How to Turn Bitcoin into USD
You have to jump through a couple of hoops if you want to turn Bitcoin into cash. You either have to trust the exchanges and pray that Mt.Gox doesn’t happen again, or trust your fellow crypto-enthusiasts on P2P marketplaces and hope that you won’t end at gunpoint. But what if I told you that there is a better way?
Except that I can’t. There will be a better way and we are developing it right now, but if you want to convert Bitcoin to USD right now, you will have to go through the usual channels. So here’s how to do it right and make sure that you will not end up regretting it later on.
How to sell Bitcoin for USD on an exchange
The actual process is extremely simple — you transfer your BTC to the exchange, you choose how to withdraw the USD from it and you are done. The conversion rate might be an issue because the exchanges update them almost every minute, but that’s the price for the ease-of-use.
Also, before you can do any of that, you have to find the right exchange. And that’s where you will have to put actual work in.
How to find a proper BTC to USD exchange
First of all, let’s try to define the absolute minimum requirements for the good cryptocurrency exchange:
- It must support a BTC>USD pair, obviously;
- It must be reliable so that it doesn’t go down in the middle of the deal;
- It must be secure so that your private or financial information doesn’t get leaked;
- It must have a relatively painless way to withdraw Bitcoins to cash. For example, if it only allows PayPal and you are in the region where it doesn’t work, there’s no point to use it.
Doesn’t sound like much, right? Except all these criteria are entirely subjective and do not say much to a someone not familiar with the modern cryptocurrency market. Not to mention that this information will be rather hard to come by.
This means that there is only one way — join a cryptocurrency community and see not only what it prefers at the moment, as well as why it does that.
The list of (somewhat) friendly cryptocurrency communities
- r/CryptoCurrency — it’s Reddit, which means that it’s easy to get into. There is a search system, as well as daily discussion and support threads. It is by far the easiest way to see the trends in crypto, although it is quite hectic if you are new to it.
- BitcoinTalk — a more serious, systematized and elitist approach to Bitcoin community. Has an embedded marketplace and a lot of trading discussions full of good advice.
The best exchanges to sell Bitcoin for USD
There are some exchanges that provide an option to transfer your BTC to USD. The problem is that you should not trust all of them – some of them are legit, but some are just a scam waiting to happen. Here are two that we can tentatively recommend.
Legal disclaimer: Exchanges provide highly varying degrees of safety, security, privacy, and control over your funds and information. Perform your own due diligence before selecting an exchange.
Established in 2011. Located in the United States (Los Angeles, CA).
Minimal fee: 1%
Coinbase is a relatively old and trusted exchange. For the most part, it establishes the reference practices in the cryptocurrency world and it knows it. It is also one of the very few high-profile exchanges that allow converting bitcoin to cash. Which leads us to the downside.
Coinbase as a company has gotten too cozy in the last couple of years. Their fees are a bit higher than the fees on the other exchanges, although their actual offerings are not at all different.
Overall, Coinbase is a safe, if expensive choice. If you are not an adventurous type — this should be your pick.
Established in 2014. Located in Poland.
Minimal fee: 0.35%
Bitbay is a well-established European exchange. The owners understand the stigma that comes with the location of the exchange and attempt to compensate for it with lower fees and higher publicity. For example, they donate to some of the high-profile Polish charities.
Bitbay is not quite the underdog it attempts to present itself as. Their lower fees come with a reduced legal responsibility in case something goes wrong, as well as some limits on the number and sum of simultaneous withdrawals.
If you are feeling adventurous, greedy, or want to exchange your BTC to some other currencies than USD (for example, EUR or PLN), Bitbay is your best option. However, there is an element of risk to it.
How to exchange Bitcoin for USD at marketplaces
A marketplace is a place where Bitcoin sellers and buyers can meet up and trade Bitcoins for the currency they want. A lot of users consider marketplaces the safest and the best way to do this — the traders are not limited to any exchange and therefore do not depend on a single system.
The problem with the marketplaces lies in the human nature. The internet is full of horror stories about users who, when meeting the trader from the marketplace, were forced to transfer their Bitcoin for free at gunpoint. Less extreme scammers simply sent them money via a credit card and later disputed/charged back the payment.
The best marketplaces to sell Bitcoin for USD
There are quite a lot of cryptocurrency marketplaces, but most are unregulated and full of scammers. In some cases, the administration might even be in on this. Here are some marketplaces that are at the very least somewhat trusted and reputable in the community:
- BitcoinTalk. The marketplace on the BitcoinTalk is not the most advanced, but it is highly regarded. Each member has a history of comments, which you can use to track their transactions. You can also write to the moderators and enquire whether or not this account should be trusted – although you should not use this feature easily.
- LocalBitcoins. This marketplace allows you to trade with your local Bitcoin enthusiasts for cash or with digital payment methods. It has some nifty features like the user reputation and a messaging system. Of course, it lacks moderation and open oversight of the BTT community, but if you want to trade locally, it’s the best choice.
Of course, you are free to seek other marketplaces, but remember that the risk of getting scammed on a marketplace is even higher than getting ghosted by a rogue exchange. Trade only on the marketplaces that are well-established and do your own due diligence.
How to not get scammed at a marketplace
The best way to not get scammed at a marketplace is to use an exchange. But if you want to use a marketplace anyway, here’s some advice that will help you come out on top:
- Pick a reputable marketplace. Maybe the one from the list in the previous paragraph.
- Pick a trusted buyer. It’d be better if they have some credentials for you to check, or recommendations from existing community members.
- Pick a protected method of transfer.
- If you are selling for cash — meet up at the public place with video cameras around. A mall or even a police station would do.
- If you are selling with a wired transfer — don’t. Or at the very least, make sure that your buyer is reputable and has a history of good transactions that they can prove.
Of course, these methods aren’t perfect — they still require you to either use a rather unwieldy exchange or to trust strangers on the internet each time you want to trade cryptocurrency for USD. There must be a better way to do all this, right?
Well, Bonpay is working on one. It’s a debit card that lets you cash your BTC in at any ATM and even quickly pay at online and offline stores just like any other card. The best news? You can pre-order a Bonpay Card right now. The first 20 000 cards will be launched in summer of 2018. Hurry up!