Bitcoin is a digital currency, known as cryptocurrency that is virtual in nature and is transacted online. You can buy bitcoins and use them to buy what you want just like regular currency. If you want to convert your bitcoin into hard cash, what is it that you need to do? We discuss the answer to this question in this article.
Why change from virtual to real?
Now that you have bitcoins, you can use it as a virtual currency, so why would you want to convert it to cash? The answer to this question lies in the fact that bitcoin is not accepted everywhere. Further, many countries do not recognize bitcoin and some even consider it illegal. So, if you have a stash of bitcoin in your online wallet, you may find it worthwhile to convert it to cash and deposit it in your bank account.
Let us look at some options for doing this conversion from virtual to real.
A broker is an intermediary, a third party who converts your bitcoin into cash[i]. There are various brokers or exchanges like BitStamp, Coinbase, or Kraken. You need to deposit your bitcoins into their online exchange and they would transfer the money to your bank account. You may have to wait for 3-5 days to get your money in your account.
You must note that you must first open an account with the broker, link it with your bank account and then make a deposit. Yes, you must make a deposit first before you initiate the transaction. The broker would, of course, charge a fee for the bank transfer. The amount would depend on the exchange, the bank and the currency used.
Peer-to-peer platforms are available, like Bisq or LocalBitcoins. These exchanges help you to sell your bitcoins to buyers online. You can get the cash deposited in your account or complete the transaction through a bank transfer. In some cases, you can even meet the buyer in person and collect cash.
To sell using this platform, you can post an ad. The platform would charge a fee, which is usually 1% of the total transaction value. Some platforms even allow you to trade anonymously, without sharing your personal details.
A bitcoin ATM is just like the regular ATM which gives you cash on credit or from your bank account.[ii] The number of bitcoin ATMs though are not many, so you first need to search if you can find an ATM near you.[iii] You can use the withdraw cash option in the ATM, wherein you use a QR code to transfer bitcoins from your online wallet to the ATM. The ATM then deducts charges and dispenses cash.
There are websites like BitPay[iv], and Monaco which allow you to convert your bitcoins into cash online, which is then loaded onto a debit card. You can use this debit card just like a card that your bank has issued. You can carry out any transaction you want with it.
You must keep in mind that no one converts your bitcoins to cash for free. They would charge a fee for it[v]. Also, taxes would be applicable as per the laws of your country. So, keep this in mind before you go ahead and cash out your bitcoins.