How to Gift Crypto and NFTs this Holiday Season
- Traditional presents are becoming less popular as digital assets are gaining popularity in the modern era.
- This holiday season, giving crypto or digital artwork makes for a trendy and unique present.
- Non-fungible tokens (NFTs) are digital items that are original, unique, and non-interchangeable. NFTs are also stored on a blockchain.
As the holiday season approaches, many people struggle to find the perfect present for their loved ones. Although traditional gifts are still very popular in the United States, the gifting of digital art or cryptocurrency is becoming widely accepted.
If you’re tired of giving out gift cards, consider giving your loved one bitcoin cash or an exclusive digital file instead, otherwise known as an NFT. By gifting them a new and trendy NFT project, or cryptocurrency, they’ll be able to ring in New Year’s Eve in style. So how do you exactly gift virtual assets? Let’s dive right into it.
What is Cryptocurrency?
Cryptocurrency is a digital currency. Similar to dollars, pesos, and euros, cryptocurrencies can be used to purchase goods or services. In addition, crypto can also be exchanged for other currencies. The introduction of cryptocurrency is fairly recent as not long ago, our economy was comprised of only cash, debit and credit cards, and checks.
In today’s times, cryptocurrency has become extremely popular. However, unlike other currencies, most cryptocurrencies are highly volatile. This means their price can fluctuate rapidly and commonly. Nevertheless, despite the high risk involved, many companies, such as Microsoft and Subway, have started to accept cryptocurrency in exchange for goods and services.
Recommended Read: From Bitcoin to Blockchain. What Exactly is Cryptocurrency?
What are NFTs?
NFTs are non-fungible tokens. These tokens are simply digital items that are original, unique, and non-interchangeable. You cannot physically touch the items, as they’re 100% virtual.
The tokens are stored using blockchain, otherwise known as a technological database. The blockchain database securely stores information in digital format. In addition, blockchain technology allows for cryptocurrency, such as Bitcoin, to be handled securely.
Blockchain is also decentralized, which means the data in the blockchain is distributed to multiple network nodes located in spread-out locations. This allows for multiple copies of the digital record, making it secure and accurate without needing a trusted outside source to verify.
How to Gift Crypto
Crypto is growing in popularity, as an investment and due to the holiday season, as a gift also. The first step to purchasing crypto is deciding on which crypto to give. Once you have researched and decided which crypto to purchase, you will need to use a crypto exchange.
The next step is to find a Crypto Exchange or platform to purchase your crypto. Some examples include Coinbase, Binance, Robinhood, and Cash App. Finally, gift recipients will need to create their own account on the chosen Crypto exchange or platform.
After setting it up, the user can share their public key. The key may be a series of numbers and letters or a QR Code. Once you have a QR code from your recipient, copy and paste the public key into your own crypto wallet. Then, the recipient can choose to receive the payment via their mobile wallet.
How to Gift NFTs
NFTs can range in price point. Some NFTs are selling for as low as $10. However, the Ethereum transaction fees are very high. According to Business Insider, if you’re planning to gift Crypto, you should plan to spend a minimum of $200-$500 on your gift due to the fees.
The first step to purchasing an NFT is to search for one that meets your needs. OpenSea is a popular marketplace where you can buy, sell, and auction NFTs, rare digital items, and crypto collectibles.
Nifty gateway is another popular marketplace for NFTs. If you already have a crypto wallet, you can use the crypto in your wallet to buy an NFT. In addition, certain crypto exchanges, such as Coinbase and Kraken, also offer digital wallets if you need a digital wallet.
Recommended Read: Getting to Know the Two Leading Cryptocurrencies in 2021: Bitcoin and Ethereum
Once you have purchased Ethereum on a crypto exchange and moved it to your digital wallet, you can easily purchase the NFT of your choice. You can then gift your loved one the NFT you purchased by transferring it to their digital wallet. The NFT recipient can now also claim their digital gift with a cell phone number or an email.
What to Know Before Gifting Crypto and NFTs
Before gifting cryptocurrency or NFTs to your loved ones, it is important to understand the risks involved related to your investment. Therefore, it is recommended that you speak to a financial advisor to make an informed decision regarding your money.
Whether you’re exchanging presents for Thanksgiving day or New Year’s day, it is important to understand the gift tax implications that come with giving during the holiday season and beyond. Understanding the risks associated with giving your loved ones digital assets is equally important. Therefore, consider doing your due diligence and proper research before diving deep into the world of crypto and NFTs.