On another blog here, someone had written a helpful article about Robinhood, but I had expressed concern that the blog made it sound like buying "BTC" on Robinhood was actually buying BTC. That had made me think about two things:

• Do you get the basic rights of BTC when you purchase "BTC" from Robinhood (or, very equivalently, PayPaul, under current terms)?
• Do the benefits of support from Robinhood offset the concerns? Isn't it a good way to get started?

1. Do you get the basic rights of BTC when you purchase "BTC" from Robinhood (or, very equivalently, PayPal, under current terms)?

The answer is no

Here are Robinhood’s own terms related to cryptocurrency:

https://robinhood.com/us/en/support/articles/cryptocurrency-transfers-and-deposits/

You cannot withdraw coins; you can only turn it into cash or something else on Robinhood to transfer it out:

“At this time we don’t support coin withdrawals, though we plan to do so in the future.”

You cannot transfer coins in:

"We don’t support transfers of your existing cryptocurrency assets or wallets into your Robinhood Crypto account. "

You have no keys or crypto wallet:

“We don’t currently provide you with access to your wallet or your wallet address.”

2. Do the benefits of support from Robinhood offset the concerns? Isn't it a good way to get started?

I have heard an argument that for starters, perhaps that is good enough. They learn about BTC. They get the price benefit and protection compared with fiat. And they don't have to learn how to handle wallets and keys, and if there is a problem, someone can get them back into their account, and their grandkids will more easily be able to get their inheritance. Who cares if they can't actually "use" the BTC to transfer it to others?

Beyond the basic "if they can't 'use' the BTC as a payment, that sorta violates the whole idea behind the Bitcoin paper", you are trading off fairly known potentially losses against the users' naivte.

So

1. You do not have access to the BTC

2. You can’t use it by sending it to someone else. (Nor can you receive it.)

But more than that

1. If there is a fork, you may not gain the benefit of the forked asset.

2. If there is an airdrop, you will likely not receive the value of an airdrop.
3. There is no way to independently verify your investment (on a blockchain explorer)
4. The details of your activities are not available to you on a blockchain explorer, as they aggregate their activities

5. Should there be a problem at Robinhood, you may not have access to your investment

6. and much more.