In this channel, we already talked about some decentralized technologies, including Helium – a decentralized network, Brave Browser – a browser where your privacy is preserved & you get rewarded in cryptocurrency. Recently, I’ve been asked by many people how to get started with crypto, precisely where to buy cryptocurrency or convert one into fiat?
Let me tell you exactly how you can do it.
There are different options that you have:
1) Crypto ATM
Crypto ATM is similar to a regular ATM, but at a crypto ATM you can buy and/or sell certain cryptocurrencies. Please check the map to see Crypto ATM closest to you (https://coinatmradar.com/)
Advantages:
- Anonymity. There is no need to create an account or complete identity verification
- Easy to use. It is similar to a regular ATM with a straightforward step-by-step process
- Immediacy. The transaction is executed immediately
- Convenient for travellers for small transactions
Disadvantages:
- Crypto ATMs charge high commissions starting from around 7%
- Crypto ATMs only supports a few crypto or only Bitcoin
- In most Crypto ATMs, you can only deposit and withdraw in the local currency
- In some countries, there are only a few ATMs, so they are usually in large towns only
- In some Crypto ATMs, you can only deposit cash but not withdraw
2) Centralized Exchanges
Centralized crypto exchanges (e.g. Binance, Coinbase, Kraken) are platforms, similar to stock trading platforms, where you can buy, sell and trade crypto.
Advantages:
- Different methods to deposit your fiat currency (via debit/credit cards, wire transfer, P2P)
- A lot of cryptocurrencies are supported to purchase or sell
- Low fees to deposit fiat currency. The commission for depositing via debit/credit card is around 3.5%. Some exchanges also support a local bank transfer (e.g., e-transfer in Canada) or a wire transfer – this is the cheapest way to deposit a large amount of fiat as the commission on these transactions is usually fixed.
Disadvantages:
- Identification. You need to create an account and complete identity verification to deposit fiat.
- Time-consuming. Depositing via wire transfer may take a few days to complete.
- Custody. You don’t fully control your own money on an exchange account. That’s why you should transfer your funds to your crypto wallet after a transaction.
- Hacking risk. Large exchanges are targets for hackers, so it is crucial to transfer funds to your own crypto wallet.
One of the biggest crypto exchanges is Binance. If you want to register, here is the link:
https://accounts.binance.com/en/register?ref=L0JWBNMS (or code L0JWBNMS)
You will get 10% discounts on every trade commission with this referral link.
3) Over The Counter (OTC)
OTC is when the buyer and the seller of cryptocurrency are matched directly. There are two options:
- Cash OTC. In cash OTC, a cryptocurrency is sold for physical cash.
- Bank Transfer OTC. In Bank transfer OTC, a cryptocurrency is sold for a wire transfer, and the bank usually becomes an escrow (a trusted third party).
Advantages:
- Large transactions. Good to make a large transaction at the same time without impacting the price of the asset on the market
- Cash OTC could be done anonymously (consider your local laws on reporting requirements)
- Average commission. Commission to the intermediaries may range from 0.5% to 3% (the higher the transaction amounts the lower the commission)
- Good if you already have direct contacts and connections with someone who you regularly transact with.
Disadvantages:
- More secure/cheaper alternatives exist. There are many exchanges that now can support more secure peer-to-peer transactions (e.g. Binance P2P).
- Time-consuming. It may take a long time to find a match and do necessary due diligence (e.g., proof of funds)
- The deals can fall apart for a variety of reasons as people can’t reach an agreement.
- Travelling costs. For Cash OTC, you need to meet with the other party, which will incur travelling costs.
- High fraud risk. You need to trust the other party for Cash OTC. The reason is cash can be counterfeited, or it can be a trap to rob you.
- High scam risk. If you don’t involve a TRUSTWORTHY broker – you can easily get scammed.
- There may be more than one intermediary involved to get the match.
Be very cautious when you do OTC transactions.
I hope now you know the cons and pros of different options on how to convert fiat into crypto or crypto into fiat. I will be making posts on each one with more details, so stay tuned for it!
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Disclaimer: This post is not financial advice or legal advice. It's for educational purposes only.
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