Cashing out your Bitcoins isn’t as easy as buying them. If you plan to sell your Bitcoins online, you will either be able to do so through an exchange, direct trading, or a peer-to-peer transaction.
You can withdraw flat money with a Bitcoin ATM, or sell your Bitcoins in person, beyond the comfort of your own home.
Exchanges
Despite having some drawbacks, exchanges are a one-stop solution when it comes to Bitcoins trading. In the case of selling the cryptocurrency, exchanges operate as an intermediary containing the funds of both the dealer and the buyer.
Second, you’ll need to set up an account with your option of exchange. The vast majority of reputable exchanges would demand full proof of identity and a linked bank account to withdraw your funds.
Then you simply put a ‘sale offer’ specifying the type of currency that you want to exchange, the quantity, and the price you pay per unit. If anyone accepts your bid, the exchange immediately completes the transaction.
After you have transferred the funds to your account, you’ll need to transfer them to your bank account. This can often take an unreasonable amount of time, especially if the exchange is facing problems with its banks or liquidity issues. The Mt. Gox exchange was experiencing the exact problem many months before its bankruptcy. Besides, some banks unequivocally refuse to accept transactions with funds raised from cryptocurrency trading.
Also, it is important to consider a fee that you may have to pay to use certain exchanges. For example, one of the world’s largest cryptocurrency exchanges CEX.io charges a flat fee of $50 for bank transfer withdrawal, $3.80 if you withdraw your funds to a Visa card, and 1.2% of a transaction + $3.80 if you use MasterCard. Depending on an exchange, withdrawal fees can vary significantly, but transaction fees are almost always either small or inexistent at all.
Furthermore, most exchanges would have a cap on how much money you’re allowed to store. If you remain loyal to a single exchange the cap will rise over time.
Finally, it is necessary to note that exchanges are by no means a safe and stable place to store your funds while offering wallet services. They are also vulnerable to hacker attacks, and there have been cases of exchanges with the funds of their users shutting down and running away too. So why you should take full responsibility for your funds and store any amount that is not needed in a safe offline wallet immediately.
Direct trades
Another way to sell the Bitcoins is through a direct transaction with someone else. This service is available on exchange-related websites and requires an intermediary facilitating the link.
Next, you have to mark yourself as a seller. You will need to check your identity in full, apart from setting up your profile. Upon registration, you can post an offer indicating your intention to sell some Bitcoins. You get a notification from the service when a customer wishes to trade with you and from then on you just deal with the purchaser.
The website acts merely as a forum for completing the exchange.
On some of those platforms the process of selling Bitcoins can be very complicated and time-consuming.
So, before settling on a trading site, it’s important to do your homework to ensure you have the time and patience you need.
Online P2P trading
Marketplaces for peer-to-peer trading are a fairly new concept in the Bitcoin world. There is no direct exchange of money. Rather, certain websites simply act as a forum that brings together people with different but complementary needs.
The service is built for the shared benefit of those who want to purchase Bitcoins with their credit card and those who want to invest their Bitcoins purchasing products from locations where digital currencies are not recognized as a type of payment. As a result, the former have their flat currency traded for BTC, the latter being able to purchase cheaper goods.
The websites that facilitate the service provide users with a transaction escrow service, as well as a Bitcoins wallet to store.
So this is how it works:
Bob posts his desired list including the amount of discount he wants to receive, which normally goes up to 25 percent. Then, Jack accepts the trade and pays through the marketplace for Bob’s goods, stating Bob’s delivery address. The marketplace releases Jack’s money from escrow once the goods are delivered, and transfers the funds into Jack’s wallet.
While this device allows Jack to buy Bitcoins reasonably easily using his bank card, it also charges him a high service fee.
Many of the above-listed services are centralized online platforms. To use these platforms to sell Bitcoins, you would typically need to thoroughly check your identity, which inevitably cancels Bitcoin’s trading off its anonymity. Besides, after you’ve sold your BTCs, you’ll need to transfer them to your bank account or a debit card.
This method will take a very long time more often than not, and will incur some costs.
Therefore a lot of people opt for offline trading.
Via ATM
While looking like conventional cash machines, in the traditional sense Bitcoin ATMs are not ATMs. Instead of linking to the user’s bank account, they are linked to the Internet to make Bitcoin transactions easier.
Bitcoin ATMs can accept cash money and exchange it with Bitcoins provided as a paper receipt with a QR-code on it or by transferring the funds to a Blockchain network wallet. Usually, they charge very high transaction fees-media reports cite fees as high as seven percent.
Just a few exclusive Bitcoin ATMs provide bi-directional features which mean users can use them to both buy and sell Bitcoins. These devices include the Genesis Coin Robocoin, Genesis1 and Satoshi2, the General Bytes BitAccess, and the BATMThree model. Any operators may, however, disable selling operations.
Bitcoin ATM providers often require users to have an established account to perform sales operations and the registration process sometimes takes a lot of time, energy, and effort. For example, new Robocoin ATM users need a phone number to enable and notify, ID provided by the government, a palm scan, and a current photo taken by the ATM’s webcam. Depending on the system and also on different operators operating similar ATMs, the identification process varies but some kind of identity check will always be needed if you want to sell.
After verification of your identity, you get a QR code with a wallet address that you need to transfer your Bitcoins to. Depending on the computer you’re using, either you’ll automatically get cash out of the system or you’ll get a redeem code and have to wait for confirmation of the transaction.
But, despite the ever-increasing number of Bitcoin ATMs around the world, they are only used to buy Bitcoins. Also, BTC ATM operators need to change the setting on their machines according to anti-money laundering and know the relevant customer requirements in the jurisdiction in which their ATMs are installed.
This requires a money transmitter license in some nations, although existing laws in others prohibit any Bitcoin ATMs from being installed.
Selling Bitcoin in person
Trading digital currency in person is in several ways about as easy as it is becoming. All you need to do to sell your Bitcoins is scan somebody’s phone with a QR-code and get cash on the spot. If you sell to friends or relatives, you just need to use a Bitcoin wallet to set them up, give them the required amount and collect your cash.
If you’re dealing with a random individual, however, you’ll most likely go through lengthy rounds of negotiations negotiating the price, meeting place, and other related conditions. In addition, you need to take into account a few things to ensure your protection and the safety of your assets.
Withdrawing funds
If you sell Bitcoins online you will eventually face the issue of withdrawal of funds. International wire transfer is the most common way to move money and most popular exchanges endorse this transferral process. However, several exchanges recently started accepting withdrawals from credit and debit cards.
Alternatively, money may be transferred via SEPA, which is the Single European Payments Region. It is a mechanism designed to make financial transactions more effective between Members of the European Union. Some European exchanges of cryptocurrency embrace this transferral process.
But both of these systems are far from being flawless. Transfers usually take a very long time, they can take up to four days to process, depending on the country and the amount of money being transferred. Both of these devices often incur extra costs. For example, Barclay’s bank charges £25 to £40 for a SEPA payment, depending on how fast you want the transfer completed. By comparison, HSBC only charges £ 4 for a SEPA payment made via online banking, but HSBC is infamous for refusing to deal with Bitcoin and all other money linked to digital currencies.
So, if you open a bank account solely for the withdrawal of money from Bitcoin transactions, you need to do your homework and choose the bank that best fits your requirements.
