Cryptocurrencies - insecure and can't be spent

Today I got access to cryptocurrencies in Revolut. Finally! I was really excited when I received the notification. Sadly, that excitement was short lived. I’m ok with revolut setting the sell/buy price and markup, but there is a fundamental flaw I can’t really live with and I won’t be using crypto on revolut until it’s resolved.

The issues is I can’t transfer cryptocurrencies in any way. I can only exchange from fiat currencies to crypto and viceversa, but that’s absolutely the only thing I can do. This has very serious implications:

  • Security: it’s cryptocurrency 101 not to keep your money in exchanges. They’re being hacked all the time. Bitcoins and other cryptocurrencies should be kept in a wallet for which only I have the private key (paperwallets, hardware wallets, wallets held in full clients, etc…). Since revolut won’t allow me to transfer funds to any other address (not even my own), I wouldn’t be able to keep that money secure. And since it’s revolut holds the private key for the wallet that would hold that money, in case of a hack, my funds would be compromised. Not acceptable. Specially when there are ways to prevent it.

  • Interoperability: the first thing I wanted to do was to transfer some bitcoins from an exchange to revolut. But I can’t do that, because revolut won’t even give me an address (let alone private key) to operate with.

  • Purchases: since I can’t transfer to any other bitcoin address, I can’t make any purchase in bitcoins. It’s not like that’s a big limitation for the time being, but it goes agains the whole point of cryptocurrencies.

  • Trading: being unable to transfer cryptocurrencies also means I’m locked in to revolut. I can’t benefit from the different exchange rates at different exchanges.

So, the only thing I can do with revolut’s current approach to cryptocurrencies is to do some speculation. And that would be severely limited since I have only one rate to choose from, and it’s not that good.

I went from excited to disappointed in a matter of minutes. I used to think of revolut as something halfway between a bank and a exchange. Now I see it’s just a bank that offers crypto as a financial investment, just like a fund.

I know you can’t change this overnight, but please take this into consideration. There’s no way anybody with a basic understanding of cryptocurrencies is going to be ok with your current offering.

Cheers!

17 Likes

Totally agree with you here, I was also under the impression I could send crypto directly to revolut and convert to fiat.

To buy in the UK we currently have to:

  1. Send euros to coinbase via SEPA and get shafted by RBS on the GPB to Euro.
  2. Send the euros to Gdax as coinbase is also a rip off.
  3. Buy etherium on Gdax and send to various exchanges to buy altcoins.
  4. Transfer the new altcoin into ledger nano S for security (optional).

To sell basically all the above in reverse, again getting shafted by all the conversion to get back to fiat. This is total madness, when I first saw Revolut I thought finally I can avoid the pain of all this SEPA nonsense and coinbase. If Revolut doesn’t offer wallets to send and receive cryptos then I really dont see the point of their crypto service. I am guessing someone else will come along and blow them out the water very soon if they dont get their act together.

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It’s easier than that…
Open a EUR account in your Revolut app and transfer EUR to your crypto exchange of choice, if they accept EUR directly.
I use Gatehub this way.
I gave up on Coinbase because the fees are ridiculous.

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Interesting! How are Gatehub fees?
And comparing to Kraken?

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Pretty expensive i think -
1Bitcoin with Revolut: 4606 EUR
1 Bitcoin with Gatehub: 5254 EUR

I am new to crypto currency technologies, but here is what made me decide to get involved with bitcoins so far:

  • transparency in technologies used to verify, confirm and transfer bitcoins. Everybody can get the source code and check it out
  • predictability of how new bitcoins are created.
  • the insurance that an owner really has 100% control of the owned bitcoins(Control of the wallet(public/private keys)).
  • possible to increase security with a hardware wallet.

Actually I found Revolut while trying to enrich my alternatives for buying crypto currencies. And the more I think about current limitations, the more suspicious Revolute crypto currencies become to me.

So if the Revolut’s bitcoins can not be transferred outside I suspect they don’t exist in the public blockchain, which leads to following questions:

1 Does that mean that Revolut uses its own blockchain or it doesn’t use blockchain at all?
2 How new bitcoins(which are meant to be sold) are created - as a reward of some proof of work or some other method?
3 If proof of work is used , then is Revolut using their own miners. How internal transactions are confirmed and verified.
4 If Revolut bitcoins are detached from the real bitcoins, then how is its price determined? Is the price strictly paired with the public bitcoins?
5 Can someone confirm that it is even possible at some point to have a phase 2, which would aim to push Revolut bitcoins in the public blockchain? Can someone confirm that the amount of bitcoins, with which Revolut works internally are actually previously mined by the legitimate miners, otherwise I doubt that they will be ever accepted.

I will be really happy to be convinced that Revolut bitcoins are 100% compatible with the bitcoins from the public blockchain and that a phase 2 is possible and is considered in the near future roadmap.


Clarifies a bit how revolut gets its bitcoins

This blog post nicely clarifies how crypto price is formed: https://blog.revolut.com/what-you-really-need-to-know-about-revolut-crypto-rates/

It’s a massive ripoff and there is currently a 500+ euro premium on buying crypto on Revolut. And then you don’t even get to hold your private keys. Do Revolut even hold the crypto they’re “selling” to us? And there is almost a 400 euro spread between their buy and sell prices for BTC. Their claims of low fees and market rates are a bit fat lie unfortunately and have really soured my opinion of Revolut.

Something that I always wanted to know it is if Revolut buys real Bitcoin (and the other cryptos) and store them in our name OR just take our money and issue an IOU that they will have to pay when we decide to “sell”…

I’m guessing that they hold a small percentage of crypto but certainly not enough to cover all deposits or withdrawals. If you don’t hold your private keys then it’s not your crypto so this service seems sketchy to me.

I convert GBP ot EURO in the Revolut app. I send the EURO to coinbase pro via SEPA with no fee.

I buy crypto on Coinbase pro with the EURO for 0.15% commission.

cheapest way to buy BTC.

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So was there a huge spread between the price you paid for BTC and the real market price listed on Kraken or other exchanges? Last time I checked there was a $700+ premium for purchasing one buy on Revolut compared to Kraken. And there seems to be some hidden fees besides the 1.5%.