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Table of contents
1.
Introduction
2.
What Are Cryptocurrencies?
3.
Types Of Cryptocurrencies
3.1.
Bitcoin
3.2.
Ethereum
3.3.
Litecoin
3.4.
Ripple
4.
How Does The Process Of Cryptocurrencies Work?
5.
How Can One Earn Bitcoins?
5.1.
Choose a Platform
5.2.
Fund The Account
5.3.
Place The Order
6.
How To Convert Your Cryptocurrency Into Cash?
6.1.
Broker Or Exchange Method
6.2.
Peer-to-Peer Platforms
7.
Frequently Asked Questions 
7.1.
What is the disadvantage of cashing out bitcoins using the peer-to-peer method?
7.2.
Which factors should we consider when we buy cryptocurrency?
7.3.
What is the crucial difference between bitcoin and litecoin?
7.4.
Which technology forms the basis of cryptocurrency?
7.5.
Which currencies are allowed to purchase cryptocurrencies?
8.
Conclusion
Last Updated: Mar 27, 2024

Cash Out Your Cryptocurrencies or Bitcoins

Author Geetika Dua
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Introduction

With the advent of technology, humans have opened many horizons for themselves. These include cashless payments, net banking, debit cards, etc. One such thought is cryptocurrency. Do you have an idea what cryptocurrency is? Do you know how to convert your cryptocurrency into cash? Don’t worry! We got you covered.

Introduction

Let us study how to convert your cryptocurrency into cash! But before we do that, we need to understand what cryptocurrency is.

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What Are Cryptocurrencies?

Cryptocurrency is a system of digital payments. It does not depend on the bank to verify transactions. It enables everyone to send and receive money. This is why it is called peer to peer system. This currency is entirely digital, and no physical money factor is involved. The transactions are kept in a public ledger if you transfer cryptocurrency funds. It is stored in digital wallets.

What Are Cryptocurrencies?

How did cryptocurrency get its name?

Cryptocurrency derives its name because it uses encryption to verify transactions. The goal of encryption is to provide security and safety. It uses complex coding. The first ever cryptocurrency was Bitcoin. It was founded in 2009.

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Types Of Cryptocurrencies

There are thousands of cryptocurrencies. Some of the best-known include:

Bitcoin

Bitcoin was founded in 2009. It was the first cryptocurrency to be launched by Satoshi Nakamoto.

bitcoin

Ethereum

Ethereum is a blockchain platform. It has a cryptocurrency that was developed in 2015. It is called Ether or Ethereum.

etherium

Litecoin

Litecoin is a parallel currency to bitcoin. It is more developed as it allows faster payments and more transactions.

litecoin

Ripple

Ripple is a distributed ledger system founded in 2012. It tracks different transactions other than cryptocurrency.

ripple

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How Does The Process Of Cryptocurrencies Work?

The primary basis of cryptocurrencies is blockchain. Blockchain keeps track of all transactions done by the holders.

There is a process called mining that creates a unit of cryptocurrency. The mining method includes the computer brain to solve complex mathematical problems and generate coins.

If we own cryptocurrency, we do not have anything concrete.

It is a key that allows us to move a unit of measure from one pocket to another.

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How Can One Earn Bitcoins?

There is a lot of debate generally about safety. Let us learn how we can buy cryptocurrency safely.

Choose a Platform

First, you have to select a platform. The available options are a broker or a cryptocurrency exchange.

  • Traditional brokers offer ways to buy and sell cryptocurrency online. They also help to trade other stocks, bonds, and ETFs. The advantage is that they offer low trading costs, but the crypto features are less.
     
  • Cryptocurrency exchanges There are a lot of cryptocurrency exchanges available. Each offer different cryptocurrency and storage wallets. They also charge some fees for services.
     

We should consider various factors while making a purchase-

  1. Better platforms
     
  2. Cryptocurrencies on Offers
     
  3. Fee
     
  4. Security
     
  5. Storage and Security.

Fund The Account

After choosing the platform, you must fund your account to begin trading. Crypto exchanges generally allow currencies like US Dollars, British Pound, and Debit and Credit Cards. This mode of payment varies from platform to platform. The fee is an essential factor. We should do proper research before initiating a purchase.

Place The Order

You can easily place orders with your broker or exchange’s platform. There is generally an option to buy and sell cryptocurrencies on every platform. 

Other ways to invest in crypto are also available. Some of these are PayPal, Cash APP, and Venmo. These allow users to hold and trade cryptocurrencies. Some of the investment vehicles are listed below.

  • Bitcoin trusts: You can purchase shares of Bitcoin trusts with a regular brokerage account. 
     
  • Bitcoin mutual funds:  Bitcoin ETFs and mutual funds are available to choose from. 
     
  • Blockchain stocks or ETFs: Direct investment in Blockchain companies is also a good practice.
     

We hope you are clear with the basic idea of cryptocurrencies and how to trade them—wondering how to convert your cryptocurrency into cash? 

Let us now understand how to convert your cryptocurrency into cash.

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How To Convert Your Cryptocurrency Into Cash?

Let us now learn how to convert your cryptocurrency into cash. There are mainly two methods to do so.

  • Broker Method or Exchange Method
  • Peer-to-Peer Platforms

How To Convert Your Cryptocurrency Into Cash?

Broker Or Exchange Method

The first way to convert cryptocurrency into cash is through an exchange or a broker. We need to give the digital currency in a trade and then ask for a withdrawal. The broker will transfer your money into the account in the same bank. This is done to avoid money laundering laws. It generally takes a time of 4-6 days to carry out the transaction.

As discussed above, brokers charge a small amount as a fee.

Let us look at the steps on how to convert your cryptocurrency into cash using a broker-

  • Create an account with a broker
     
  • Complete the verification process
     
  • Deposit Bitcoin in your account
     
  • Cash out your money

Peer-to-Peer Platforms

This method is of great use if you are in a hurry to withdraw cash. This is a user-friendly method. It lets you decide the mode of payment while selling bitcoins. It is comparatively faster and charges less fee as well.

However, it has certain disadvantages as well. This method is risky. You should take precautions and keep your bitcoins secure until you verify the payments.

Follow these steps on how to convert your cryptocurrency into cash using a peer-to-peer platform-

  • Register and choose the location of buyers.
     
  • Use the marketplace to send a trade request.
     
  • Use the escrow option to secure your bitcoins until payment is complete.

Workflow

 

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Frequently Asked Questions 

What is the disadvantage of cashing out bitcoins using the peer-to-peer method?

The peer-to-peer way charges less fee and is faster. However, it is prone to fraud. Therefore it is a wise practice to keep your bitcoins secure until you verify the payments.

Which factors should we consider when we buy cryptocurrency?

We should consider better platforms, offers, fees, security, and storage while purchasing.

What is the crucial difference between bitcoin and litecoin?

Litecoin is a parallel currency to bitcoin. It is more developed as it allows faster payments and more transactions.

Which technology forms the basis of cryptocurrency?

Blockchain Technology forms the basis of cryptocurrency. Blockchain keeps track of all transactions done by the holders.

Which currencies are allowed to purchase cryptocurrencies?

We can use currencies like US Dollar, British Pound, and Debit and Credit Cards to make a purchase. Although sometimes, the use of credit cards is not permitted.

Conclusion

This blog has covered a lot about cryptocurrency. It has given you an idea about cryptocurrency and how to convert your cryptocurrency into cash. We hope this blog gave you clarity on this topic! 

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