Need a belated, last minute Christmas present on the fly? ExpressVNP has you covered!
Bitcoins don’t exist in physical form (some say they don’t exist at all!). In practical terms, they are just numbers in a distributed ledger called The Blockchain.
Nonetheless, everyone is talking about them. From financial newspapers to the daily news, Bitcoin surely is creating a lot of buzz. Everyone has their own story of how they got in, out, or feel they missed the frenzy.
So why not give Bitcoin as a gift? This guide tells you how.
Step 1: Create a Bitcoin wallet
If your contact already has a Bitcoin wallet, and you know their address, gifting Bitcoin is trivial. You simply need to send the Bitcoins to the address given to you. Done.
But most of the time your friend or family won’t have a Bitcoin wallet, and you’ll have to create one for them.
Look for a wallet that might suit them—if they have an Android phone, you might choose from our list of best Android wallets. If they use iOS, we have a list for that too. If they use a PC, or you do not know their platform, you may opt for Electrum wallet or Copay.
Name the new wallet after your friend and generate the backup seed.
This seed, typically 12 or 13 words, can be written on and gifted in a great greeting card!
Step 2: Explain how Bitcoin works and how to redeem the Bitcoin gift
It is never a good idea to generate Bitcoin private keys on behalf of someone else. It is a security risk and requires people to put trust in each other’s information security, which is unnecessary and increases the attack surface for anybody trying to steal your money.
Instead, the beneficiary of your gift should create their own wallet on a platform they like and trust, redeem your Bitcoins, and transfer them to a wallet of their own.
To do that, you may need to write up the steps necessary to redeem the Bitcoins, which may look something like this:
- Download the Bitcoin wallet app they intend to use
- Create a new wallet and back up their new seed phrase
- Download the wallet you used to create the gift
- Restore the gifted wallet from backup
- Transfer the Bitcoins to the newly created wallet in an app of their choice
Should you give a gift with conditions?
Admittedly, many of your friends and family may think Bitcoins are worthless, a tulip mania, or a bubble due to collapse shortly.
Often, when Bitcoins are given as a gift—especially when it’s a small amount—the beneficiary forgets about it or keeps the coins in an insecure place (like their email inbox, dropbox, or an online note-keeping service).
However, when the price of Bitcoin goes up, they will remember your generous gift only to discover it to be lost, or stolen. The disappointment and frustration will probably turn your gift into a stressful experience that you wish you had not made.
Instead, it’s a good idea to create ‘conditions’ to the gift. For example, you might state that the beneficiaries only have 2-12 months to redeem their Bitcoins, after which you will take them back. And their loss (bah humbug)!
If you do threaten to recall the Bitcoin, it’s very important to explain how keys work, and how you can ‘take back’ the Bitcoins you gifted. Otherwise, it may seem very strange to gift an uncensorable irreversible cryptocurrency and be able to take it back.
Use Bitcoin to buy a real gift!
If you want to talk about Bitcoin, but also want to gift something real, consider buying something with Bitcoin.
But you can still casually mention that you bought it with Bitcoin, of course. If your friends or family want to talk about it, they will surely ask you about your experiences, all without the pressure of having to deal with the technology and the risks directly.