Founded in 2016 and based out of Hong Kong, the start-up Freewallet provides services as a digital cryptocurrency wallet provider available on IOS and Android devices. They support about 25 different currencies such as Bitcoin, Ethereum, Dash, Litcoin, Monero and more. In 2017, Freewallet released a web version for their multi-wallet app as well as a token wallet app on android.
Since inception there has been some controversy on different occasions. One of those issues in particular was in 2017, when 8.5 million dollars went missing out of many users accounts. It didn't take long before the conspiracy theories started flying in about a possible hack. As the day went on, about 13 hours into it, Ethereum continues to leave users wallets getting sent to just one address. In fact, It wasn't until co-founder Alvin Hagg finally issued a statement many hours later, saying that Freewallet moved the users funds to cold storage due to congestion on ethereum blockchain caused by Bancore Network ICO. This was done with no warning or message to users that Freewallet would be performing these transactions. I can only imagine what users were going through watching their money leave their wallet with no explanation. That is just very inconsiderate and unprofessional on the platforms behalf.
(Picture above showing the $8.5 Million in users funds being sent to cold storage wallet)
The Hard Facts:
Currently Freewallet is charging their users the highest transaction fees per send when users want to send funds outside of freewalets network. Otherwise it's free to send your coins from one freewallet address to another. Let's look at an example, if we look at the current cost of the average fee for a bitcoin transaction to be confirmed within the next 3 blocks or 2 - 45 minutes, it will cost 10 Satoshis per byte. That's with the median sitting at roughly 225 bytes per transaction. So that would cost a user 2,250 Satoshi's (0.00002250 btc) or $0.20 cents.
(Courtesy of earn.com)
Now If you want to have your bitcoin transaction confirmed with the very next block which would take anywhere from 1-10 minutes, this will cost you 50 satoshis per byte which is just over 11,000 satoshis (0.00011 btc) or $0.95 cents.
Now with Freewallet if you want to send a Bitcoin transaction you will be charged 40,000 satoshis (0.0004 btc) or $4.00 at current bitcoin price. That's just for sending $1.50 worth of bitcoin we used foe this example. That price that they charge will never go any lower but it certainly will go higher which we witnessed in the past.
(Snapshot above is a bitcoin transaction which can't be sent because fee is to high)
The big issue is they are not using that full fee amount being charged to users as they seem to be keeping the difference to make a profit. Also the issue isn't just with bitcoin but all their coin wallets. Dash for example completed a upgrade to their network not that long ago which brought transaction fees down significantly. So for example, if you use a different wallet provider like Coinomi, your fee would only cost 0.0001 Dash or $0.25. So would you like to know what Freewallet will charge you? Well you would pay 0.01 Dash or $5.00 at the minimum.
Freewallet doesn't allow users to adjust their own transaction fees like most custodial (no control over private keys) wallet providers do.
We recommend using wallets like Coinomi or Mycelium as these are great wallet providers. If you go to our Crypto Wallet page you can read up on many other wallet providers to store your cryptocurrency including hardware wallets like Trezor, KeepKey, and Ledger. When it comes to keeping your money safe you need a wallet you can depend on, one that will be their with answers and solutions when you need them most. A wallet that the users have total control over. Something that seems to be lacking with Freewallet and for these reasons we are warning users to be very cautious if your using their platform.
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