Giving cryptocurrency as a gift is easier than you think – CNET
Against a backdrop of persistent economic uncertainty, rising inflation and global supply chain issues, what if you could find a holiday gift that’s highly available and easy to give? And what if that gift also straddled the line between the strategic and the strange? Yes, we’re talking about cryptocurrency.
Though most Americans know about cryptocurrency, only a small percentage of them actually hold crypto. If you’re one of the few, here’s your chance to blaze the trail for your friends and family.
Unlike in the past, it’s now simple to give the gift of cryptocurrency — even to those who don’t know the difference between a hardware and software wallet or don’t have an account on a cryptocurrency exchange. And you don’t even have to give a whole bitcoin, which currently costs more than $50,000. You can send minute fractions of a cryptocurrency, starting at less than $1.
We’ll focus here on the big, popular players that have made it simple to securely give cryptocurrency to friends and family — even if you or the recipient have never dabbled in digital money before.
Cryptocurrency made simple
An increasing number of mainstream financial apps, including PayPal and Venmo, have already made it relatively easy to buy and send cryptocurrency — though some charge higher fees than crypto-focused apps and exchanges. And not all of them make it easy to send cryptocurrency as a gift, especially to people who don’t already have accounts.
In March, Cash App debuted a new feature that made it possible for users to send bitcoin to anyone with a phone number or email address. Today, Coinbase unveiled a similar feature, making it easy for account holders to send bitcoin, ether and several other cryptocurrencies to anyone with an email address — regardless of whether they already have a Coinbase account.
There are other ways to give cryptocurrency as a gift without using a centralized exchange and financial app. Those will require more technical know how. And regardless of how you give the gift, it’s worthwhile to provide your recipient with a disclaimer: The world of cryptocurrency can be a wild place where scams and misinformation are common.
How to send cryptocurrency on Coinbase
To send cryptocurrency as a gift, you’ll need a Coinbase account. Starting today, you’ll be able to access the gift feature on the company’s app and website. On the menu on the left side of the screen, select “send a gift.”
The new gifting feature allows you to send five different assets — bitcoin, ether, litecoin, bitcoin cash, stellar lumen — to anyone, including people who don’t yet have a coinbase account. All you need is their email address. The email contains directions about how to set up a Coinbase account and claim the gift. The email also includes a digital card featuring “crypto-minded artwork.” There are no fees beyond the cost of the cryptocurrency you are gifting. If the recipient already has an account, you can send them any of the assets Coinbase supports (there are more than 100).
Coinbase allows you to cancel the transaction at any time, until the recipient creates their account and claims the cryptocurrency. If the person doesn’t create an account within 30 days, the transaction is cancelled automatically.
Gifting cryptocurrency with Cash App
Cash App is a popular money transfer service owned by Square, the same company that owns Twitter. One of Cash App’s features is the ability to send bitcoin to other people. This app makes it quick and easy to gift crypto.
However, your choice of cryptocurrency is limited to bitcoin. At the moment, Cash App doesn’t support any other assets, which makes the platform somewhat restrictive for cryptocurrency enthusiasts. But if the recipient is new to digital currency, then bitcoin is likely the one asset they might know.
To send bitcoin to another Cash App user, you’ll need the person’s address on Cash App, which is called a $CashTag. Once you have the $CashTag in hand, navigate to the bitcoin tab from the home screen. Then tap the airplane button and select the amount you want to send and the person to send it to.
If the person you’re sending to doesn’t have a Cash App account, you can send bitcoin to them using their phone number or email address. The person who receives your gift will then be prompted to create an account and accept the bitcoin. If the recipient doesn’t create an account within 14 days, the bitcoin will go back to your account.
You can send as little as $1 in bitcoin using this service. You can find the full directions on the Cash App Website.
Giving a cryptocurrency wallet as a gift
Alternatively, or in addition, you can give someone a cryptocurrency wallet as a gift — with or without anything in it. These are hardware wallets that plug into your computer via USB port. If you do decide to set up a hardware wallet for someone as a gift, make sure to follow the manufacturer instructions closely and keep track of the key phrases once you set the wallet up. Trezor and Ledger are two reputable manufacturers that offer models ranging from $60 to $200.
A note about taxes
Generally, the IRS focuses its interest on gifts of $15,000 or more. So, if you’re just sending $50 in bitcoin to your cousin, you shouldn’t have to worry about the tax implications. The IRS has helpful pages on gift taxes and virtual currencies to help you navigate the details. And when it comes to reporting your transactions in April, taxes usually kick in only when you sell or trade.
Real risks and potential rewards
In this year alone, the price of a single bitcoin has fluctuated wildly — from a low of about $30,000 to an all-time high of more than $65,000 in November. Plenty of people have made money through cryptocurrency speculation, but it’s just as easy to lose money. Though it could make a fun gift for the holidays, keep in mind that cryptocurrency assets are highly speculative, and if you buy them, a good rule of thumb is to invest no more than you’re comfortable losing. It’s also worth noting that cryptocurrency is a common tool in online scams and that cryptocurrency transactions — once completed — are generally final and irreversible. Once you send some crypto, it’s as good as gone forever. Do your homework, be skeptical and have fun.
via CNET News https://ift.tt/2dX8g0J
December 2, 2021 at 09:57AM