Researcher of decentralized systems. Head of Research, Cellframe
All crypto holders — who would probably rather prefer to be called «HODLers» — at some point have a need to sell their coins or tokens and get cash money for daily spending. Cashing out is even more critical for those directly involved in blockchain industry as they often receive regular payments or another sort of revenue in crypto. Whether it be ‘hodlers’ or crypto pros, their standard requirement is to cash out «on demand» at the right price and via secure and fast procedure.
Despite the fact that the first cryptocurrency exchange appeared back in 2010, while a well-known p2p platform localbitcoins.com in 2012, the problem of fast cash out that takes no longer than a couple of minutes is super relevant today. Why is that so?
1. The majority of top cryptocurrency exchanges doesn’t have fiat pairs
It seems crazy, yet it’s the fact that 4 of top-5 crypto exchanges don’t have fiat at all! Only one of them — Bitflyer — has a JPY exchange option only:
If we go further down the list of top-10 most significant exchanges and check positions from 6 to 10, we will find only one — Bitfinex that has a set of fiat currencies (USD, EUR, GBP, JPY). Finally, there is only one exchange with USD from top-10!
Of course, there are well-known Kraken, Bitstamp, GDAX, etc. with fiat trading pairs, but we will touch upon that in a next paragraph.
2. Bank transfers from cryptocurrency exchanges can turn into a big problem
All funds from major exchanges usually are paid via bank transfer, so your bank needs to be friendly to incoming transfers from cryptocurrency exchanges, as such payments are often most often «red flagged» in terms of compliance and AML policy. Hence, before actually getting the chance to use your money, you first should find a friendly bank, then wait a certain time to withdraw the money (which normally takes up to 3–5 days) and finally pay all due taxes. Is this an easy day way to get cash money for your daily groceries or gas? Not likely, especially for small amounts.
3. How about Localbitcoins and other p2p services? Neither fast, nor flexible
Primary issues of Localbitcoins and other p2p services has to do with the following:
A) You need to wait up to 1 hour (or even more!) for receiving a fiat payment
B) The payment method can often be inconvenient: by gift cards or bank transfer
C) You need to accept the price from listed orders (which can be lower than the market price at global exchanges) or set your own price and then wait even more!
Sure thing Localbitcoins is a legendary service for bitcoin buy and sell, but it definitelyfalls out of category ‘fast and comfortable’.
So, what is the solution for a quick and easy cash out?
This solution was founded unexpectedly, and it is actually a bundle of rights of the exchange balance requirements (vouchers or codes) and systems of traditional electronic money. Seems too complex? Let me explain.
Imagine that there is an exchange where you can sell your bitcoins and other major cryptos for USD that at the same time allows you to transfer any amount of USD to another account inside this exchange in one click. So, another user can pay you via some payment method outside the exchange to receive a USD amount inside. This can be made by issuing a unique code (or a voucher), that transfers balance once it is activated. It basically works like this:
Who can be interested in buying USD already deposited on crypto exchange? Individuals, who need to purchase crypto as well digital internet exchanges that work with the variety of e-money systems, big banks, cryptocurrency and even gift cards. They are buying USD «on balance» to buy crypto for their business or to sell «USD on balance» to their customers who need to «deposit» money to the exchange. By doing so they directly connect to money flows from the customers who are cashing-out and customers entering the crypto space.
It is clear that making centralized exchange-based voucher for transfer USD is solution for immediately transfer “right of claim” BTC inside exchange. But how fast&easy fiat money can be transferred? It’s easy — using e-money systems or internal bank transfers.
Why using e-money payment systems is comfortable?
Many years of experience have proved that e-money systems are the best choice for small and medium amounts of transfers not exceeding
USD 10,000. The operation is scaled down to money transfers inside the e-payment service, so it can be done instantly and looks like more like an ordinary money transfer from one account to another. It is fast and not «long history» as with wire transfers.
The most popular and probably the best electronic money services are Payeer, Advcash, Neteller as well as local brands, for example in Russia and CIS there are two that are trending now — QIWI and Yandex.Money. One essential advantage is that in such systems there can be issued an account-bonded plastic card, so after the payment is received, the money can be immediately spent in shops, etc.
How to find crypto exchanges that support vouchers (codes) and digital internet exchanges?
First of all, it is necessary to carefully select an exchange to work with. There are several exchanges that have a code (voucher) system: EXMO, WEX, LiveCoin, Btc-Alpha (if you know some else — please type some information in comments!).
However, for a successful operation on the specified cashing out algorithm, it is not enough just have the technical capability for issuing code tied to the account balance. After the code creation is done, there comes the final stage — finding an internet exchange and opportunity to receive the payment from there in comfort mode. It can be done via different exchange integrators, like Okchanger or Bestchange. Using this services there is possibility to find directions of exchange codes to fiat money, for example:
After finding a convenient exchange direction, it will only be necessary to issue code and exchange it for fiat within the chosen e-payment or bank system. Usually, the whole operation takes no more than a few minutes.
There is a great way for a fast and safe crypto cash out by virtue of exchanges with a voucher-issuing system in a bundle with e-money systems and digital internet exchanges. This approach operates on the principle of two isolated vessels serving both for cash out and entering crypto. Basically, there are two exchanges that provide the codes that are liquid on a market and can be quickly sold via one of the e-money system payment.
Have your own idea on easy crypto cash out? Leave your comment here!
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