How to Sale Bitcoin
It is more difficult to sell Bitcoins than to buy them. This guide provides all the necessary information for you to successfully sell your cryptocurrency. First of all, the seller has to choose one of the two methods to carry out a transaction – through the Internet or at a personal meeting. Both ways have their advantages and disadvantages.
Selling Bitcoins through the Internet
Selling Bitcoins through the Internet is certainly a more common way. As of today, there are three possible ways to sell the cryptocurrency, using the web.
- You can carry out a direct transaction with the buyer.
- You can sell Bitcoins through online exchange services. In this case, the agreement is concluded with the service itself, not another person.
- New peer-to-peer trading platforms connect Bitcoin owners with people willing to buy the cryptocurrency.
The following websites specialize in direct transactions: Coinbase and LocalBitcoins in the US, BitBargain and Bittylicious in the UK.
To sell the cryptocurrency using these websites, you have to sign up as a seller. Additionally, it is necessary to provide identity proofing documents.
After the registration procedure, the user can place their offer, and then they will receive notifications from the website when a buyer is available. Starting at this moment, the parties interact by themselves, bypassing the intermediaries, and the service provides all the technical means necessary to complete the transaction.
Selling on the exchange market
You can sell Bitcoins on a cryptocurrency exchange market. To do this, you have to sign up and provide personal identification as well, though the transaction is carried out easier.
The exchange platform acts as an intermediary, controlling the sellers’ and buyers’ assets. Sellers place a sale request on the platform, indicating the amount meant for sale, currency, and its value.
When there is a buyer, the platform will automatically conduct the transaction. The cryptocurrency will be transferred from the seller’s account to the buyer’s account, and the seller will receive money.
There is a disadvantage to this method: when selling Bitcoins for conventional money, the amount received will have to be withdrawn to a bank account. If the exchange platform lacks liquidity or experiences some issues with banks, the withdrawal process may take a lot of time.
Before transferring money, you should carefully study the platform with which you intend to work. Circle, Kraken, and Bitstamp are good examples of online exchange services.
Besides, there are exchange platforms dealing exclusively with digital currencies. This method is used for arbitration purposes or if the store accepts other cryptocurrencies (e.g., Bitcoin Shop now accepts Lightcoins and Dogecoins as a payment method for merchandise).
BTER, CoinCorner, and Cryptsy are the examples of such services which work exclusively with cryptocurrencies.
Some services charge a commission fee. For instance, BTC-e charges sellers with 0.2% of the transaction amount. The CoinCompare and Bitcoin Charts websites compare the commission fees on various cryptocurrency markets and the cryptocurrencies volumes they trade.
Another subtle aspect, hidden within exchange platforms, is that they limit the maximum amount on the account (it can change with time). In any case, it is unwise to keep money on the account located on the exchange service websites, although it may seem the most suitable option for speculation purposes.
You are responsible for your own assets – large amounts should be kept on personal devices or in an offline mode, because even the most reliable Internet platforms may experience hacker attacks some day.
Peer-to-peer trading platforms
Websites like Brawker and Purse have recently started to appear in Bitcoin environment. Their aim is to bring people with specific and complementary needs together.
For example, this could be people who want to purchase commodities in online stores which do not directly accept digital currencies yet. The users who want to buy Bitcoins using their bank cards are also customers to such websites. Peer-to-peer platforms unite people with appropriate needs and allow one group of them to buy Bitcoins and others to get commodities at a discount.
Such services act as intermediaries, offering users a platform, a Bitcoin wallet, and an escrow service for transactions.
This is how it works:
- Alice publishes her shopping list on a peer-to-peer platform, specifying the desired discount (it is usually up to 25%);
- Bob has a bank card and wants to buy Bitcoins for an amount of money which Alice is going to spend on her commodities. He makes a deal with Alice via the website, buys the required commodities on Amazon.com and asks the online store to deliver them to Alice’s address;
- As soon as the commodities arrive at Alice’s place, she makes a note about it on the website and Bitcoins are transferred from an escrow account to Bob’s wallet after deduction of the agreed discount and a small website’s commission fee.
In this case, Bob purchases his Bitcoins for a relatively high price, but this procedure allows him to do it, using his bank card.
Issues with funds withdrawal
An international bank transfers system allows transferring money to any place in the world. The majority (if not all) of the online Bitcoin exchange platforms support this withdrawal method. Moreover, one can resort to the third-party payment services.
Personal data verification
While many of the websites, mentioned in this article, do not require any specific buyers’ personal information, they, at the same time, require identity confirmation from sellers. The legislation does not yet oblige Bitcoin trading platforms to collect personal data, but they, all the same, do it preventively to be ready in case such requirements appear in the nearest future.
To simplify the Bitcoins selling process, confirm your identity when you register on the website. This move will eliminate possible barriers which may arise when there is a need to sell the cryptocurrency.
A platform may require two scans of utility bills with your name and address indicated on them, as well as your scanned identity card (passport or driver’s license). Some services (e.g., BitBargain) may even require your selfie with an open passport in hand and the website name on a paper sheet!
It will be difficult for you to sell Bitcoins online if you fear to download personal information to Bitcoin trading websites.
Sell Bitcoins privately
In many circumstances, this is the easiest way to sell the digital currency. All you have to do is to scan the QR-code on the buyer’s smartphone and confirm the transaction.
It is easy to sell Bitcoins to friends or family members. Create a wallet for them, transfer Bitcoins into it and take your money.
There are several things you have to take care of prior to selling Bitcoins privately.
Negotiate the price
- Many use price quotations from some well-known Bitcoin exchange or the CoinDesk.com Bitcoin Price Index.
- Some sellers will charge an interest rate to you to cover costs and as a convenience/anonymity reward.
- You may calculate prices, using a dedicated mobile application, such as Zeroblock and BTCreport.
- It is good to be aware of local prices. The Bitcoin price may vary from country to country due to often difficulties of buying a cryptocurrency for some national currencies.
- In many countries all over the world, cryptocurrency fans organize meetings where people can trade and exchange Bitcoins.
Take safety precautions
- Arrange the meeting with a potential buyer in a public place or take a friend with you.
- You can also place a sales advert on a website like LocalBitcoins. It allows users to rate each other, so you can assess your potential trading partner’s reliability in advance. A seller with reputation can sell Bitcoins with some reward included.
- There is no need to verify your identity as on other websites.
- And again, if you are going to sell Bitcoins at a personal meeting, take care of your security (it has to be done every time you interact with strangers from the Internet).
- LocalBitcoins supports escrow accounts as well, but they are meant for online transactions only and not for in-person agreements. Therefore, never comply with the requests to make an escrow deposit prior to your personal meeting.
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