Step 1. Understanding the basic process
Before we have a closer look at the options available to you for changing your bitcoin into the currency of your choice, it is a good idea to get a basic understanding of what the process involves.
In most cases, the transferral of the funds located in your Bitbond account, to your Bank account will involve a third party service provider. (Relevant service providers are listed in more detail for you in step 2)
The steps you will go through will look something like this:
- Signup (Usually a matter of minutes or hours)
- Make an offer
- Find someone who takes the offer
- Withdraw your money into your bank account
- Signup (Verification usually takes 1 business day)
- Deposit your bitcoin
- Exchange your bitcoin for a currency of your choice
- Withdraw your money into your bank account
There, it’s that easy.
An important point to note here, is that most withdrawals and deposits have to undergo a certain number of “confirmations” before they are registered in the appropriate account. This is done for security reasons and can take a little bit of time. Bitfinex for example, requires three “confirmations”, resulting in a 30 minute wait (approximately).
Step 2. Turn your BTC into the currency of your choice
The first thing you will have to do, is to find a marketplace or exchange which will allow you to sell your bitcoin. Exchanges tend to be the most convenient way to sell or buy bitcoins. The key advantages here are trust and comfort, despite the slightly higher fees.
Exchanges are the right option for you if are not in too much of a hurry to access your funds, as most have a verification period of one or more days. If you are in a hurry, a Marketplace is definitely the better choice.
The benefits of using exchanges usually comprise lower fees and better prices for your bitcoin. Exchanges are also the better option if you want to buy larger volumes frequently, which you may very well want to do, once you are repaying your Bitbond loan.
Marketplaces provide a platform for you to meet with others to buy and sell your bitcoins directly from the buyer or seller. This usually incurs lower fees but is more hands-on and best avoided if your completely new to bitcoin.
In order to get a good idea which of the two options is right for you, we need to understand that the service providers described above, usually only provide their services in certain countries and regions.
Therefore, we have split this guide into 3 core regions: North America, Latin America and Europe. Let’s take a look!
Exchanging bitcoins in North America:
Coinbase (Broker, Exchange)
Founded in 2012, Coinbase now has over 4.9 millions users and 10.8 million wallets registered on its books. Available in 32 countries (see the full list here), Coinbase is the biggest exchange available to U.S. citizens, and is the easiest way to buy and sell your bitcoins in the US.
Although withdrawing and depositing money into your Coinbase account used to be free, August 2016 has heralded the inclusion of fees detailed below.
[Update: As of the 31st of August, Coinbase is also available to Canadian residents]
Keeping the above screenshot in mind, Coinbase is an excellent choice for U.S. citizens.
Bitfinex is another excellent option available to U.S. (except New York) residents, which operates on a similar fee basis to coinbase. Below, I have attached a screenshot of their fee schedule as of the 20th of August 2015.
QuadrigaCX is Canada’s largest bitcoin exchange, and charges 0.5% fees on all trades. Deposits are usually free but for the point of clarity, I have included their exact terms in the screenshot below. Like most exchanges Quadriga has separate terms for funding and withdrawing to your account.
Exchanging bitcoins in Latin America:
LocalBitcoins is one of the most popular bitcoin exchanges in the world and one of the best choices for residents of Latin America. LocalBitcoins does charge slightly higher fees than other services, a breakdown of which is provided below.
Importantly, this service is a peer-to-peer exchange, meaning that they provide a marketplace for users to buy and sell their bitcoins from and to each other. Consequently, users are called traders, and can create “advertisements” which detail the exchange rate and payment method the trader wants to offer.
In order to start selling your bitcoins, you will have to follow these 8 simple steps:
For a more in-depth analysis, head over to BitReview for their take on the peer to peer marketplace.
CEX.io is the second high-quality bitcoin exchange available to Latin American users. The company charges 0.2% transaction fees on both buying and selling bitcoin for USD. Receiving 7.8/10 on Trustpilot, CEX.io definitely is a viable option for Latin American users who want to sell their newly acquired bitcoin.
Below I have listed the payment methods and the corresponding fees they command. It is worth noting that these also have different limits. Information on this will vary depending on user and payment method however, so I encourage you follow this process to fully understand the fees and conditions which apply in your case: sign up → Wallet → Limits and Commissions
Exchanging bitcoins in Europe:
Bit4Coins is an Amsterdam-based innovator which operates on the basis of vouchers. Essentially, european users purchase a digital voucher code which is worth the desired amount. Then you select your preferred payment method, after which your voucher is sent to your phone. Then you simply enter the received code here, and receive your payment. You can learn about the benefits of this voucher-base system in this blog post.
Cubits is the penultimate service provider here. Founded in 2014, Cubits allows you to buy, sell and accept bitcoin and 16 other currencies. Interestingly, if your active selling online, you might want to include Cubits’ API, which allows you to accept bitcoin immediately. You need to login to see if your business is eligible, but you can get a feel for the process with this Slideshare.
They also offer several cool shopping cart plugins for WordPress, Magento, Shopware and Shopify. All the extra features may well justify the higher trading fees which are Cubits’ only weakness.
For more info, have a look at BitReview’s take on Cubits.
Coincorner (UK Exchange)
Coincorner is a UK based bitcoin and altcoin exchange which has developed the leading UK-focused bitcoin platform.
Coincorner charges a 1% fee for the selling and buying of your bitcoin. As can be seen from the table below, the withdrawal fee is large compared to most other exchanges. This is because unfriendly legislation has turned bitcoin into an anathema for the UK banking system, meaning Coincorner has to use a Slovakian bank to circumvent the problem.
Scoring 8.4/10 on trustpilot, Coincorner is a great choice for UK residents.[Update: CoinCorner have informed us that they no longer cater to altcoins ]
Converting your bitcoin loan in Nigeria, Tanzania, Kenya & Uganda
For users located in one of the four countries named above, exchanging bitcoin quickly and efficiently can be easily done through our BitPesa integration. Simply log in to your Bitbond account and navigate to “Convert BTC”.
By using our BitPesa integration, you can take advantage of very low fees and a speedy payout.
Exchanging bitcoins in the rest of Africa
Exchanging bitcoins for local currency can be tough for individuals located in the rest of Africa, but there are still good options available. For South Africa, Luno has received good feedback from our community, while BitOasis may work well for Arabic speaking bitcoin users. If these bitcoins exchanges are not available to you, your next port of call should be LocalBitcoins. This marketplace is available almost anywhere in the world, despite slightly larger fees.
Bitbond review written by Chris Grundy