Steps on converting Bitcoin to different currencies

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Bitcoin offers an alternative to centralized banks and is a tradeable currency, making its value easily accessible through various online conversion methods.

An online search of the word revolution will provide you with an almost instantaneous definition, it is “a forcible overthrow of a government or social order, in favour of a new system.”

The creation of Bitcoin was not forcible, but it intended to overthrow or at the very least, provide an alternative to the ‘old system’ of centralized banks.

Regardless of your Bitcoin beliefs, or its place in modern finance, this form of currency is here and tradeable. If you have been lucky or wise enough to have bought Bitcoin at a low, you might be looking to ‘cash out’. Determining its value can be done by typing something as simple as BTC to GBP or BTC to USD into a search engine.

On such sites, you will have to access to up-to-date cryptocurrency conversion rates, conversion tables, historical price data, Bitcoin news tailored to both beginner and intermediate Bitcoin level readers and a FAQ’s section. These sites are a great way to run regular conversion checks, which help you calculate what your Bitcoins are worth in your local currency. Done over time, this allows you to see market trends and decide on the right time to buy or sell.

Read on to find out which conversion method suits you.

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A brief history

Bitcoin was not the first iteration of cryptocurrencies, but it is certainly the most popular. It is one of the earliest cryptocurrencies, with the most trade volume by far. The immense size of this digital currency, has lured banks, private equity funds and even governments into the crypto frontier.

The first online appearance of Bitcoin was in August of 2008, when the domain bitcoin.org was registered. With the first transaction of 10 Bitcoins happening a few months later, in January of 2009.

The first notable retail transaction involving physical goods was made on the 22nd of May 2010. By exchanging 10 000 Bitcoins for two pizzas from the popular American pizza franchise Papa John’s located in Jacksonville, Florida. The Jacksonville resident, Laszlo Hanyecz, posted in an online forum and offered his Bitcoin to anyone who could order him two pizzas. A forum user, Jeremy Sturdivantuser, from England accepted the online offer and proceeded to order the pizzas to be delivered to Hanyecz. The 10 000 Bitcoins were worth approximately 40 USD at the time of the online exchange. Those same 10 000 Bitcoins would be worth a little over 580 million USD, as of writing in July of 2024. The event would become infamous among crypto currency aficionados, as ‘Bitcoin Pizza Day’.

Bitcoin prices, valuations, transactions and news were typically negotiated and shared on the Bitcoin forum. These days, users hold their Bitcoin in personal cryptocurrency wallets and transact through online exchanges.

Bitcoin conversion in practice

Bitcoin is classed as a digital asset. Meaning it must be exchanged for fiat currency before it can be withdrawn as actual cash. A fiat currency is a national currency, such as the dollar or pound.

Similar to fiat currency, the value you receive when selling your Bitcoin depends on the cryptocurrency market and the levels of supply and demand. Users need to be aware that exchange fees can be added to both the buying and selling of Bitcoin. Competition among exchanges has seen fees drop from low single figure percentages all the way down to tenths or even hundredths of a percent.

Now that you have decided on a suitable exchange and are happy with rates charged, the process selling your Bitcoin can begin. The Bitcoin is converted to fiat cash, which is stored in your exchange account. Meaning that you will have created a fiat wallet as well as a crypto wallet.

After your Bitcoins have been converted to fiat currency, you can link your bank account to the wallet and transfer the funds over. Setting up a crypto wallet often requires the same documentation of ID and proof of residence, as would be asked of you when opening a regular bank account.

Liquidating your Bitcoin outside of exchanges by using a Bitcoin ATM is also an option. This process is unfortunately not as simple as drawing fiat currency from an ATM, as the ATM essentially acts as your exchange, meaning that you would convert your Bitcoin to fiat currency on it and then be able to withdraw the funds. There are processing times involved when drawing from a Bitcoin ATM, possible admin fees as well as the need to find a Bitcoin ATM in your vicinity.

The alternative is to buy products directly using your Bitcoin, such as clothing items, gift cards, hotel stays and airline tickets. Your Bitcoin can be linked to your fiat card, meaning you are essentially cashing out by making purchases of regular products.

A final thought

As with most ways of spending your money, comparison, frugality and thought are required. The same goes for buying and selling cryptocurrency, such as Bitcoin. Do your homework, as you would when buying or selling a car or home. As soon as you trade fiat currency for cryptocurrency, that cryptocurrency becomes an asset. Assets can appreciate and depreciate in value. A smart investor or trader, of any commodity or asset, will do their homework and understand the market as a whole, and all fees involved, before taking a step.

Read more: Crypto miner Marathon Digital adds $100m in Bitcoin to reserves

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