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Beginners guide to sending money with Bitcoin and stablecoins

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Cryptocurrencies are ideal for sending money from anywhere to anyone, at a much lower cost and greater speed than bank transfers or other traditional channels. If you’ve never made a transaction with crypto before, we’ve got you covered.

This beginner’s guide to sending money with crypto using either bitcoin or stablecoins will help you get started.

Basics: wallets and addresses

To send and receive bitcoins and stablecoins, the first thing you need is a wallet like the Bitspark mobile app. A cryptocurrency wallet is essentially a software program that stores your private and public keys. Those keys are needed to interact with the blockchain and complete a transaction. Money is sent to a wallet’s address, which can be generated at no cost using an account at an exchange or online wallet service.

While a physical wallet is where you keep your dollar bills, a crypto wallet does not actually store the crypto coins. All that exists are the records of transactions committed to the blockchain, and it’s the keys in your wallet that allow you to take part in those transactions.

When someone sends you bitcoin, for example, they are signing off ownership of the coins to your wallet’s address. If you want to spend your bitcoin, the private key stored in your wallet needs to match the public address to the coins assigned to on the bitcoin blockchain. When the keys match, your balance will decrease and the receiver’s balance will increase. With crypto transactions, there is no physical or digital exchange of real coins, but rather a record of transactions on the blockchain and a change in the respective balances of the wallets involved.

Bonus tip: Hot and cold wallets

Hot wallets are always connected to the internet and therefore more susceptible to hacks. Cold wallets are not connected and offer greater security when it comes to storing your crypto. If you need access to your funds frequently and can’t go completely cold, maintain a ratio of 20% in hot and 80% in cold wallets.

Buying crypto at a crypto exchange

Now that you have a wallet and an address, it’s time to fund your accounts. The most common and easy way to buy crypto is at an exchange. There are many different crypto exchanges out there, but a good place to start is to find one that can serve you in your jurisdiction – some governments have taken a very restrictive approach to crypto and as a result not every exchange will be available to you.

If you buy from a centralized exchange, the coins you buy will first be stored in a wallet associated with the exchange itself. They have the power to freeze your accounts and worse yet if you leave your bitcoin or stablecoins in that wallet you are trusting them with securing your funds from exchange hacks. When you buy crypto from a centralized exchange, it is advised you move the coins to a wallet that you own independently. That puts you in charge of your own coins.

For security reasons, it is always safer to buy and sell crypto on a decentralized exchange. On a DEX, you interact with other traders directly using a wallet that you own. In keeping with what crypto is all about, you are the only one in control of your funds. As an added bonus, transaction fees are typically far lower on a DEX than on a centralized exchange.

P2P trading

Peer-to-peer (P2P) cryptocurrency trading refers to the direct exchange of cryptocurrencies between two parties without the need for a central intermediary, such as a cryptocurrency exchange. P2P trading allows individuals to buy and sell cryptocurrencies directly with each other using a variety of methods, including online platforms, social media groups, and in-person meetings.

P2P trading can offer several advantages compared to traditional cryptocurrency exchanges. It can be more private, as it does not require the creation of an account or the sharing of personal information. It can also be more convenient, as it allows individuals to trade directly with each other rather than having to go through a centralized exchange. Additionally, P2P trading can be more flexible, as it allows for a wider range of payment methods and the possibility of negotiating terms and conditions directly with the counterparty.

However, P2P trading also carries some risks. It can be more difficult to find a trustworthy counterparty, and there may be more potential for fraud or scams. Additionally, P2P trades are not protected by the same regulatory framework as centralized exchanges, so there may be less recourse in the event of a dispute. For these reasons, it's important to exercise caution and do thorough research when engaging in P2P cryptocurrency trading.

Sending money: Bitcoin or Stablecoins?

While bitcoin is the most talked about cryptocurrency as it’s the one that sparked the crypto revolution, it is not necessarily ideal for making payments. Simply put, the volatile price fluctuations make bitcoin unsuitable for small and frequent payments.

Stablecoins on the other hand are perfectly suited for making payments. Cryptocurrency stablecoins are digital assets that are designed to maintain a stable value relative to a specific asset or basket of assets. They are typically pegged to a fiat currency, such as the US dollar, or to a commodity, such as gold. The goal of stablecoins is to provide the benefits of cryptocurrency, such as fast and cheap transactions and access to decentralized financial applications while mitigating the volatility that is often associated with cryptocurrencies like Bitcoin and Ethereum.

There are several different types of stablecoins, each with its own unique features and characteristics. Some stablecoins are backed by physical assets, such as gold or silver, while others are backed by fiat currency held in a bank account. There are also algorithmic stablecoins, which use a set of rules or algorithms to maintain their value, and collateralized stablecoins, which are backed by other cryptocurrencies or other assets.

One of the most well-known stablecoins is Tether (USDT), which is pegged to the US dollar and backed by physical assets held in reserve. Other popular stablecoins include USDC, DAI, and Paxos Standard (PAX).

Overall, stablecoins can offer a more stable and predictable store of value compared to other cryptocurrencies, and they can be useful for conducting transactions, making payments, and preserving wealth in a volatile market. However, it's important to carefully research the specific features and risks of any stablecoin before using it.


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