Why is crypto a good gift idea?
If someone is already into digital tokens, it makes complete sense they would love a cryptocurrency gift. Here are many of the plenty reasons why most people would appreciate a Bitcoin gift:
- Could be an excellent long-term investment: Although there's no knowing where the prices of each cryptocurrency will go due to their ongoing volatility, the total crypto market cap has significantly grown since Bitcoin launched in 2009. Large-cap cryptos like Bitcoin (BTC) or Ethereum (ETH) could serve as suitable (albeit speculative) long-term investments.
- Can be used to make other purchases: Even if crypto investors don't want to hold their Bitcoin till the next BTC halving, more companies like Overstock, Gucci, and AMC have begun accepting crypto. Elon Musk's Tesla and Mark Cuban's Dallas Mavericks even accept Dogecoin as a payment method for select merchandise. Plus, if someone's favorite business doesn't accept crypto, swapping it for USD, EUR, or another fiat currency is easy on centralized crypto exchanges (CEXs).
- Shows appreciation of your friend's interests: If you know someone is deeply immersed in the crypto culture, giving a crypto-related gift shows you take an interest in their passion.
- Encourages people to learn more about blockchain: Giving a crypto gift is a risk-free way for your friends or family to start experimenting with this new technology. For some people, a crypto gift is the only way they'll ever dip their toes into this volatile market.
- An unusual and unique gift idea: Although crypto gifts are becoming more common, they’re still a new phenomenon. It's likely your crypto gift will stand out from the pack.
- Gifting crypto can have zero tax implications: As long as you don't exceed the local taxation authority’s annual exclusion limit for gifts, you don't have to pay taxes on crypto. Plus, whoever receives your crypto won't pay taxes unless they decide to sell. Currently, the IRS requires U.S. citizens to report gifts of more than $15,000.
- Could be used for many hobbies: Many crypto holders use their digital currency on dApps (decentralized apps) for fun. From blockchain-based games to NFT (non-fungible token) collectibles, there are many crypto-related platforms and communities that Web3 adopters are participating in.
How to choose a crypto gift
Choosing the perfect crypto gift will depend on who you're buying it for. As with shopping for any other item, you typically consider the likes and dislikes of your friend or family member. First off, be sure whoever you're buying crypto for has an interest in this field. It also helps figure out what aspects of crypto they most enjoy.
Is your friend interested in crypto as a long-term investment, or are they involved in a popular play-to-earn game? Are there any NFT collections that your friend admires? Be sure to determine what area of cryptocurrency to focus on to find the most meaningful gift.
Also, be mindful of hacks, pump-and-dump schemes, and rugpulls in the crypto industry. For your safety, it's best to buy crypto from a reputable CEX and stick with projects with a high track record in the crypto community.
How to give crypto as a gift
Now that we know why you might consider crypto for gift-giving, here are the most common methods you can do so:
Deposit crypto to a wallet
The simplest way to give crypto as a gift is to send it to your gift receiver’s digital wallet. To use this method, you need to know the public address in your friend's wallet for the crypto you want to send. For example, if you're going to send Solana tokens (SOL) to your friend's Trust Wallet app, you'll need the public SOL address in their wallet.
Remember that there's no single wallet address that accepts every cryptocurrency. Since each crypto runs on a separate blockchain, they all have different associated addresses. For example, you can't send BTC to an Ethereum address. Even if a crypto wallet stores both BTC and ETH, you need the correct crypto address for whatever digital asset you're sending.
Create a new wallet
If you know your friend is new to crypto, you can help them set up a wallet before gifting them your tokens. There are dozens of software wallets (aka hot wallets) that are free to download on iOS and Android devices. Plus, many of these hot wallets are user-friendly. A few examples of free software crypto wallets include:
- Trust Wallet
- Coinbase Wallet
- Crypto.com DeFi Wallet
- Atomic Wallet
Take your time reviewing the history, reviews, and user interfaces of multiple crypto wallets. Also, double-check the crypto you want to send to your friend is available on the wallet you're researching.
Another highly important part of this gift is letting them know the significance of a crypto wallet's private keys. Also known as the "seed phrase," this list of words is the only "backup" you can use to recover crypto funds on a new device. Plus, anyone with access to a wallet's seed phrase can easily steal your friend’s crypto. It's imperative to keep this seed phrase a secret and well hidden in a private safe.
Look up crypto gift cards
You probably won't find crypto gift cards in your local grocery store, but there are a few companies that now offer these products. A few significant exchanges like Binance now sell gift cards that customers can use to fund their exchange accounts. Users with a Coinbase account can choose a special "crypto gifting" service where they can send a crypto gift card via email.
To avoid scams, the best practice is to stick with high-profile crypto exchanges and companies with a long track record when buying gift cards.
Crypto gift safety tips
Cryptocurrency is associated with many scams, hacks, and phishing attacks. You should definitely prioritize safety when choosing which crypto to give as a gift (there might be chances your friend or family member may not be as well-versed as you are about these Ponzi schemes). Here are a few tips to avoid a crypto-related security issue:
- Stick with large-cap cryptos: The smaller a crypto project is, the less likely it's a suitable gift idea. Small-cap altcoins (or non-Bitcoin cryptos) are far more likely to lose their value or turn out to be a scam. It's always best to stick with established large-cap cryptos like Bitcoin, Litecoin, or Ethereum.
- Only recommend high-profile wallets and exchanges: If the gift receiver is new to the world of crypto, stick with wallets and CEXs that have a large user base and a long history in the crypto industry. It's also best to choose crypto apps with a simple user interface to help take the complexity out of crypto.
- Be sure the receiver knows the basics of crypto: New crypto "hodlers" (crypto slang for crypto aficionados) should go through a crash course on the basics of transferring and storing cryptocurrency. Make sure the receiver knows the significance of a wallet's private keys and how to safely transfer tokens whenever they want to exchange them.
- Double-check wallet compatibility: Always double-check that the wallet address you're sending your crypto to is on the appropriate blockchain. For instance, only send Bitcoin to a Bitcoin address. If you send Bitcoin to a Bitcoin Cash address, it’ll be gone forever. Be sure your friend knows they could lose their crypto if they don't ensure they're on the correct blockchain.
Other crypto gift ideas
Not sold on sending a Bitcoin gift? Here are a few alternatives worth considering:
- NFT gifts: NFTs are unique tokens often used as digital collectibles. While the most popular NFT collections are animated profile pictures like the Doodles and the Bored Ape Yacht Club, you can find NFTs representing many digital media. From live albums and in-game avatars to event tickets and sports memorabilia, there are plenty of NFTs to choose from on markets like OpenSea.
- Utility tokens: Many metaverse platforms, DeFi dApps, and play-to-earn games use "utility tokens" within their ecosystems. Unlike other cryptocurrencies, utility tokens serve a function within a dApp. If the gift receiver likes to use a particular Web3 application, consider sending them the associated utility token.
- Bitcoin ETFs: Many countries like the U.S., Canada, and Australia now offer ETFs that track the prices of crypto-related companies or Bitcoin. If your friend is more familiar with stock investing, buying them shares in a Bitcoin ETF may be simpler than sending BTC to a wallet.
- Hardware wallets: Hardware wallets are considered the safest way to store crypto. Since these devices keep their private keys offline, they’re almost impossible to hack. Major hardware wallet manufacturers include Ledger and Trezor.
At Worldcoin, we aim to give the gift of crypto to individuals all over the globe. Using our Orb technology, we hope to verify countless wallets and deposit crypto like DAI into each person's unique address. Our goal is to improve accessibility to cryptocurrency without sacrificing user privacy. For more information on our mission, subscribe to our YouTube channel.