As cryptocurrency is the new cash, you can give someone cryptocurrencies as a gift without them knowing and they’ll be thrilled!
With the rising interest in cryptocurrencies, many people are thinking of using them in different ways, and ofcourse, gift is something you can come up with too.
Well-known coins like Bitcoin and Ethereum keep hitting record highs everyday and investors are buying up these digital assets with Venmo or Cash App. And what can be better than giving away a gift that can help your loved one earn more in the future.
There’s also apps where you can trade cryptocurrencies like Robinhood which has been gaining popularity lately because now trading is easier than ever before. You can do this all while being safe from hackers who want to access your personal information so they can steal funds off accounts unprotected by passwords alone.
Whether you want to give your loved one cryptocurrency or help them invest in the blockchain, this blog will help you understand about giving away cryptocurrencies as gifts.
I am going out on a limb for this one and assume that if you have been looking at investing in cryptocurrencies or planning to gift them to someone but aren’t sure where you should go then maybe an informative article could swing things your way.
How To Gift Cryptocurrencies
When it comes to giving a gift, there are many different cryptocurrencies available. But one should stick with well-known coins like Bitcoin and Ethereum (ETH).
There are other options to consider, like a stablecoin. A crypto that’s pegged and has lower transaction fees than cryptocurrencies.
Cryptocurrencies are an exciting new technology that has the potential to change everything we know about finance, but there’s a lot of risk involved. Only time will tell which cryptocurrencies will succeed and which ones don’t make it past this initial wave – so proceed with caution!
Crypto gifts are all the rage these days, but if you want to make sure that your recipient keeps hold of their crypto for longer, it might be better off to give them an established coin instead.
Learn more in detail about how cryptocurrency gifts work. This informative video by aantonop, explains very beautifully about gifting cryptocurrency.
You Can Get Cryptocurrencies Gift Cards
Give the gift of Bitcoin or another cryptocurrency in a thoughtful and personal way to show someone just how much you care. And you can do that by giving them a cryptocurrency gift card.
Now you can send bitcoins as a gift and never worry about losing the recipient’s embrace of appreciation! Some platforms, like BitCard or e-Gift card from Coinbase allow users to add dollar bills onto their cards which they can redeem in exchange for crypto.
Now you can give the perfect crypto gift card for any occasion with just a few clicks. Choose from pre-designed templates and write down a personalized message for your loved one.
Watch out for scams! You don’t want your hard earned money going to some random guy on the internet, right? Cryptocurrency can easily be sent and received which makes it an attractive form of payment in today’s world where everything seems suspicious.
The best advice we can give you about these types of frauds? Don’t trust anyone who asks for your personal information unless they’ve shown some proof that their company exists in reality!
The Federal Trade Commission recently issued an alert to all cryptocurrency holders, telling them that if anyone requests payments with your digital currency and asks for it upfront or pays using gift cards then chances are they might be scammed.
They advise to only use well-known platforms that provide proof over time as being reputable businesses in their field – so don’t fall victim!
You Can Use A Cryptocurrency Exchange
The lead product manager at the cryptocurrency exchange Gemini, Franck Kengne, said that cryptocurrency exchange is one of the most credible and safe ways to give crypto. In addition to acquiring cryptocurrency, users can also send, reserve, and buy more cryptocurrency if they desire.
If the receiver wishes to buy more crypto in the future, he will be asked to generate a crypto account with the exchange and add a payment method like a credit card or debit card, or bank account.
Franco kengne says that the receiver will then share his public key with the sender— the key will act as a wallet address. The public key can be a long series of spontaneous letters or a sequence of numbers, or a QR code.
The sender will then use their crypto wallet and scan the QR Code or copy and paste the public key into the recipient field. The receiver will then open their crypto wallet to receive the payment. That’s it; you have acquired your cryptocurrency.
The procedure may vary for other exchanges, but you can find manuals on how to send crypto for a particular exchange, such as coin base and binance.
In December, Robinhood introduced a crypto gift feature that allows users to send seven cryptocurrencies via the trading app, including Bitcoin, Ethereum, and Dogecoin. Though not an exchange, you can also send bitcoin as a gift on the cash app.
Storing Cryptocurrencies: Crypto Wallet
A crypto wallet like a ledger or trezor is required to send and receive crypto. These crypto wallets securely store your money.
There are many different wallets available, and there are several factors to consider while choosing a wallet. For instance, whether you are a beginner using a crypto wallet, want to use your wallet for only bitcoin or other cryptos, or want access to your wallet via phone or computer.
Paper wallets
You can get a crypto-wallet as long as you have a public key and a private key—your public key acts as an address that you can share with other users to receive cryptocurrency. The private key is proof that you are the deliberate recipient of the transaction, and this key is just for you.
Paper wallets can not be hacked, so they were once super secure and reliable, but presently paper wallets are not the suggested method of reserving cryptocurrency.
A paper wallet consists of paper with a QR code printed on it and keys. An online generator like WalletGenerator.net can generate these keys and QR codes.
To use the paper wallet for crypto, you will be required to sweep the crypto into an exchange like coinbase by scanning the code or typing the key information, or you can also use a live wallet.
Although the benefit of a paper wallet is that it cannot be hacked, the generators or the networks your information is on can still be hacked. Moreover, you can lose your crypto forever if you damage or lose your paper wallet.
Cold storage
Your private key is kept offline, often on a piece of hardware such as a USB Drive by cold wallets.
This feature makes a cold wallet challenging to hack because a hacker needs your hardware wallet and password to hack your cold wallet. It also means that if you lose your cold wallet without any backup, you will lose your crypto forever.
Hot storage
Hot wallets are connected to your internet and are digital.
You can get to your hot wallet through your phone or computer, or from anywhere there is an internet service, and this feature makes these hot wallets super accessible and reliable.
But the very same feature of the hot wallet makes them super vulnerable for hackers compared to cold wallets. While trading on a platform like Robinhood, you might need a custodial wallet, and while such trading, the platform holds your wallet and not you.
How Are Cryptocurrency Gifts Taxed?
It won’t be taxed as long as cryptocurrency is below the gift tax allowance ($15,000 ) as of 2021.
However, if the gift recipient sells the cryptocurrency you give them and makes money on it, that profit will be taxable because the IRS treats cryptocurrencies just like property.
Much like stocks, the cryptos are also taxed. So if the seller held the cryptocurrency for less than a year, they would owe short-term capital gains tax, and similarly, the seller will owe long-term capital gains tax if they held the cryptocurrency for more than a year.
Educate Your Driends And Family About Crypto
You might have some explaining to do if the fortunate recipient of your crypto gift does not recognize their blockchain from the supply chain.
The recipient must realize how to store the crypto gift securely, and that’s the most crucial thing to consider. If your gift has got the recipient’s attention, you must clarify where they can find more about it.
Remember that cryptocurrency won’t be good for everybody as a gift. If you are a crypto fanatic, the steps below will help you put some crypto under the Christmas tree.
Decide which cryptocurrency you would like to gift
Though there are thousands of different cryptocurrencies, it makes perfect sense to select the better-known coins such as Bitcoin, Ethereum (ETH), Cardano (ADA), or even Solana (SOL) as a gift. Crypto that’s pegged to a stock like the U.S. dollar, such as a stablecoin with a low transaction fee, can also be considered a gift.
Wrapping Up: Decide How You Would Like To Gift The Crypto
There are several ways to gift your crypto, just like giving cash. However, you will need to buy cryptocurrency before you can gift it to someone.
Use a crypto exchange if the person you are sending the crypto already has a crypto wallet. The crypto exchanges also provide crypto gift card facilities like Coinbase and Binance, requiring a crypto wallet.
You can also use a crypto gift card available on several crypto exchanges. Make sure to look for reviews online to avoid scams.
You can also use a paper wallet for this purpose. A public key and a private key are required for a cryptocurrency transaction. You can consider the public key as your bank account and the private key as your PIN of that account. The paper wallet is practically a safe way to gift crypto.
If buying for a crypto enthusiast, a hardware wallet might be a good idea. Hardware wallets are small devices kept offline because they are less likely to get hacked.