Despite having several disadvantages, exchanges are a one-stop solution when it comes to trading Bitcoins. In the case of selling the cryptocurrency, exchanges act as an intermediary that holds both seller’s and buyer’s funds.
First, you need to set up an account with an exchange of your choice. The absolute majority of reputable exchanges will require a complete identity verification and a connected bank account so that you can withdraw your funds.
Then, you just simply place a ‘sell offer,’ stating the type of currency you wish to trade, its amount and your asking price per unit. The exchange will automatically complete the transaction once someone matches your offer.
After the funds are credited to your account, you will need to withdraw them to your connected bank account. This can sometimes take an excessive amount of time, especially if the exchange is experiencing issues with its banks or facing liquidity problems. Several months before its bankruptcy, the Mt. Gox exchange was experiencing this exact problem. Moreover, some banks just outright refuse to process transactions with funds obtained via cryptocurrency trading.
It is also important to consider a fee you’ll need to pay in order to use some exchanges. For example, one of the world’s biggest cryptocurrency exchanges CEX.io charges a flat fee of $50 for withdrawal via Bank transfer, $3.80 if you’re withdrawing your funds to a Visa card and 1.2 percent of a transaction + $3.80 if you’re using MasterCard. The withdrawal fees can vary drastically depending on an exchange, but transaction fees are almost always either tiny or non-existent at all.
In addition, most exchanges will have a limit on the amount of money you’re allowed to store. The limit will increase over time if you stay loyal to a particular exchange.
Finally, it is important to remember that despite offering wallet services, exchanges are by no means a secure and reliable place to store your funds. They are very prone to hacker attacks, and there have also been instances of exchanges shutting down and running away with their users’ funds. Hence why you should take full responsibility for your own funds and store any amount that is not immediately needed in a secure offline wallet.
||Withdrawal Fee: Bank Transfer
||Withdrawal Fee: Credit Cards
||US Dollar, Bitcoin, Ether, Ether Classic, Litecoin, Zcash, Monero, BFX, Recovery Right Tokens (RRT), Dash
||0% – 0.1%
Wire transfer – 0.1%
24h express – 1%
||US Dollar, Euro, Bitcoin, Ripple (XRP)
||0.1% – 0.25%
||International Wire – 0.09%, EUR – €0.09
||$10 up to $1000 – 2% for over $2000
||US Dollar, Euro, GB Pound, Russian Ruble, Bitcoin, Litecoin, Ether
||$50 / €25 / ₽1750 / £30
Visa – $3.80,
MasterCard – 1.2% + $3.80
||US Dollar, Euro, GB Pound, Bitcoin, Ether
||US – 1.49%, EUR/UK – €0.15
||US Dollar, Euro, GB Pound, Bitcoin, Litecoin, Ether
||US – $25, EUR – €0.15
||US Dollar, Euro, GB Pound, Japanese Yen, Canadian Dollar, Bitcoin, Ether, Ether Classic, Iconomi, Augur, Dogecoin, Lumen, Monero, Ripple, Zcash, Stellar/Lumens
||0% – 0.36%
||0% – 0.19% or fixed commission
Another way of selling your Bitcoins is via a direct trade with another person. This service is accessible on websites usually associated with exchanges and includes an intermediary facilitating the connection.
First, you will need to register as a seller. Apart from setting up your profile, you will need to fully verify your identity. Once you’re registered, you can post an offer indicating your intention to sell some Bitcoins. When a buyer wants to trade with you, you get a notification from the service and from then on you are only interacting with the buyer. The website merely serves as a platform to complete the trade.
The process of selling Bitcoins on some of those sites can be quite involved and time-consuming. So, it is imperative to do your research before deciding on a trading platform and make sure you have the time and patience required.
Some of the websites offering the option of direct trading are BitBargain, Bittylicious, Coinbase, Openbitcoins, Bitsquare and LocalBitcoins.
Peer-to-peer trading marketplaces are a relatively new development in the Bitcoin world. There is no direct exchange of funds taking place. Instead, those websites essentially work as a platform that brings people with different, yet complementary needs together.
The service is designed for the mutual benefit of people who would like to buy Bitcoins with their credit card and those who want to spend their Bitcoins to buy goods from places that don’t accept digital currencies as a form of payment. As a result, the former get their flat currency exchanged to BTC, while the latter can buy discounted goods.
The websites facilitating the service provide users with an escrow service for the transaction, as well as a wallet to store Bitcoins.
Here’s how it works:
Bob posts his required wish list including the discount amount he wishes to receive, which normally goes up to 25 percent. Jack then accepts the trade and pays for Bob’s goods through the marketplace, stating Bob’s delivery address. Once the goods are delivered, the marketplace releases Jack’s money from escrow and transfers the funds into Jack’s wallet.
While this system allows Jack to acquire Bitcoins relatively easily using just his bank card, it also charges him quite a high fee for the service.
Some of the websites providing this service are Purse, Brawker and OpenBazaar.
All of the services mentioned above are online-based centralized platforms. In order to be able to sell Bitcoins using those services, you will usually need to fully verify your identification, which obviously voids Bitcoin trading off its anonymity. Moreover, once you’ve managed to sell your BTCs, you will need to withdraw them to your bank account or a bank card. More often than not, this process will take a very long time and will incur some fees.
Hence a lot of people are opting for offline trading.