How to Swap Crypto Without Using a Cryptocurrency Exchange
In the beginning, the only way to obtain cryptocurrency was by mining it. Then, a few months into Bitcoin’s existence, the first primitive exchanges came along, creating a two-way marketplace for buying and selling BTC and the dozens – and then thousands – of cryptocurrencies that came after it. Today, there are hundreds of cryptocurrency exchanges, which serve a variety of regions and functions, from standard centralized exchanges to more sophisticated derivatives platforms, as well as institutional-grade high-frequency trading options.
For all the convenience that crypto exchanges have brought to the industry, they’re not always ideal. For traders seeking to profit from the movement of the markets, sure, exchanges are the perfect solution. But for cryptocurrency users who wish to purchase digital assets with fiat, or to swap between cryptos, exchanges are less than ideal. Cumbersome and complex, they’re the equivalent of using a sledgehammer to crack a walnut. Swapping between cryptocurrencies demands a simpler and more elegant approach.
The Pros and Cons of Using a Crypto Exchange
Custodial cryptocurrency exchanges have a lot going for them: they’re fast, stocked with a vast array of digital assets, have high liquidity and low slippage. Trade on one of the leading exchanges and you’ll encounter a responsive trading engine married to a clean interface and mobile-friendly layout. But what if you don’t want to trade? What if you simply want to buy and hold a coin? Or quickly swap one crypto for another? In such scenarios, exchanges are an inefficient option.
The drawbacks of using a centralized exchange don’t end there, either. Other pitfalls include lengthy waiting for verification upon sign up, which can take anything from hours to days. Then there are fears over what the exchange – or its KYC partners – might do with that data. As recent breaches have shown, even reputable exchanges are not immune from theft of coins or customer data. For those times when you’re intent on buying or swapping cryptocurrency in a hurry, the following options will save you from having to go anywhere near an exchange.
Option 1: ChangeNOW
As a noncustodial crypto swap service, ChangeNOW has a few things going for it. Aside from being relieved of entrusting a third party to store your coins, there’s the time saved in not having to wait six confirmations for your deposit to clear, as is the case with centralized exchanges. Moreover, with 170 coins to choose from, ChangeNOW offers a greater selection than most centralized exchanges.
ChangeNOW isn’t the only crypto changer that will allow you to swap between cryptocurrencies in seconds rather than minutes, but it’s one of the slickest and most reputable. The ability to purchase crypto with credit or debit card, coupled with its fair exchange rates and privacy preservation all count in its favour.
Option 2: Crypto Debit Card
Crypto debit cards are essentially custodial crypto wallets that allow you to convert to fiat at the push of a button, which is then loaded onto a Visa or MasterCard that can be spent in a conventional manner. Technically speaking, you’re not spending cryptocurrency every time you use your card in-store, online or at an ATM, but the end result is essentially the same. Depending on where you are in the world, you should be able to utilize a popular crypto card provider such as Wirex or Crypto.com.
You will be required to pass KYC to be approved for a card, which means the sign-up process mirrors that of joining a conventional crypto exchange. Once approved, however, you can swap from crypto-fiat, fiat-crypto and crypto-crypto in an instant and at reasonable market prices. The selection of coins is limited compared to a swap service such as ChangeNow (Wirex lists around a dozen cryptos for example) but for obtaining popular currencies such as BTC and ETH, a crypto card does the job nicely.
Option 3: P2P
Exchanging cryptocurrency peer-to-peer harks back to the earliest days of Bitcoin, but it’s a method that’s gotten more sophisticated in the years since. Localbitcoins.com, the original P2P marketplace, remains a viable and popular option for swapping from fiat-BTC and vice-versa, as does its BCH counterpart, Local.bitcoin.com. While coins can be exchanged quickly and discreetly using these platforms, they are limited by only supporting a single cryptocurrency. Hodl Hodl is only marginally better, offering BTC and LTC swaps.
Thankfully, there’s more to P2P exchange than simply using multisig escrow services. When it comes to exchanging ERC20 tokens for ETH, DAI and other Ethereum-based assets, there’s a wealth of services that will allow you to swap tokens in a noncustodial fashion. Uniswap is the most liquid and user-friendly, with Kyber a close second.
Traditional cryptocurrency exchanges remain a mainstay of the industry, but they’re no longer the gatekeepers to acquiring and liquidating crypto assets. As the cryptosphere has matured, it’s brought with it with a range of new ways to swap coins swiftly and seamlessly with the minimum of fuss.
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.