if they chose Robinhood.

 

UX Overview

 

Robinhood has a simplistic approach when it comes to design and the wallet seems to be following those guidelines. It is fairly easy to understand and navigate. Once you get used to the interface storing, sending, and exchanging cryptocurrency will become seamless.

The app is meant to keep things simple so it won’t overload users with unnecessary information. Many may argue that there should be more clarification on the ownership of the assets within the wallet, but that is an issue that still needs to be addressed by Robinhood.

 

Installation Tutorial

 

The wallet app is available for both Android and iOS and the installation process is no different than with any other app. The only requirement is that you either have an account with Robinhood or create a new one when starting up the app for the first time.

 

Security

 

The Robinhood wallet is constantly online meaning that it may need a lot more protection than hardware wallets. Right now, users can protect their assets with 2FA protection and PIN codes. User data, on the other hand, can only be protected by the service provider as it is also stored online.

 

As stated on their website, Robinhood stores most of the cryptocurrency in cold storage.

Cryptocurrencies that you purchase on Robinhood Crypto are stored in a mix of cold (offline) storage and hot (online) storage. The majority of your coins are held in cold storage, though some coins are held in hot wallets to support day-to-day operations.

 

Robinhood users are also partially protected by insurance so it is safe to assume that this wallet uses industry-standard methods of protection.

 

How Robinhood Compares To Other Wallets

 

The simplistic design that is embedded in the Robinhood crypto wallet puts it in front of the competition. When compared to Coinbase, there aren’t many differences except that Robinhood may be more appealing to newcomers.

The zero-commission trading fees are also a big advantage for Robinhood because not many brokerage services can live up to that promise. Again, there should be more clarification on that feature from Robinhood. Until then, on average, it should accumulate fewer fees overtime than any other cryptocurrency wallet that offers in-app trading.

 

“Instant” Robinhood accounts can gain instant access to their funds up to $1000. Further customer verification is needed for higher limits. Gold accounts are limited by their gold tier limits and may vary between different users. Funds can also be transferred from Stock and ETF accounts but they can take up to 3 business days before becoming available. It is easy to check user limits under the “Crypto Buying Power” option.

Not Instant

Purchasing cryptocurrency through the Robinhood wallet isn’t as instant as users may think. It is important to remember that Robinhood is a brokerage service so user orders are only forwarded further. This means that the cryptocurrency you seem to own isn’t actually in your account yet.

The general impression is that Robinhood still isn’t’ ready to advertise its wallet to the broader crypto community. When you try and look for additional information on this product there is hardly any on their website. Even finding the download links may be tricky so it is safe to assume their main focus is still the stock market.

 

Since the wallet is only a part of the Robinhood app it may be confusing at first, which puts it behind Coinbase that actually has a separate product. Navigating between stocks and crypto isn’t as easy if you aren’t familiar with the basics.

 

FAQ

 

Can you use the Robinhood wallet on PC?

 

It may be an online wallet but it won’t allow you to interact with Web 3.0 apps as the Coinbase wallet does. All funds are stored within the Robinhood app that can also be used for stock trading which makes it impossible to use in a Web 3.0 environment.

What currencies does Robinhood wallet Support?

 

Robinhood is constantly trying to expand its services but for now only the most popular cryptocurrencies are available. It is also worth noting that you can only trade cryptocurrency with Robinhood but you can’t actually withdraw it. It is clearly stated on their website that withdrawals are unavailable at this moment, meaning that the crypto you own on Robinhood doesn’t’ necessarily need to be crypto. To be completely clear, you are trading the price fluctuation of a specific cryptocurrency, not the actual coin or token.

 

What are the things to know about the Robinhood wallet?

 

It is easy to overlook the fact that the Robinhood wallet isn’t a conventional cryptocurrency wallet per se. In fact, it is more comparable to the cryptocurrency services offered by Skrill than it is to the rest of the crypto industry. When you purchase a cryptocurrency and store it on Robinhood you are not the owner of that actual cryptocurrency, Robinhood is. They do store most of the user funds in cold storage but you never know if they have enough reserves to cover all user needs or not.

Due to other legal implications, depositing cryptocurrency into your Robinhood wallets is also not a possibility. Only the crypto purchased via Robinhood can be stored in the wallet.

 

How useful is the Robinhood wallet?

 

Advanced cryptocurrency users probably won’t find this wallet very useful due to the limited functionality that comes with it. Beginner investors, on the other hand, may find a way to utilize it in one way or another. Those that just got into investing can now move away from stocks and give the crypto industry a try. It is also easier to invest in crypto for existing Robinhood users since they now have a new way to access the crypto markets. At the end of the day, those that want to invest small amounts of fiat will have a great experience with the Robinhood wallet. Everyone else may need to look for alternatives.

 

Conclusion

 

Comparing the Robinhood wallet to any other similar product is hard because it is unique in so many ways. Cryptocurrency and blockchain focus on user custody and improved ownership but Robinhood seems to be taking a different approach. Storing, trading, and investing in cryptocurrency will be easy with this app but it comes with a lot of downsides. Many will find it frustrating that you can’t actually withdraw your crypto assets while also being unable to deposit them into the wallet.

On the bright side, those that are looking to get into crypto without too much exposure will find the Robinhood wallet more than useful. Getting into crypto with as low as $10 has never been easier. The only downside is that they can only withdraw fiat money but we should expect this to change as Robinhood continues to evolve as a brokerage service.

The bottom line is that Robinhood can still be praised for the simplistic design and ease of access to crypto markets. The wallet may be lacking the ownership elements but those that don’t care about it too much can still invest in the crypto markets thanks to the Robinhood wallet. Beginners and experts alike will find it easy to navigate and use and we all know that convenience plays a big role for today’s consumers.

 

 

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