How to Cash Out Bitcoin: Complete Guide

Saturday, 22 February 2020

How to Cash Out Bitcoin: Complete Guide

Posted by Madhu Gupta
Have you made a fortune in Bitcoins and want to cash them out? Well, I bet that the first question that comes to mind is what is the value of bitcoin in your native currency. Well, you can google it, and our best friend Google will help you out with it. 

Now comes the trick question. How do I convert my bitcoins to cash? I’m here to help you with it. Just follow this guide, and by the end of it, you can set out and easily convert your bitcoins to cash.
Cash Out Bitcoin
Firstly, there’s the age-old barter system style of way. You find a guy who’s interested in buying your bitcoin. You haggle with him over the price. Although they will mostly be willing to pay no more than the current market price. After you reach an agreement, he hands over the cash to you, and you send him the bitcoin. This process is fast, does not require any intermediary and no extra charges. 

But before you stop reading and start knocking on your neighbor’s door and asking him to buy your bitcoin, there’s a catch to this method. This method is never recommended, and the reason is that unless you trust the other person with your life, you should never transfer him the bitcoin and expect him to pay you on receiving it, and neither should he pay you first and not expect you to run off with his money. 

This is because the transaction is not secure. And there is no legal binding. For this reason, there are alternative ways of performing this sort of transaction. I’m coming to them in a bit.

When you are going to sell a bitcoin, you must think over a few factors:

  • Transaction fees.
  • Method of the transaction - bank transaction or digital wallet
  • The time it takes for you to receive the money
  • The currency you want the cash in.

Depending on these factors, you will need to choose a suitable method. Some transaction platforms charge a fee per transaction. If you want to do it for free, it is better to choose a regulated wallet. It usually takes between a day to five to get the money. It also depends on the mode of transaction. 

Wallets are usually faster than bank transactions. However, you need to be wary of transaction caps and avoid over-drafting your transaction limits. It is also a good idea to speak with the bank before performing large transactions as local laws might cause your account to get frozen. 

Now we’ll move on to a common way of cashing out bitcoins. Using fiat accepting exchanges is a popular and secure way. Such exchanges usually have a reasonable fee. But the positive side is that they provide you with security measures to safely cash in bitcoins. Some commonly used exchanges are CoinMama, Coinbase, BitFlyer, CoinSpot, WazirX. 

However, before starting to use any of these exchanges, it is recommended that you look them up and find out the type of fiat and the mode of the transaction they accept. After choosing an exchange, you will need to create an account, perform the respective identification procedure, and select the payment method. Then you need to deposit your bitcoins into the account and withdraw the cash. Check out the detailed bitcoin profit review and select the best bitcoin for you.

Another method is using peer to peer bitcoin exchanges. Here you do not conduct the transaction with the exchange. Instead, you deal with the buyer directly. A disadvantage of the earlier mentioned cryptocurrency exchanges is that you have no control over the price at which the bitcoin is sold. These exchanges do not allow the negotiation of the price. Also, since you are registering in an exchange and performing a transaction with it, there is no scope of anonymity.

On the other hand, peer to peer (P2P) networks provides a platform where you can interact with buyers and sellers and deal with them after negotiating on a price. P2P exchanges are a good choice if you want to keep your identity hidden. Transactions happen between users privately, with no intermediary.

This makes the transaction anonymous. However, if you are not careful, you can fall prey to scams. Also, the fact that you can meet clients and negotiate with them makes the process slower and more time-consuming. The process is quite similar to cryptocurrency exchanges - you create an account, provide identification information, find a buyer, and get the money.

In most cases, you will need to set up an advertisement mentioning the number of bitcoins you are selling and the rate. If a buyer finds your offer attractive, he/she will contact you. In addition to that, P2P exchanges have a rating system that measures the reputation of a user. It is advisable for a newbie in this field to conduct transactions with users with a good reputation. 

If you are going to use a P2P exchange, keep in mind to use one, which includes an escrow service. Escrow service keeps your bitcoin locked till your payment has been confirmed. Some popular P2P exchanges are LocalBitcoins and Paxful. 

If you are still confused, what an escrow is, let me give you an example. Suppose you want to buy a bitcoin. You log into a P2P exchange and search for sellers. You see my offer, and since you are happy with my price, you send me a request. 

I accept the request and put my bitcoin into an escrow. The escrow will hold onto my bitcoin till you transfer me the money.  After I receive the money, I release the bitcoin from the escrow, and it is sent to your account. 

With this, I have exhausted all my knowledge about cashing in bitcoins. The methods listed in this article are not entirely perfect. They have their pros and cons. You should use the one who feels the most convenient for you. I hope, after reading this article, you have benefitted, and you are ready to set off into the journey of cashing in bitcoins.

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