tl;dr: By trading and leaving your crypto on custodian exchanges or bank-style services you miss out on the biggest wealth opportunity giving away your freedom and options to connect with the crypto economy. It’s easy to be lured by the apparent convenience which hides severe restrictions. Learn how you can achieve your true potential by taking control back, starting with owning a crypto wallet
Have you ever rented an apartment and wished that you owned the place? No more landlords, no more monthly rent, no more rental hikes. Freedom.
As many of us discover, the benefits of becoming a real estate owner come with costs and responsibilities. You have the freedom to drill that hole to hang that painting, you can change out the kitchen counter, and have the security of property ownership. But you also need to cover the bills, pay the mortgage, and handle that leak on your own.
Freedom comes with responsibility. Comfort comes at a cost.
You can think of crypto as real estate. Or at least you should.
NOT YOUR MONEY, NOT YOUR MONEY
We used to consider the money we deposited to be our own. Lately, we’ve become all too familiar with the uncomfortable moments that leave us wondering if our funds belong to us at all. Your activities may have been rejected while traveling when the bank didn’t know the sender (why should they?), when you hit an arbitrary ATM limit, or if you made your money investing in cryptocurrency.
Not your money, not your money.
You’ve unwillingly opted into a system that effectively transfers ownership of your money to the banking system, and you’ve been granted scheduled supervised visits. On their terms.
Owning your money isn’t just a cliche. It has a direct impact on your ability to preserve and build your wealth. When you don’t own your money, you’re exposed to the risk of inflation, monetary crisis, seizure, censorship, and more.
The cryptocurrency revolution that started 12 years ago sought to change the world of finance and put financial freedom back into the most important hands – yours. At least in theory.
NOT YOUR CRYPTO, NOT YOUR CRYPTO.
There are many ways to invest in crypto, but the most popular is through 3rd-party custodians. In fact, the vast majority of crypto activity takes place through these custodians. While it may feel like you own the crypto stored on these platforms, it’s an illusion.
Many of these services, including PayPal, Cash App, Robinhood, and Revolut, make it easy to buy crypto, sometimes with no fees. But you don’t really own the crypto stored on these platforms. They own it for you. They are the landlord, and they set the rules. You pay for comfort with your freedom.
The thing is, you may not even realize the problem until you want to actually use your crypto. That’s when you may discover that some of these services don’t let you send your crypto at all, charge exorbitant fees to move funds, or impose strict caps on how much money you can move. What you thought you were saving in fees you pay for later.
Just to list a few of the problems you may encounter with custodians:
- You want to send money. They decide if they want to.
- You only need to pay network fees. They charge expensive service fees. See the schedule of this famous custodian. Withdrawing ETH cost over 10 times the fair network fee
- You ask for all your money. They cap how much they send you.
- You need money now but you cannot. They have an outage.
- You want to sell your crypto at the best price. They decide the price and spread.
- You want to earn on your savings. They offer terrible rates. For example you can earn stable 19+% APY on stable coin via Terra.
- You want to sign in to your account. They willl block you.
- You want to trade. They will restrict trading because of market conditions. (Robinhood did this recently)
Bark if any of those sound familiar.
And to be fair, they aren’t entirely to blame. Regulatory constraints require them to go through onerous know-your-customer processes. And things may get worse for the custodial services, as organizations like the Financial Action Task Force push for stricter control of crypto.
THE REAL COST OF MISSING OUT ON YOUR CRYPTO
Crypto is about the freedom to operate in a rich peer-to-peer economy of open services, which isn’t limited to buying and selling. Crypto is fueling new markets in lending, borrowing, social networking, advertising, gifting, staking, remittances, games, collectibles, NFTs, and so much more. And you can’t take place from the sidelines.
Savers earn lucrative interest on DeFi platforms, Axie Infinity players have earned over $1B in 2021 alone, and artists are building economies and selling on platforms including BitClout.
You wouldn’t use a bank that lets you store money but not use it. Should your crypto be any different? Truly engaging with the fascinating world of crypto requires a degree of freedom that custodians can’t provide.
With custodians, ownership is an illusion. You are the proud owner of real estate that you can’t visit, decorate, or live in, and you can only sell it back to the person you bought it from (and on their terms).
THE TRUE COST OF OWNING YOUR CRYPTO
Owning your crypto means that your funds are on-chain, controlled by you, and transparently available to you and you alone.
As a crypto investor, however, it could be useful to weigh the costs and benefits of custodianship and ownership, and the responsibilities of ownership come at a price: the time, effort, and fees needed to fully control your funds.
These costs include:
- purchasing fees for buying your crypto
- transaction and network fees required to send the crypto to a wallet you control (more on that here)
- extra time to manage the process
- security measures to protect your funds (VPNs, hardware wallets, etc.)
- legal costs associated with bequeathing your assets
Remember: only when the keys are in your hands can you realize the full value of your crypto investments.
CONCLUSION : OWN IT
Investing in crypto without true ownership prevents you from reaching the full economic and financial potential of cryptocurrencies.
It’s like surfing the internet exclusively on AOL.com, using an iPhone without an App Store, or owning an apartment that you can’t live in, decorate, or sell to whoever you want.
A peer-to-peer crypto economy can only happen if you are a peer and not merely an observer behind a walled-garden provider.
It’s time to break out of crypto prison, enjoy your freedom and achieve your real potential. Because if at the end of the day we replaced the paper currency with digital coins owned by large institutions, have we accomplished anything at all?
If crypto is a piece of digital real estate, there is only one right way. Own it.
It’s time to get a wallet. A real one (hint, hint)
