With the winter holiday season coming up ,gifts for crypto lovers would be popping up too, this would be a guide for buying gifts for crypto lovers.
A guide to buy gifts for crypto lovers
Buy a cryptocurrency first
Unless you’re familiar with crypto trading, your best bet is to stick with mainstream currencies like Bitcoin or Ethereum, and use well-established exchanges like Binance or Coinbase. Binance, for example, offers gift cards that can be sent directly to the recipient. Upon receiving the currency, the recipient would then need to create an account to access it.
The recipient would then transfer these funds into a dedicated crypto wallet, which stores the crypto securely and provides the recipient with the ability to trade the currency. As an alternative, you could purchase the currency first, and then place the funds into a wallet that is set up on behalf of the recipient (if the recipient already has a wallet, you can simply send money to that address).
A cryptocurrency wallets
Crypto wallets store digital tokens that enable you to make transactions, and they update a blockchain ledger every time a transaction is made. A wallet that is accessible online is referred to as a “hot wallet” because it is more vulnerable to online attacks, although they are easy and faster to use (CNET has some recommendations).
A “cold wallet” is another option, as it offers greater security since it’s accessed offline. Using a paper wallet is the simplest method, using a wallet generator site to generate keys and QR codes at random (this blog post walks you through the process). Investopedia suggests bitcoinpaperwallet.com as a place to get holiday-themed paper wallets.
A hardware wallet, which is sturdy, waterproof, and password protected, is another option since paper itself could be lost, stolen, or easily damaged. Wallets from Trezor and Ledger are popular choices, according to the College Investor’s round-up.
Giving crypto as a gift: some tax considerations
Gifting cryptocurrency won’t trigger income taxes when it’s a gift. Taxes, however, will apply when the recipient transfers or sells it. Unless you’re insanely rich, you may not have to worry about a gift tax either, as only gifts over $15,000 require you to file a gift tax return (which means you must file IRS Form 709 to report the gift).
How about an NFT as one of the gifts for crypto lovers
MyEtherWallet, or MEW, cofounder Kosala Hemachandra said an NFT “adds that extra value. It just adds a little bit of emotion because you know something about that person.”
According to Hemachandra, who created the NFT project ETHBlocks, you can find the perfect piece of digital art for the nature lover, the robot-obsessed, or the art lover in your life.
A lot of people have been interested in non-fungible tokens, which are pieces of digital art minted on the blockchain. It is predicted that the market will reach a record $17.7 billion by the end of 2021, boosted by items like Beeple’s $69 million sale of “Everdays” and the hype surrounding metaverses.
So how does one give a NFT?
You should expect to spend between $200 and $500 on your gift. Hemachandra said even though the NFT itself may be a meager $10, the red-hot transaction fees on Ethereum come at a steep cost.
You can browse some collections on NFT’s most popular marketplaces. Items can be filtered by price on OpenSea, one of the most popular sites for NFT sales.
Once you have selected a piece, setting up a crypto wallet, such as MEW or MetaMask, is the easiest way to buy an NFT. Coinbase and Kraken are two popular crypto exchanges that offer wallet services. You’ll have to purchase ethereum on an exchange and then transfer it to your wallet (ethereum is trading around $4,020 as of Friday afternoon, but you can purchase any amount you want).
Alternatively, if the recipient does not have a wallet for you to transfer the NFT to or is not well-versed in crypto, you can set up the wallet for them and transfer the NFT, and provide them with the details after the gift has been given. In addition to a phone number or email address, the recipient can also claim the NFT. Hemachandra, however, said that this sort of goes against the principle of “decentralization.”
Take a simple approach to explaining what the gift is when the crypto newbie opens it, Hemachandra said. You can say, “This is yours; you own it, and if you ever decide to sell it for more, you can do so.”
It is more likely, however, that a crypto enthusiast will give a digital piece of art to another crypto enthusiast.