How to Sell Bitcoin: An Overview of the Top Ways to Sell BTC
Bitcoin (BTC) was created as a peer-to-peer electronic payment system. It’s a way to transfer funds from one person to another without the direct involvement of a third party, as is the case with cash, only in the digital realm. It means that you can exchange BTC for whatever you want, and you can do it without intermediaries like banks or payment apps.
Regardless of whether you are sending or receiving payment in BTC, it is worth understanding how the transaction occurs. Bitcoin transactions are messages, like emails, digitally signed using cryptography and sent to the entire Bitcoin network for confirmation. Transactions are public and can be found in a digital ledger called a blockchain.
The history of all transactions in BTC leads back to the point when Bitcoin was first produced.
It is worth mentioning here that Bitcoin does not exist physically, only digitally. The blockchain is a series of transaction records between different bitcoin addresses. The descriptions of these transactions are updated by the Bitcoin network and published on all its nodes when the balance changes. You can even use one of the block browsers to see the history and current balance of any existing BTC address.
With the advent of decentralized systems, it became possible for the first time to provide non-custodial financial services on a large scale. In this model, the client always retains complete control over his assets, using the service provider only as an interface to conveniently manage assets.
When installing a non-custodial Bitcoin wallet, you do not need to request permission to use the service. There is no account approval process. Anyone in the world can download the app and start using it right away. And only you have access to your funds. It makes it nearly impossible for a service provider, government, or anyone else to stop you from using your funds the way you want.
Ways to Sell BTC
There are two main ways to sell Bitcoin:
- Using an exchange service.
- Peer-to-peer sale.
An exchange service is a regulated entity that communicates with the traditional banking system. An exchange service can use a website with short exchange functions, a digital wallet compared to a banking system, a sterling cryptocurrency exchange with an order book, etc.
By selling BTC peer-to-peer, you can avoid the traditional banking system to some space by accepting cash payments, using a payment application, or exchanging goods or services. If you know someone who wants to sell BTC, you can buy it directly. In addition, several platforms act as a kind of partner search service, helping sellers find buyers and vice versa. Then buyers and sellers enter into peer-to-peer transactions.
Selling BTC on Cryptocurrency exchanges
A Bitcoin exchange is any service that brings BTC buyers and sellers together. It is the exchanges that make Bitcoin a liquid asset for large traders.
When they mention Bitcoin exchanges, most people refer to centralized custody platforms like Coinbase, Kraken, and Binance. These platforms provide a platform for trading BTC and many other cryptocurrencies. Like stock markets trading platforms such as Robinhood and Charles Schwab, exchanges bring buyers and sellers together.
By selling BTC through an exchange service, you are interacting with a regulated entity. These businesses must comply with government anti-money laundering (AML) regulations and Know Your Customer (KYC). These regulations require collecting and storing customer information, including identification documents and sometimes also proof of residential address.
Exchanges can be divided into simple exchanges or exchange services and exchanges that offer a full range of services.
Simple exchanges have some advantages, such as:
- They are fast, convenient, and straightforward.
- Have a guaranteed market or near-market rate for sale.
- You can sell any amount with them.
The advantages of a full-service cryptocurrency exchange include:
- The ability to set a limit on the sale, thereby guaranteeing the rate you specified.
- You can sell any amount.
When working with any exchanges, you can note several common disadvantages:
- they are not open in all regions;
- they demand identification verifying;
- payments can only be credited to a bank account.
To use the exchange to sell BTC, you need:
- Go to the website of the cryptocurrency exchange. Create an account and verify your identity if necessary.
- Follow the instructions on the site to sell your BTC or other digital assets.
- Transfer funds to your bank account.
It is imperative to mention that, by definition, a centralized cryptocurrency exchange takes over the storage of your BTC. It has some implications related to security and the freedom to use coins as you see fit.
Selling BTC Peer-to-Peer
There are a large number of platforms that facilitate the trading of BTC and other digital assets. Such platforms offer:
- the platform where buyers and sellers place their buy and sell orders;
- escrow and dispute resolution services.
Because these platforms essentially help people find each other, they are not technically classified as exchanges or money transfer financial institutions in many jurisdictions. Therefore, in some cases, identity disclosure is not required to use the service. Thus, P2P platforms can be an attractive way for privacy-conscious buyers to receive BTC. It means that such platforms usually have no shortage of clients.
In a peer-to-peer way, users can quickly sell BTC. You set your price, and you can choose how you want to get paid for your bitcoins. On a P2P platform, you can sell bitcoins directly to millions of users around the world.
The process of selling bitcoins using a P2P platform usually looks like this:
- Set your requirements. Create a listing – choose a payment method and indicate the maximum amount of BTC you are willing to sell. You can also show your location and preferred currency. After that, click “Find offers,” and you will see a list of available offers.
- Check out the offers. Check out the listings of people looking to buy BTC. Before choosing an offer, look at all information about the buyer, including his name, reputation, verification level, and Bitcoin rate. After you find a suitable offer, click “Sell.”
- Open a trade. If you are satisfied with the buyer’s conditions, enter the amount to be sold and click “Sell Now.” It will open a chat with the buyer, and the BTC you are trading will be locked in an escrow account.
- Read the instructions carefully and follow them. After you receive payment from the buyer, you can issue BTC to him. Confirm that the agreed fee has been received by the approved payment method. Note that this could potentially even be a face-to-face meeting with a customer and a hand-to-hand cash or barter transaction. When you confirm payment, the platform will transfer your BTC to the buyer’s wallet. After completing the transaction, you can upload the receipt.
- Leave a review. After you sell your BTC, be sure to leave a review for your trading partner. Reviews help users build a reputation.
The advantages of such platforms can be considered:
- Identity verifying is often not required.
- Any payment method can be used.
And the disadvantages can be described as:
- You must manually create and reconcile sell orders while on a centralized exchange. Buy and sell orders are aggregated into an order book maintained by the exchange to efficiently and automatically match buyers and sellers.
- In general, only small amounts can be legally sold.
When selling BTC on a peer-to-peer platform, it is essential to consider the laws of your country. In many regions, selling more than the daily or annual limit may put you on the wrong side of the law.