Last week the Commonwealth Bank announced it will become the first Australian bank to allow its customers to buy, sell and hold crypto assets from directly within the CommBank app. These new features will begin as a pilot in the coming weeks, and they will start offering up to ten selected assets in the coming months. These assets include:
- Bitcoin Cash
But here's why we think you shouldn't buy or hold crypto from within the CommBank app...
At no point in time will you actually own a cryptocurrency asset purchased via your CommBank account. CBA has partnered with cryptocurrency exchange Gemini and blockchain analytics firm Chainalysis to provide the infrastructure support needed to provide the exchange and custody services.
But just like any other cryptocurrency exchange, you will never own the private keys to the cryptocurrency you purchase. The CommBank exchange will in fact store the private keys on behalf of their users and instead, you will be given access to your cryptocurrency via your CommBank app login details. They have yet to announce whether users will be able to withdraw assets from the app onto another location, such as a secure hardware wallet.
You may be wondering: what’s the difference between that and the fiat money I already store with my bank?
If you give up ownership of your private key, you will lose the critical feature of cryptocurrency — decentralisation — which makes it so impervious to censorship and hacking! This is exactly what has been happening ever since cryptocurrencies amassed billions of dollars worth of value. When people give up their private keys, so they can trade more conveniently on exchanges, these centralised platforms become enticing targets for criminal activity.
Overall, it is estimated that at least $11 billion worth of cryptocurrencies have been stolen since 2011!
HOW SHOULD YOU STORE YOUR CRYPTO SAFELY?
The most effective way to store your cryptocurrency is with a cold storage hardware device, which is a physical device used for storing your cryptocurrency and private key in an encrypted, offline environment.
When you move your coins onto a hardware wallet, you are:
- ensuring they are secure on your own, independent from a third party
- taking your coins offline, where they won’t be vulnerable to online hacks
- taking full ownership and control of your assets, as you are the only one in charge of your money
If you’re ready to own the cryptocurrency you just bought, you can visit our store here to purchase yourself a hardware wallet.
Whilst this announcement from Commonwealth bank is certainly a promising sign that Bitcoin is further establishing itself within the mainstream spotlight, there needs to be further education for users that taking control and ownership of your digital assets is still an incredibly important element of this technology.
No longer do we need to hand over the keys to our wealth to banks or third-party organisations!
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