To celebrate Coinmama’s new sell feature, we’ve been exploring all the ways to sell Bitcoins. If you’re interested in selling some coins, why not check out the previous articles in our series?
How to Sell Bitcoin covers the three major ways to sell and gives some helpful tips on how to get the best price.
How to Sell Bitcoin for Cash dives into the most popular types of real-world cash sales and covers their pros, cons, and risks.
In this article, we’re going to consider the relative merits of the various venues for selling Bitcoins, either online or offline. We’ll focus on security, as this should always be the primary consideration; it doesn’t help to get a 2% better price if you end up losing all your money to some hacker or criminal.
While our previous articles should help you decide on a sales method, this one will help you nail down the right place to sell. There are countless choices to consider - literally hundreds of crypto exchanges and as many places to do a cash sale as there are meeting spots in your city - which can make the decision of where to sell your Bitcoins really confusing…
Which exchange is most trustworthy? What’s the safest location to set up a person-to-person trade?
By learning to identify the safest and most reliable sales venues, you can quickly and dramatically reduce the massive array of options for selling your Bitcoins. Not only will this keep you safe but it’ll make your decision a lot simpler and faster.
Choosing a Reliable Online Sales Venue
It seems like every month brings news of another crypto exchange hack or failure. A recently published report estimates that nearly $1 billion in cryptocurrency was lost to exchange hacks and exit scams in 2018. That’s 3.6 times more than in 2017!
One of the major problems with exchanges is that they’re lucrative and low-risk targets for hackers. If a hacker can breach an exchange’s systems, the nature of cryptocurrency makes it highly likely that they can get away with stealing huge amounts of value. Of all the major exchange hacks, only a tiny percentage of hackers have ever been caught.
An unavoidable weakness shared by all exchanges is that they must maintain a large, internet-facing “hot wallet.” This hot wallet contains a sizeable pool of readily-available crypto funds, and it’s necessary for facilitating rapid trading and withdrawals for exchange clients. Unlike “cold wallets,” which are not accessible via the website, hot wallets are under constant attack by hackers.
One of the advantages Coinmama enjoys in this area is that no fiat or crypto balances are maintained in customer accounts on our site - when you buy or sell crypto, the funds are sent to you immediately, to the wallet or bank account of your own choice. That puts you in control of your own economy, and means your coins aren’t susceptible to hacking as they would be in an exchange that holds your funds. Furthermore, as a vendor rather than an exchange, our clients don’t trade with one another. Any coins traded via our site are done so directly with our company. Our broker model is much simpler than the complex operations of an exchange, and this simplicity greatly reduces our attack surface.
We’d like to recommend our new selling feature as a secure, reliable, and convenient way to sell your Bitcoins online.
If you’d prefer to use an exchange - and we’ll admit that they’re better-suited to active traders - then our best advice is to research the available choices thoroughly, and select those with the best security record. Besides reviewing news articles on each exchange, a good way to inform yourself is to review customer comments across various social media platforms. For example, Reddit has many subreddits dedicated to specific crypto exchanges. Consider frequent complaints about delayed or denied withdrawals as a major red flag.
Setting up a Safe In-Person Trade
As discussed in our previous article, How to Sell Bitcoin for Cash, you can often get a better price by selling your coins via a face-to-face trade. The drawback to such trades is that they carry some extra risks in terms of physical security. We mentioned the need for a counterfeit detector when accepting banknotes but didn’t cover the reasons for our venue recommendations in depth. It’s also a good idea to only fund your mobile wallet with as much Bitcoin as you’ve agreed to sell. Don’t risk taking your full stack, as you may be coerced into giving it all up.
When it comes to venue selection, you should opt for a level of security which balances convenience against financial risk. If you’re only exchanging a tiny amount of Bitcoin in order to familiarize yourself with the process and perhaps build up your reputation as a seller, then you needn’t meet in a highly-secure location such as a police station. Incidentally, we would recommend performing such small experimental trades initially in order to work out the process, before moving on to higher value trades.
A good meeting place for high-value trades will contain some or all of the following security-enhancing elements:
Guards, preferably specific to the venue itself. For example, bank guards will likely prove far more effective at dealing with any trouble than roaming mall guards.
Cameras, ideally visible and obvious to deter any criminal behavior. If anything goes wrong, remember to request the footage from the venue as soon as possible, before they overwrite it. A video record of any incident will be extremely helpful evidence for any police case.
Metal detectors. These will prevent your trading partners from bringing common weapons like a knife or gun to meeting but the same holds true for you. You may wish to forgo this option if you carry a licensed firearm and are trained in its use for self-defense.
Access control. Turnstiles, mantraps, remote or manned gates, etc. will all discourage a malicious trading partner from running off without paying you.
Counterfeit detection equipment. In venues equipped to deal with cash transactions, it’s common to find devices for counting and verifying banknotes. You may be able to make use of such equipment through prior arrangement with whoever controls the venue.
ATMs or tellers are a great way to know that the money you receive is legit, without having to verify it yourself. Ensure that you watch your trading partner withdraw the money. Request that the cash be kept in view until the trade is concluded, as this will prevent any switching for counterfeit cash.
To further increase the security of your trading, you can bring along some people as backup. They should be positioned with a good view of where the trade will take place.
Based on the above elements, here are some recommended secure venues:
Casinos are full of guards and cameras and usually feature metal detectors and access control too. As casinos routinely handle large amounts of money in a fairly unpredictable environment, their staff is usually well-trained to respond to any problems. Casinos are also a pleasant environment in which to conduct a trade. ATMs or even full banks are usually available within casinos. If your trading partner is willing to withdraw cash from an ATM or teller while you watch, you won’t need a counterfeit detector. Another option is to request that the casino’s cashier count and check the cash for you.
Bank lobbies are even more secure than casinos, as they offer a smaller and more contained area with an even stronger focus on preventing criminal behavior. They feature guards, cameras, metal detectors, access control, counterfeit detection and counting equipment, and ATMs. They’re also a comfortable and convenient venue to meet. By immediately depositing the cash you receive to your bank account, you can prevent any possibility of getting mugged as you leave the trading venue.
Courthouses might also prove suitable, as they generally feature all the above-listed secure elements besides ATMs, and counterfeit detection and counting equipment.
Police stations are similarly-equipped to courthouses, but staffed with even more “guards.” If you’re suspicious of your trading partner for some reason, then request that they meet you in a police station and explain the situation to a policeman before the trade takes place. It’s highly unlikely that anyone harboring criminal intentions would be willing to meet you in a police station!
No matter where you choose to sell your Bitcoin, remember that safety should be your top priority. If you’re ready to sell Bitcoin online now, we invite you to do so with Coinmama.