Mainstream is showing increased interest in cryptocurrencies as the Bitcoin (BTC) price continues to reach record levels. To put this interest into perspective, researchers at the Cambridge Center for Alternative Finance recently discovered that 101 million people worldwide currently own bitcoin and other digital assets. The report notes that in 2018, an estimated 35 million users of digital assets with verified identities were estimated to have reached 35 million users worldwide.
Given this growth, it should come as no surprise that cryptocurrency holders have dreamed of donating cryptocurrency this holiday season. Demands for social distancing in the midst of the pandemic have led to virtual holiday collections and electronic gifts being sent to different regions.
While the idea of giving a cryptocurrency to friends and family may seem appealing, there are some considerations to keep in mind before sending it to your loved ones, especially beginners.
Education comes first
Bill Zilke, marketing manager at BitPay, a leading Bitcoin (BTC) service provider, told Cointelegraph that person-to-person sending of cryptocurrencies has always been popular, indicating that the company expects more consumers to do so this holiday given the beef market. “While Bitcoin is still the preferred cryptocurrency for purchases, XRP and ETH (ETH) have increased in popularity, accounting for 8% and 7% of BitPay transactions, respectively,” he said.
However, when it comes to sending a cryptocurrency to new users, Silke explained that education is the key because there are so many coins and several ways to store them. Questions also arise, such as whether the used wallet is open or not restricted. Perhaps most importantly, the recipient of the cryptocurrency needs to know what these terms mean.
This is where the saying “Not your keys, not Bitcoin” may come to mind. While hardware and paper wallets are known to be the most secure forms of storing cryptocurrencies, there is enormous responsibility associated with these mechanisms.
Dave Jeevans, CEO of CipherTrace blockchain exploration, told Cointelegraph that when sending a cryptocurrency to a novice, it is very important to make sure they understand this basic rule: “your value, your responsibility.” Jevans shared that it is important for beginners to understand the importance of protecting their private key, storing redemption phrases and having a safe place to store cryptocurrency after receiving it, otherwise there is a risk of losing access to funds.
For those considering a more popular approach, Crypto Wendy O, one of the crypto-YouTubers, told Cointelegraph that she recommends that new users create an account on a popular exchange:
“I do not like the idea of creating a beginner’s book or paper wallet because it is difficult and very unrealistic. If the user loses their private keys, they disappear in these cases. For example, with Coinbase or Celsius, you can access cryptocurrencies more easily.”
While Coinbase is one of the most popular digital asset platforms in the United States, there are flaws in the service. Coinbase and other popular exchanges like Binance face technical problems as the bitcoin price rises. While regular crypto users may be aware of this service outage, it can be very dangerous for a beginner.
Alternative ways to donate cryptocurrency
Although sending cryptocurrency directly to another user via a wallet address may be the most popular way to donate cryptocurrency, options such as gift cards and ATM coupons should also be considered.
Zilke shared that BitPay has seen an increase in the number of users converting cryptocurrencies to gift cards. “During November and December, cryptocurrency gift card purchases were the most successful category,” he said. Since well-known retailers such as Amazon accept Bitcoin gift cards purchased through many of Crytpo’s special services, this can be a great option for providing cryptocurrencies to beginners.
In addition, Jevans noted that ATMs with cryptocurrencies such as Coinme can give depositors coupons that anyone can redeem. While it may be a great gift option, Jevans notes that a KYC check is required to deposit $ 250 or more at most Bitcoin ATMs in the United States.
Donations from cryptocurrencies are also increasing
Aside from offering cryptocurrency to friends and family, cryptocurrency donations are also a great way to get your money back this holiday season. Interestingly, a number of new fundraising opportunities related to cryptocurrencies have come this year from large charities.