Hedged Bitcoin
Latest release: 0.7.0 ( 11th June 2021 ) 🔍 Last analysed 7th March 2022 . Custodial: The provider holds the keys Not functioning anymoreHelp spread awareness for build reproducibility
Please help us spread the word discussing the risks of centralized custodians with Hedged Bitcoin via their Twitter!
Do your own research!
Try out searching for "lost bitcoins", "stole my money" or "scammers" together with the wallet's name, even if you think the wallet is generally trustworthy. For all the bigger wallets you will find accusations. Make sure you understand why they were made and if you are comfortable with the provider's reaction.
If you find something we should include, you can create an issue or edit this analysis yourself and create a merge request for your changes.
The Analysis ¶
Update 2022-02-26: This app is not available anymore.
App Description
Hedged Bitcoin is a fully programmatic investment service designed to capture a large proportion of the long-term price appreciation of Bitcoin with reduced volatility. For investors looking to add cryptocurrencies to their portfolio, the question of when to enter is tricky. Hedged Bitcoin provides a conservative approach to crypto investing and makes any time the right time to begin.
It is connected to the Uphold Wallet
No investor accreditation is required, no minimum investment. Hedged Bitcoin is available globally as a web and mobile application powered by the Uphold Platform.
Uphold: Buy Bitcoin, ETH & XRP Custodial!
It claims to allow withdrawals on the investments “at any time.”
Once your deposit on the waitlist is processed and invested, you can withdraw the funds at any time, without any lockups.
Terms of Service
Ternary Intelligence may at any time change or discontinue any aspect or feature of the Hedged Bitcoin Site without notice, including, without limitation, the content, hours of availability, and equipment needed to access or use the Hedged Bitcoin Site.
Separate entities
Ternary Intelligence and Uphold are separate, unaffiliated companies and neither company is responsible or liable for any loss or damage which may arise from the other’s products and services.
User is required to register with Uphold
In order to use the App, a User must register a valid Uphold account on the Uphold Platform. The User will also need to authorize Hedged Bitcoin to have enumerated privileges to access their Uphold account via the Uphold Platform Open API.
Management of User funds
All User funds managed pursuant to the Service(s) reside exclusively within the Uphold Platform. By accepting the Terms of Service, Users grant us access to view all cards, balances, transactions and User contacts, perform asset conversions, and perform transactions that move assets within the User account and between different accounts within the Uphold Platform for the purposes the Service(s) only. We reserve the right to temporarily transfer User funds managed pursuant to the Service(s) within the Uphold Platform to other accounts within the same Uphold Platform managed by our other services for a period of up to 24 hours where required in order for the Uphold Platform reserve system to process deposits to and withdrawals from management pursuant to the services.
The App
We were able to test out the app and found that it connects to Uphold.
The gist of which we quote:
In order to facilitate the services provided by Hedged Bitcoin, you’re authorizing Uphold to transfer your personal data and allowing the application to:
- Accounts:
- View all your Uphold Money Cards and their associated information.
- Update existing Money Card names and create new Uphold Money Cards.
- Transactions
- Transfer funds from your Uphold wallet to the application.
- User
- View all the information associated to your Uphold wallet.
Verdict
Since Hedged Bitcoin makes use of Uphold, which is a custodial service to manage investments and transactions, and since Uphold is a custodial service, this app is custodial and the app is not-verifiable.
(dg)
Verdict Explained
As the provider of this product holds the keys, verifiability of the product is not relevant to the security of the funds!
As part of our Methodology, we ask:
Is the product self-custodial?
If the answer is "no", we mark it as "Custodial: The provider holds the keys".A custodial service is a service where the funds are held by a third party like the provider. The custodial service can at any point steal all the funds of all the users at their discretion. Our investigations stop there.
Some services might claim their setup is super secure, that they don’t actually have access to the funds, or that the access is shared between multiple parties. For our evaluation of it being a wallet, these details are irrelevant. They might be a trustworthy Bitcoin bank and they might be a better fit for certain users than being your own bank but our investigation still stops there as we are only interested in wallets.
Products that claim to be non-custodial but feature custodial accounts without very clearly marking those as custodial are also considered “custodial” as a whole to avoid misguiding users that follow our assessment.
This verdict means that the provider might or might not publish source code and maybe it is even possible to reproduce the build from the source code but as it is custodial, the provider already has control over the funds, so it is not a wallet where you would be in exclusive control of your funds.
We have to acknowledge that a huge majority of Bitcoiners are currently using custodial Bitcoin banks. If you do, please:
- Do your own research if the provider is trust-worthy!
- Check if you know at least enough about them so you can sue them when you have to!
- Check if the provider is under a jurisdiction that will allow them to release your funds when you need them?
- Check if the provider is taking security measures proportional to the amount of funds secured? If they have a million users and don’t use cold storage, that hot wallet is a million times more valuable for hackers to attack. A million times more effort will be taken by hackers to infiltrate their security systems.
But we also ask:
Is the product still supported by the still existing provider?
If the answer is "no", we mark it as "Not functioning anymore".Discontinued products or worse, products of providers that are not active anymore, are problematic, especially if they were not formerly reproducible and well audited to be self-custodial following open standards. If the provider hasn’t answered inquiries for a year but their server is still running or similar circumstances might get this verdict, too.
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