[canistr]

So who is responsible for Robinhood's orderbook? Are they partnering with an existing exchange to fulfill market/limit orders? Are they simply paying for the trading fees on behalf of users?

If Robinhood isn't posting their orderbook, why would anyone trust that there are no fees or commissions when they could bake their costs directly into the price? There's no market regulation (a la Reg NMS) for cryptocurrencies, so who's to say that the user isn't getting screwed on price and allowing Robinhood to take their cut?

But if they are partnering with an exchange, why pick one over the other? Who will pay for the withdrawal/transaction fees?

[banterfoil]

> so who's to say that the user isn't getting screwed on price and allowing Robinhood to take their cut?

Are you referring to market orders? I don't understand this. If I place a limit order for 1 share at $20. And the order gets filled at this price; where do you think Robinhood is taking a cut? I think the strategy you mention could be possible with market orders however.

[canistr]

Well for one, cryptocurrencies (at their current prices) can be divided much greater than simply "1 share". I'm saying that the price that Robinhood sets is dependent on orderbook price which they control.

Example: you buy $20 USD worth of BTC on Robinhood. They give you 0.001750 BTC.

But on other exchanges, you would have received 0.001812 BTC instead. The differing price of BTC between exchanges gives them their "commission/fee".

The lack of transparency in pricing gives them the advantage in exchange for retail consumer confusion over "zero fees".