There are many ways in which you can sell your Bitcoins.
Over the counter (OTC) trade is growing everywhere, thus fulfilling one of Satoshi’s original ideas, which was to have a 100% decentralized P2P currency.
There are also many centralized exchanges where you can safely trade your BTC for other cryptos, or even cash.
In this short article we give you a few directions on how to sell your Bitcoin and what to watch out for while doing that.
Remember the first rule of cryptocurrency trade: crypto transactions are irreversible while cash transactions are not. This is the #1 thing to keep in mind at all times. Every request or proposal you receive, think about how your counterparty could be trying to exploit this fact. For example, Paypal transactions are *very easily* reversed.
If you’re selling Bitcoin, you should check your Paypal balance, see that payment has been made and only then send the Bitcoin amount.
Bitcoin transactions are irreversible and the buyer will have received their amount very shortly after you submit it. Paypal used to offer no guarantees for intangible goods such as cryptocurrencies (As of 2020, Paypal now allows cryptocurrency transactions.).
If the buyer is acting in bad faith they can reverse the payment, open a complaint and get their money back. This sort of scam is, unfortunately, very common and is one of the biggest consequences of the security of cryptocurrency transactions compared to fiat money. Bank transfers, wires and others are susceptible to the same scam strategy: every transaction that can be reversed can be exploited for this purpose.
For this reason, it is important to choose your trading partners wisely. Use reputation based sites like LocalBitcoins.com and Paxful where you can see a trader’s previous history. Traders with little or no history shouldn’t be excluded, of course, but you should probably start with smaller amounts when trading with these buyers. Buyers with a long history of honoring their BTC purchases are safer to deal with and you can probably trust them with a bit more volume.
For some P2P and local Bitcoin exchanges, we invite you to have a look at our article “How to buy Bitcoin near me?“. There we present 4 options for direct P2P trading of your Bitcoins with people near your community.
Other options not mentioned on our article include ATMs, BitQuick, Bittylicious and BitBargain. ATMs are very handy where available. You simply wire some BTC over to the ATM address shown on screen and moments later some greenbacks roll off the ATM dispenser. The process may take 15 to 30 minutes but hey, you’re doing magic! Turning cryptocurrency into US Dollars in real time!
BitBargain, BitQuick and similar platforms work like LocalBitcoins in a way, each with their own trading system. All of them require personal data and proper registration in order to satisfy anti money laundering legislations. It’d be great to have 100% anonymous and free money flow, but unfortunately we all must pay for the bad guys. If that sort of free money flow were possible, lots of bad stuff could be done anonymously. It’s a small price we pay for XXIst century conveniences.
Traditional centralized exchanges like Kraken and Bitfinex allow for some fiat money transactions. The premiums are usually a bit high and obviously they’ll require full ID verification for this, for the reasons just mentioned. Sometimes ID verification can take months on platforms like Bitfinex and Bittrex, which can turn some people away from these platforms, but again it’s the price to pay for secure and 100% legal transactions.
Lastly, but not least interestingly, there’s always LocalBitcoins.com. It’s a traditional marketplace where you can easily contact regional buyers and sellers and make deals directly in your local currency. This is very practical and can be really fun since a lot of group meetings and local interest groups are formed from trading BTC via LocalBitcoins.com.
Remember, friends and family can also become interested in cryptocurrencies as well.
Maybe you’ve got a relative that wants to trade coins for cash, someone who is interested in getting into the game. In these cases you’ll likely not get scammed but you should also not charge a large premium from friends and family.
Consider providing them with a nice exchange rate and you might reap many benefits with them in the future when they themselves become trading experts!