Author: G Money Horder
Mon Jul 15 2019
THE EARTH - There are so many different things that I could write about today from tRump slamming the existence of cryptocurrency, to the ever fluctuating volatility of Bitcoin. But since everyone is already writing about that stuff, I figured I'd take the angle of, "what happens when things go tits up and it's time to bail?".
This is a sensible course of thought because those 2 things that I just mentioned are actually an excellent reason to start developing an exit strategy. I'm not talking about today, right now. I'm not advising everyone to fold up their tables and walk away. I'm just suggesting that you might find it helpful to know how to, if it came to it. Because there is a good chance that this whole thing could collapse. And when it does, there are going to be 2 kinds of people: Those that sold and got something back, and those that didn't and are now holding what amounts to a bunch of very inconvenienced electrons.
I'm not saying that this is a pyramid scheme. But if something looks, acts, and shares basic similarities to a pyramid scheme, then it might be one. At least a little bit. If this statement comes as a shock to you, then you really probably shouldn't be in this game at all. Because you are already in trouble. I recently read (and I agree with this), that there are really only 2 ways that this crypto thing can go, and both are bad. Either it will do lousy and collapse. Or it will do great, and we will find ourselves with a massive unregulated currency that will be used for everything under the sun that is not legitimate business. This is already happening, of course. Such is the way of every type of new business.
Look, let's be serious... If it's not exactly a pyramid scheme, the entire system is full of scams, unfairness, fees, and ways to take your coins from you as you are trying to make money yourself. For every digit you make, someone else is making money off of it too. Even when you lose money, someone will make money from your loss.
So, how does one cash out?
In theory, you should be able to simply consolidate all your coins on your favorite exchange, then withdraw them to one outside wallet. That is probably the simplest explanation and it's a good start. But it doesn't tell the whole story. For one thing, whatever coins you have on that exchange are going to have to be sold at a loss (or less than you wanted), and you will have to pay commissions for each of those sales. Then you will have to pay a large commission when you withdraw to your offsite wallet. Expect that about 10% of your holdings will go to other people on the way out.
Even if you already have a bunch of coin in cold storage, it can be expensive to convert it to actual currency. Here is an excellent example of a move I made yesterday simply as a test, and to see what it would cost me if I decided to leave crypto altogether. I had a DOGE wallet with about 12,000 DOGE. How do you get that to US Dollars? Pffft... Not easy. There is no direct method to convert DOGE to USD at all. You need to invoke an exchange for more than a couple of steps. This is what I had to do:
Each one of those moves cost me a little more. I started out with about $38 in DOGE, and ended my journey with about $31 in BTC. So I am already down some 20%, and I haven't even converted it to USD. Even though I included that on my list, I skipped that step. Why? Well, part of the reason I chose to do this at all was because BTC is in a slump. Now is a good time to buy. Lousy time to sell. So I will wait until it goes back into the $12k area before making that final move.
The bottom line is that no matter how you choose to do that final conversion to get your coins off of the blockchain and into actual currency, there are going to be costs involved. The more steps, the more it will cost. The only closing advice I have for this is in 2 parts:
Hope you find this all to be helpful.
BTC Follows Oil, Evidently
Is there really free money out there?
Cashing Out is Expensive