Learn How Bitcoin Works-How to Sell Bitcoin-Lesson 7

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Author : Coindesk : 23rd October, 2015.

How to Sell Bitcoin. Selling bitcoin isn't quite as straightforward as buying bitcoin, but fortunately CoinDesk is here to help. This guide will give you all the information you need to cash out your digital currency. When deciding how to sell your bitcoin, you first need to consider which method best suits your situation: selling bitcoin online or selling bitcoin in person. Each option has its own advantages and disadvantages. Selling bitcoin online. Selling bitcoin online is by far the more common way of trading your bitcoin. There are now three ways to go about selling bitcoin online. 1. The first way involves a direct trade with another person, an intermediary facilitating the connection. 2. The second way is through an online exchange, where your trade is with the exchange rather than another individual. 3. New peer-to-peer trading marketplaces that allow bitcoin owners to obtain discounted goods with their bitcoin via others that want to obtain the crypto currency with credit/debit cards. The two groups are brought together to solve both problems in a kind of peer-to-peer exchange. 1. Direct trades: Websites that offer this type of selling structure include Coinbase at coinde.sk/1KJM4D6 and LocalBitcoins at coinde.sk/1QlY6Bh in the US, and BitBargain at coinde.sk/1MOD1S7 UK and Bittylicious at coinde.sk/1NI4ulZ in the UK at www.coindesk.com/information/buy-bitcoin-uk/. On these sites, you will usually have to register as a seller.

This involves verifying your identity, which we will discuss again later. Once you have registered, you can post an offer, signalling that you want to sell, and the website will alert you when a buyer wants to trade with you. From there, your interaction is solely with the buyer, but you use the website to complete your trade. The process of selling on Bitbargain UK at coinde.sk/1MOD1S7 and (more so) Bittylicious can be quite involved and requires some patience. However, support at the former site has been great in our experience. Bitcoin users with bank accounts in the United States should consider using Coinbase at www.coinbase.com/join/jbonney or Circle at www.circle.com/en which have both won many fans with their simplicity. 2. Exchange trades. The other way to sell Bitcoins is to register with an online exchange. You will still have to verify your identity, but in this case you won’t have to do as much work when it comes to organizing the sale. Exchanges act as an intermediary who holds everyone's funds. You place a ‘sell order’ (just as you would place a buy order), stating the volume (amount) and type of currency you wish to sell (e.g. bitcoin), and the price per unit you wish to sell for. As soon as someone places a matching buy order, the exchange will complete the transaction. The currency will then be credited to your account. The downside that accompanies this ease of use is that, if you are selling bitcoin for fiat currencies, you will need to withdraw those funds to your bank.

If the exchange is facing liquidity problems or issues with its banks, it can take an inordinate amount of time to receive your funds. Mt. Gox became infamous for this problem before it went bankrupt at www.coindesk.com/mt-gox-files-bankruptcy-claims-63-6m-debt/ and BTC-e at btc-e.com/ has recently been plagued with reports of similar difficulties. Therefore, you should carefully research the exchange you intend to use before committing funds. Examples of other crypto-to-fiat currency exchanges include Circle at www.circle.com/ Kraken at www.kraken.com/ and Bitstamp at www.bitstamp.net/. Alternatively, you could use a pure crypto currency exchange to change bitcoin for another crypto currency. It's less likely that anyone would want to do this, but there are reasons such as arbitrage, or the rare occasion if a shop accepts something other than bitcoin (for example, Bitcoin Shop now accepts LiteCoin and Dogecoin too, for a wide range of goods). Examples of these types of sites are: BTER at coinde.sk/1MX5Eg9 CoinCorner at coinde.sk/1LxUlXb and Cryptsy at www.cryptsy.com/users/register?refid=324404. In addition, you’ll have to pay a fee to use some exchanges. BTC-e charges a flat 0.2%. For overviews of what fees are charged by the various crypto currency markets and what volumes are being traded, see CoinCompare at coincompare.com/ and Bitcoin Charts at www.bitcoincharts.com/markets/ for up-to-date information.

Another consideration is that there will be some limit to the amount of money you are allowed to store (subject to change over time) on an exchange. Regardless, it is not wise to use exchanges to store your entire pot of coins at www.coindesk.com/information/how-to-store-your-bitcoins/ even though it can appear to be the easy option if all you are doing is speculating. You should take responsibility for your own funds, and store any unneeded amounts on your own devices or offline, rather than trusting an exchange that might one day be hacked. 3. Peer-to-peer trading marketplaces. A new development in the bitcoin space is the advent of sites like Brawker at www.coindesk.com/review-brawker-lets-buy-almost-anything-bitcoin/ and Purse at purse.io/ which set out to bring together two groups of people with specific and complementary needs. The first group are individuals who want to be able to use bitcoin to buy goods from sites which do not yet directly accept digital currencies. The second comprises of others who would like to buy bitcoin with a credit or debit card. The marketplace brings together individuals with matching requirements to effectively sell bitcoin to one and provide discounted goods for the other. The marketplace acts as an intermediary, offering users the platform, bitcoin wallet and escrow for transactions. How it works. 1. Alice posts her required Amazon wish list on the marketplace, stating the discount she would like (normally up to 25%).

2. Bob has a credit/debit card and wants to buy bitcoin matching the value of Alice's purchase(s). He accepts the trade and, through the marketplace, buys the Amazon goods and requests they be delivered to Alice's address. 3. Once the goods are delivered, Alice notifies the marketplace and Bob's bitcoin are released from escrow and arrive in his wallet, minus Alice's agreed discount and a small fee for the marketplace. This system does mean that Bob will be paying a relatively high fee for the service, but also means he will be easily able to acquire bitcoin via bank card. Concerns with withdrawing funds. The universal way to move money around the world is international wire transfers. Most (if not all) online bitcoin markets support this method of transferral. Another way to transfer money to your bank after selling bitcoin is via the "Single European Payments Area" (SEPA at en.wikipedia.org/wiki/Single_Euro_Payments_Area) system. SEPA was designed to make international transfers between member states of the European Union more efficient. Some exchanges (such as Kraken and BTC-e) support these payments. However, transfers take a very long time (around four days), and can incur large charges – potentially making trading prohibitively expensive. HSBC, for example, charges £4 per SEPA payment made via online banking and £9 per WorldPay transaction. Barclays charges £15 per SEPA payment and £25 for other international transactions.

If you are opening an account with the specific purpose of receiving funds from bitcoin trading, you may find high street banks refuse to do business with you. HSBC has explicitly refused the author of this guide accounts for bitcoin trading. You can also use third-party payment processors to withdraw and receive fiat funds. The numbers of these services is dwindling, however. OKPAY at bit.ly/1LYH3Dg recently stopped engaging with bitcoin businesses at www.coindesk.com/okpay-suspends-bitcoin-processing/. Identity verification. While many of the bitcoin markets mentioned here require very little identification from buyers, they require a lot of proof of identity from sellers. There are few legal requirements from bitcoin markets to record who their users are, but most (if not all) are pre-emptively collecting identity data in anticipation of forthcoming regulations. To make becoming a seller easier, it is worth at least considering completing the identity verification process when you first join the site. Getting this step out of the way can remove barriers to selling if and when you’re ready to make the move. Expect markets to ask you to upload scans of two utility bills displaying your name and address, along with a photo ID (such as a passport or driving licence). Some (such as BitBargain UK) may even ask you to take a selfie including your photo ID and the name of the market on a piece of paper! If you are not comfortable uploading such personal documents to an (effectively) untrusted business, then you will have a difficult time finding somewhere to sell bitcoin online.

2. Selling bitcoin in person. Selling bitcoin in person can, in many ways, be the easiest way to pass on your digital currency. Simply scanning a QR code on another person's phone and accepting cash-in-hand is about as easy as a bitcoin transaction can get. If you have friends or family who want to buy bitcoin, the process is simple. Set them up with a bitcoin wallet, send them the Bitcoins and collect your cash. There are several things to be aware of when selling bitcoin in person. Agree on a price. Decide on a rate works for you. Many use a price from a prominent bitcoin exchange, or the CoinDesk Bitcoin Price Index at www.coindesk.com/price/. Some sellers apply a percentage on top of these rates to cover costs and as a convenience/anonymity premium. You could use a mobile app to calculate prices. Popular apps include Zeroblock and BTCreport. It helps to be aware of local fluctuations in price. Price can vary from country to country, often due to difficulties in obtaining bitcoin with the local national currency. There are many bitcoin meetups at www.meetup.com/ around the world where people are happy to trade bitcoin and other crypto currencies. Stay safe. It is always wise when carrying a large amount of cash to meet in a public place and/or go with a friend. LocalBitcoins. Alternatively, you could advertise yourself as a bitcoin seller to a wider audience. The definitive site for this is LocalBitcoins at localbitcoins.com/?ch=35qy.

This website allows users to rate each other, so one may assess the trustworthiness of a potential trade partner. You may be able to sell with a premium attached once you have a reliable reputation. You do not need to verify your identity as on other sites. Again, if you are setting yourself up for an in-person meeting using LocalBitcoins, you must always think about the general safety rules for meeting a stranger from the Internet. LocalBitcoins also supports escrow transactions. However, these are for online transactions, not face-to-face deals. Therefore, do not comply with requests for someone who asks for escrow for a face-to-face transaction. Where to Sell Bitcoin. Coinbase at www.coindesk.com/companies/coinbase/ is based in the USA and operates one of the most popular wallets and is an simple way to buy and sell bitcoin. Receive a $5 bonus on sign up. Buy bitcoin at coinde.sk/1KJM4D6. Localbitcoins at www.coindesk.com/companies/exchanges/localbitcoins/ is based in Finland and matches buyers and sellers online and in-person, locally worldwide. Buy bitcoin at coinde.sk/1QlY6Bh. BitQuick at coinde.sk/1gWyY9L is based in the USA and claims to be one of the fastest ways you can buy and sell bitcoin. Buy bitcoin at coinde.sk/1gWyY9L. CoinCorner at www.coincorner.com/?AffiliateId=12 is based in the Isle Of Man and allows purchases with credit and debit cards for verified users. Buy bitcoin at www.coincorner.com/?AffiliateId=12. Bitbargain at bitbargain.co.uk/?r=koofybit is based in the United Kingdom and has a vast range of different payment options for UK buyers. Buy bitcoin at bitbargain.co.uk/?r=koofybit. Xapo at www.coindesk.com/companies/wallets/xapo/ is based in the USA and is known for its ease of use and bitcoin cold-storage vault. Buy bitcoin at coinde.sk/xapobuy. Services for Traders. BitMEX at www.bitmex.com/register claims to be Bitcoin's fastest derivatives echange. Up to 10x leverage. sign up at coinde.sk/1LFBo9a.

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