How to Store or Convert Crypto Earnings into CashSimple guide to using digital wallets and exchanges for your crypto
How to Store Crypto Earnings & Convert Them into Cash
It is fair to say that some of the best times for crypto mining are in the past. Certainly, if you had mined Bitcoin (even modestly) back in 2010, you could be a millionaire now! But even with increased hash complexity and fluctuating cryptocurrency prices, it’s still hugely profitable to mine crypto. Here we will look at how to store crypto and convert your earnings into cash.
How to store crypto earnings in a digital wallet
Just like in everyday life we have a physical wallet, cryptocurrency can be stored in a digital wallet, these can be either web-based or hardware-based (cold wallets). You can find more on this here. Digital wallets can reside on any digital device (e.g. your mobile phone, computer, etc.) or can even be paper-based.
You can store crypto offline using paper-based wallets
For paper-based wallets, private keys and addresses are written down, this gives an extra layer of security provided the security details are not found. Security is of paramount importance for all digital wallets and if breached could result in a loss of cryptocurrency from a third party.
What about exchanges like Coinbase or Binance?
Crypto miners can potentially have multiple wallets for each cryptocurrency they own, e.g., a Bitcoin wallet, Ethereum wallet or a wallet for any other cryptocurrencies. As you can imagine, it can become quite complex having to remember all of your wallets, security credentials and private keys. For this reason, crypto miners sometimes choose to store their cryptocurrencies directly on an exchange such as Coinbase or Binance.
What can you do on an exchange?
These exchanges often come with fees but they can be very powerful, providing features such as:
- Deposit funds from your bank account to the exchange, ready to you
- Transfers from one wallet to another, which will allow you to send your mined crypto to an exchange or combine all of your individual wallets into one place
- Buy crypto using your FIAT currency to invest
- Sell crypto to FIAT in order to take any profits or minimise losses
- Withdraw funds to your bank account
- Exchange or convert one cryptocurrency to another
- Speculate on crypto price movements to amplify your profits and losses
- Save/Earn/Staking all provide ways to lock your crypto in for a period of time in return for favourable interest rates
Taking advantage of price growth and achieving significant returns
Many crypto miners choose to store and invest at least a part of their earnings in a digital wallet for the medium-long term. This is because the miners want to HODL and benefit from any growth in the price of the cryptocurrency of their choice.
Provided security is in place, long-term digital wallet storage is a convenient strategy for crypto investors. This has parallels with a share portfolio where investors often hold for the medium-long term. Many financial advisors now advise at least a proportion of an investment portfolio is kept in cryptocurrency, which has higher risk levels than other investments but also offers higher returns.
Converting cryptocurrencies to a FIAT currency
Cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) are typically stored in a wallet until they are used.
One use is converting from a cryptocurrency to a FIAT currency. A FIAT currency is simply a government-issued currency, i.e., the coins and notes we use today. Popular currencies for conversion are US Dollars, UK Pounds and Euros.
Ways to convert cryptocurrencies are:
- Cryptocurrency exchange – as mentioned above, conversion of a cryptocurrency through an exchange such as Binance, Coinbase, and Gemini, etc.
- Cryptocurrency debit cards – these are available for popular currencies such as Bitcoin, Ethereum and Litecoin. Cryptocurrency is converted using a web application into funds on the debit card (e.g., Visa and Mastercard). These funds can be used just as we use a conventional everyday debit card
- Peer-to-peer exchange – cryptocurrency operates on a peer-to-peer basis. Therefore, currency can be transferred from one peer to another for payment. This is a potentially dangerous method and requires trust that you will receive the FIAT funds for your cryptocurrency transfer
There are numerous other ways of converting cryptocurrencies to a FIAT currency, these will vary from one currency to another with the most popular cryptocurrencies such as Bitcoin and Ethereum having more options.
Start earning cryptocurrency with Opace
Why delay your cryptocurrency mining earnings? Once you have your mining machine, we can advise on how to store crypto in a way that best suits your circumstances. You can get in touch with our team of experts who are on standby, waiting to answer any questions you have about the world of cryptocurrency.
Image Credits: Sergei Tokmakov
Last modified on: May 28, 2022
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