What Are The Benefits Of Giving Bitcoin As A Gift?
It’s true that bitcoin is notorious for its volatile price swings. Yet bitcoin is a disinflationary asset with a fixed supply. Many expect that the value of bitcoin will only increase relative to fiat currency as more people use it. Indeed, bitcoin is better than fiat money for some. What this means is that the recipient of your bitcoin gift can profit by simply holding on to this precious digital asset.
If you care about online privacy, bitcoin is also synonymous with being, well, pseudonymous. This means that a bitcoin wallet and address don’t even require that a real name be attached — even kids can receive and manage their own bitcoin — unlike traditional bank accounts.
Moreover, as a global asset, bitcoin can be used — and, of course, gifted — across borders.
Another benefit becomes clear when we consider the example of ecommerce businesses. They have often been more open to adopting new technology to support their hybrid workforces. To take advantage of lower transaction costs, many ecommerce companies now also accept bitcoin as a method of payment. That means bitcoin can be a versatile gift used for shopping and paying bills.
Even more impressive, you don’t have to give people a full bitcoin. Instead, you can buy a fraction — a much easier gift to commit to!
One way to give users bitcoin is via a regulated and reputable cryptocurrency exchange. Even better, there are now bitcoin-only exchanges such as Strike, Swan or River.
Bitcoin is now more convenient than ever to buy from exchanges. Bitcoin is ideal if you’re a beginner yourself or gifting to someone who’s new to the space.
Sign-up and register an account.
Add a payment method like a debit card, credit card, or bank account.
Click on the buy/sell tab.
Enter the amount you want to buy and the bitcoin is credited to the wallet connected to your account.
Okay, you’re now up and running. Assuming the person isn’t already an investor, now’s the time for them to set up their own exchange account. Perhaps you might even help them? Once they’ve signed up, you can transfer bitcoin to them directly using their wallet.
Recipients will need to complete some simple security measures such as “Know Your Customer” (KYC) compliance, which will vary between exchanges.
It’s possible to store bitcoin on the exchanges where it is purchased, though it’s not advisable over the long term. Still, for gifting bitcoin to new users, it’s an okay starting point for a modest amount of value.
Gift cards are another appealing way to give bitcoin as a gift. Some exchanges allow you to send bitcoin gift cards from their platform or app. Binance, for example, even lets you design the card yourself and deliver a personalized message.
Simply find a trustworthy bitcoin gift card provider, fill out your order and pay for it. Once the payment goes through, a gift card worth the amount that you deposited will be emailed to the address provided. In order to redeem the card, the recipient just has to enter the code displayed on the card on the website.
That said, exercise caution and make sure to choose a well-known provider with good reviews; many people fall victim to gift card scams.
3. Hot Wallets
You can also gift Bitcoin to someone by setting them up with a bitcoin wallet solution. Hot wallets on phones are the easiest and cheapest way to set someone up with sovereign control of their bitcoin.
Both Android and iOS have several options for hot wallet solutions, so users should take the time to do their own research and examine the solutions that fit their needs best. Once you have found a good match, you can introduce the receiver of your gift to the same application, and walk them through the process of setting it up. A hot wallet should allow the user to hold their own private keys in the form of a seed phrase, without necessitating an account of any sort be set up. However, keep in mind that hot wallets are not as well-trusted as hardware wallets, as the living of a hot wallet on your cellphone leaves it exposed to the internet and software exploits. They are, however, a step above holding bitcoin on an exchange.
If you’re gifting large sums with your recipient fixin’ to make a fortune, it makes sense to provide them with a secure device.
4. Hardware Wallets
According to industry experts, one of the best and most secure storage solutions is the hardware wallet. These are virus-proof USB devices that keep private keys safe, secure and offline at all times.
They protect your private key through a dedicated hack-resistant chip. Ledger, Coldcard and Trezor are some examples.
Never purchase or gift a hardware wallet that has already been removed from its packaging. The entire purpose of the hardware wallet is to be tamper-resistant, and any indication that the wallet has been modified could spell out trouble. If, for example, someone had opened the wallet up and replaced the internals, it could be a dedicated theft device.
Upon receiving the hardware wallet gift, the recipient should follow the instructions to set it up. Store the recovery seed in a safe place. Then you can send them bitcoin in a safe and secure manner.
5. Physical Coins
Buying physical coins like the Denarium coins makes for an altogether fancier gift.
They boast a beautiful design, come in an impressive-looking package and, most importantly, can be used to store your bitcoin.
Each physical coin contains a unique address and private key located underneath a secure hologram. In addition to being a unique way to hold bitcoin, these coins are shining collectibles in their own right, whose value could appreciate.
Note that one alternative to this is gifting an Opendime, a USB stick that allows users to physically pass along custody of bitcoin.
Start Investing In Someone’s Future Today With Bitcoin
The technical challenges of getting off the ground with bitcoin is what discourages many nocoiners. By gifting to complete novices, you can help them with the heavy-lifting of starting their bitcoin journey.
Minor hassles such as having to research your jurisdiction’s tax requirements aside, it’s no surprise that a great many people are embracing bitcoin as an exciting and modern gift idea.
Regardless of which side of the fence you’re on regarding bitcoin’s prospects, it is a smart gift to allow someone to dip their toe into the world of bitcoin.
By gifting bitcoin to the next generation, you’re giving them the opportunity to learn about saving and financial independence.
This is a guest post by Koa Frederick. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.