Cryptocurrency exchanges allow you to exchange Bitcoins for fiat and other cryptocurrencies at the market rate. However, not all users will find such an exchange convenient and fast, especially if they are not users of crypto exchanges. In this article, we will talk about how you can buy and sell Bitcoin if you do not use crypto exchanges, as well as the pros and cons of each exchange method.
Disadvantages of crypto exchanges
It is easy to register on crypto exchanges, but the exchange process itself may seem confusing for inexperienced users. To get Bitcoin, users have to:
1. Top up your deposit with fiat or altcoins. If you want to buy cryptocurrency for dollars or other currency, you will first need to pass identity verification. Verification can take anywhere from one hour to several days.
2. Exchange currency for Bitcoin. Not every newbie will be able to quickly understand how orders work on the exchanges. Limit orders are often used by default. The user will click “Buy”, but the purchase itself will not happen, because the order has been placed, but has not yet been executed.
3. Withdraw cryptocurrency to your wallet. First, you have to pay a fee. Depending on the exchange, the withdrawal fee may vary from 0.0005 BTC to 0.002 BTC. The fee is fixed, and it doesn’t matter what amount you withdraw. Secondly, after sending a withdrawal request, you need to wait twice: first until the exchange confirms the request, and then until the miners confirm the transaction in the blockchain. On some crypto exchanges, requests are approved in a few minutes, but on some it may take several hours.
These inconveniences almost negate the benefits of exchanging cryptocurrencies at the market rate. But this is not the only drawback of crypto exchanges. It is not safe to exchange or store cryptocurrency on an exchange. The bottom line is that you do not own the private keys to the exchange wallet, which means that the funds do not belong to you. In addition, the exchange can be hacked, and the funds withdrawal can be blocked. This is perfectly illustrated by the situation with the OKEx crypto exchange: when one of the signatures owners was arrested, users could not withdraw funds. To unlock wallets, you need several private keys, one of which was owned by the arrested director of the platform.
But the main drawback of crypto exchanges lies in this: in order to buy and sell Bitcoin for fiat currencies, users need to go through the KYC procedure, as a result of which privacy may be at risk. What are the ways to buy and sell Bitcoin, other than cryptocurrency exchanges?
Direct purchase from an individual without intermediaries
When buying cryptocurrency from another holder, you do not pay fees to platforms, and you can set the price yourself. If the counterparty agrees, you will also benefit from such an exchange. But you need to be careful: buy cryptocurrency only from those sellers that you trust. Don’t contact sellers you don’t know anything about. Especially if you are offerred to buy Bitcoin for a very low price – it may be a trick of scammers who will try to deceive you or simply embezzle your money.
Pros:
- You may buy cryptocurrency cheaper than on exchanges;
- You don’t need to pay fees to intermediaries;
Cons
This method has a lot of disadvantages:
- Inconvenience. You need to set up a personal meeting, get to the meeting point, and return home.
- A lot of time is spent on the trip and, possibly, waiting for the counterparty.
- Uncertainty. Something might go wrong. For example, the counterparty may want to change the terms of the transaction or even turn out to be a fraudster.
- Additional expenses are possible: for travel, cafes and others.
- The search duration. It may take a long time to find a counterparty in your region. Finally, there is a chance that you won’t find it.
As you can see, physical exchange has a lot of disadvantages, so it is better to find other ways, especially if you are unfamiliar with the counterparty.
Exchangers
Online exchanges are probably the fastest and most convenient way to buy or sell Bitcoin. Requests are processed quickly, and funds are immediately credited to your wallet or account. You do not need to pay additional withdrawal fees, as when exchanging on crypto exchanges. It is not difficult to find exchangers on the Internet, but study them carefully before buying cryptocurrency. Read user reviews to find out how reliable the service is and how quickly it processes customer requests.
Do the same if you want to sell Bitcoin. Please note how many network confirmations are required to complete the exchange request. Some exchanges speed up the process by requiring only 3 transaction confirmations. This is enough for the transaction to finalize and it cannot be canceled.
HiRiBi is one of such exchanges. Using this service, you can sell Bitcoin for PayPal USD, and the money will be sent to your wallet immediately after 3 network confirmations. But this is not the only advantage of the service. HiRiBi offers purchases at the highest exchange rate among exchangers – higher than the average market rate on crypto exchanges. So you can sell your Bitcoins and still make a profit.
For example, the Bitcoin market rate at the time of writing is $15,558, but on HiRiBi you can sell it for $2,664 more expensive – at a price of $18,206 per BTC. This is achieved thanks to the “Rate fluctuation protection” option. In addition, requests are processed automatically – no need to wait for confirmation from the platform’s manager. The service has proven to be reliable in its operation. This is evidenced by positive user reviews.
Pros:
- Fast and easy exchange. Requests are usually processed within a few minutes.
- Security. Funds are immediately credited to your wallet, and are not stored on exchanges.
- Ease of use. It is enough to pass an easy registration, fill out the exchange form and transfer funds to the specified banking details.
Cons
- The rate is higher than the market average rate. But this is not always the case. On the HiRiBi website, you can sell Bitcoin and make a profit, even if you bought BTC at an inflated rate through exchangers.
- Exchangers are harder to find because they are not as actively advertised as exchanges.
Exchange via messengers or social networks
You can find the services of guarantors that charge a small fee per transaction. But you agree on the price yourself, so you can buy and sell Bitcoins so profitably. But it is necessary that the guarantor has an almost impeccable reputation, and you must be sure that he will not deceive you. The exchange itself happens like this:
- The BTC buyer sends the currency to the guarantor’s account.
- The guarantor confirms that the funds have been received and instructs the seller to transfer Bitcoins.
- The buyer confirms that the bitcoins have been transferred to the wallet, and the guarantor transfers the currency to the seller’s account, minus the fee.
Pros:
- The ability to buy Bitcoin at a bargain price with a small fee.
- Quick and easy exchange without registration and other delays.
Cons
- There is a considerable chance to stumble upon scammers and be deceived.
- Finding reliable intermediaries is not easy. Most of these transactions are conducted through P2P exchanges. This is less profitable, but much safer.
Conclusion
You can exchange Bitcoins bypassing crypto exchanges, but every method has its own advantages and disadvantages: with a direct exchange, you risk running into scammers, and exchangers offer an inflated rate. But if you are looking for an easy, fast and secure way to buy or sell Bitcoin, then online exchangers are the best choice.
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