We have already discussed how to store Bitcoin and other cryptocurrencies, how much you should be paying for a Bitcoin transaction and for an Ethereum transaction.
However, one important bit we’ve missed is how to withdraw cryptocurrencies back into fiat. If you’ve invested all your money into crypto and then realised that you need to eat and crypto can’t quite buy you food yet, you will definitely find this post interesting.
Cashing out could be a challenging process and to be honest, this is where people normally run into trouble as they worry about safety and security of their money. Because of that, Crypto Daddy will cover three methods of withdrawing cryptos which have, generally, been referred to as the safest and least-costly methods.
What is Fiat?
Before I get started, I want to be on the same page as you. So in case you don’t know what fiat is, this is a definition from Investopedia:
In other words, fiat is a currency that is not backed by anything other than everyone’s faith in it. So, if everyone believes that 1 dollar is worth 1 dollar it will be worth that. However, if people stop believing that the dollar will go to 0.
For the record, fiat currencies are subject to inflation because if the government decides to print more money out of thin air that then depreciates the value of everyone’s money. This is the exact thing cryptos are trying to solve.
Exchanges are currently the most popular way of exchanging cryptocurrencies into fiat. While most comply with regulations of some sort meaning you will have to verify your account, they are a pretty good choice for those who are just starting out in the field.
The process itself is pretty straightforward. Create an account, link your debit or credit card (or your bank account) and then simply deposit whatever amount of BTC you’d like to exchange from your address. The process varies in time between a few minutes and a couple of days dependent on the exchange and your bank. Coinbase is the most well-known and trusted crypto exchange out there.
Most exchanges have fees associated with the withdrawal and it could be a disadvantage dependent on their size. Also, as mentioned above, it may take a few days for the money to appear in your account, so if you need money right here and right now – this is not the best way.
LocalBitcoins.com (or other services like it)
The vision of LocalBitcoins.com and other services like it is to create a simple P2P marketplace, where those who want to buy or sell digital currencies, can do so from other people. Think of it as a digital market. Whilst the market can have some trust issues, LocalBitcoins.com eliminates those by operating an escrow service with a transparent fee structure. They are essentially an intermediary between the buyer and the seller, so it is in their best interest for the transaction to occur.
Both parts of the agreement can choose how they’d like to exchange currencies and how they would like to transfer the money. There are a whole bunch of options available starting from Western Union transfers to personal meetings. Anything is possible.
Bitcoin Prepaid cards
These have been around for awhile and actually, quite a few people think that this is the best way of exchanging crypto into cash, given the benefits these cards offer. On the outside, these cards are indistinguishable from normal credit or debit cards, but the catch is that they can be funded with Bitcoin or other cryptos.
The process of getting a card can take a bit longer, compared to exchanges or local exchange services. However, these also offer a range of advantages, such as the ability to pay at any POS system, cashing out at worldwide ATMs, instant conversion from BTC to fiat, such as USD/EUR/GBP and others. They also have low commissions, free delivery, chip and pin support and a transparent fee structure.
Saying all that, it is important to note that these cards are only accepted in certain countries and if the provider doesn’t support the native currency of the country – you will have to pay a conversion fee from USD/EUR to your national currency.
More often than not, if you want to get your own prepaid card you will have to go through the verification process. This means you will have to submit your ID, address and sometimes a bank statement.
These cards also have spending limits meaning you will only be able to withdraw a limited amount per day. However, if you submit even more documents (thanks KYC) you will be able to lift those. It doesn’t sound fun, but it’s done to prevent illegal activity and money laundering, so it kind of makes sense.
Popular prepaid crypto cards:
This option could be a good option for the die-hard crypto owners and users. Yet, it may take some time before you get your card, but once you get it you will have access to instant withdrawals, the ability to easily top up your account and the fact that you don’t have to wait days for your money to arrive to your bank account.
The theme of Crypto Bible is to give you the basics of cryptocurrencies so that you can go out and achieve your crypto goals on your own. So as with everything here I encourage you to do your own research. Don’t follow my advice, rather, use it as a guide to what is possible. Research all the possible ways and methods yourself, read terms and conditions and read about the fee structure of each service you are considering.
Trust me, you will be better off that way and you will sleep better at night. You will know your coins, personal information and cash are safe.
My only suggestions to you will be:
- Use certified exchanges. Services like “Bitcoin to PayPal” or something dodgy is most likely a scam
- If you are exchanging using another service – always try to use escrow. Dealing directly with people may result in you being scammed.
- Cold wallets still remain the safest place to store your Bitcoin and other cryptocurrencies. Take that into account when choosing a method of exchange back into fiat.