Robinhood Expands Wallet Access, Enabling Millions to Now Take Ownership of Their Crypto
Before Thursday's rollout of Robinhood's digital wallet, Robinhood was the de facto owner of the crypto assets that individual users had purchased on its app -- that has now changed.
- On Thursday, popular digital asset trading app Robinhood announced a massive expansion of its wallet to 2 million individuals on the waitlist.
- That means millions of wallet holders can now take custody and ownership of those crypto assets previously held in custody and "owned" by Robinhood. The wallet prototype debuted in January 2022 for a thousand users, and deployed fully Thursday.
- All eligible waitlist customers can now send and receive any of the cryptos currently available on Robinhood, but the wallets do not yet support non-fungible tokens (NFTs).
In a statement issued Thursday, popular digital asset trading app Robinhood announced the immediate availability of its long-awaited digital wallet to more than 2 million eligible individuals who had joined the waitlist for that wallet feature last fall.
This is a big deal because one of the biggest criticisms of Robinhood was that before the digital wallet was available, anyone who bought cryptocurrencies on that platform could not take direct ownership of those digital assets. Those virtual currencies stayed on the Robinhood app, unless the purchaser converted the crypto back to U.S. dollars -- but that missed the main benefits of cryptocurrency. Since the purchasers could not take custody of their digital property, the ownership defaulted to Robinhood, who was the account custodian.
Because those funds were "locked up" on Robinhood, that prevented retail traders from putting the cryptos they purchased to use, generating rewards on a staking platform, earning interest as a loan on decentralized finance blockchains, contributing to proof-of-stake mining nodes, or just being taken offline completely in a hardware wallet for personal safekeeping.
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It's worth noting that while newly empowered wallet holders can now send and receive any of the cryptocurrencies currently available on Robinhood, the wallets do not yet support storage of non-fungible tokens (NFTs) the way MetaMask and Coinbase digital wallets do.
Robinhood wallet will soon integrate Bitcoin Lightning Network
The announcement also stated that in addition to sending, receiving, and storing cryptocurrencies, the Robinhood wallet will soon enable transactions using the Bitcoin Lightning Network. The Lightning Network is a platform that automatically coordinates and runs parallel with the Bitcoin blockchain to settle Bitcoin transactions in seconds and for pennies per transaction. So Robinhood wallet holders will be able to make retail purchases wherever Bitcoin is accepted. No target date has been announced yet for this upgrade. The announcement was made at the 2022 Bitcoin Conference that's underway this week in Miami.
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