Welcome back everyone! As you may have noticed from my previous posts, one of my big concerns with the growth of Cryptocurrency is ease of entering the market. Having dealt with trying to purchase and use coins in a variety of (often quite difficult) ways, I know how frustrating it can be to get started. It is often even worse for Americans where government restrictions on currency exchange are even more difficult. I wrote this guide which illustrates what I believe to be the easiest and best method to get started. Yes, it’s easy through Coinbase but it’s often not very quick or cheap after fees. Those are what I absolutely can’t stand, fees and total USD to Crypto transaction time. For a decentralized technology that is inherently quick and cheap, Coinbase certainly tries hard to ruin both when getting in. That’s where Cash App comes in!
Square, Inc., a financial services and mobile payment company based in the United States has recently released a new peer to peer payment service known as the Cash App to compete with Venmo and other payment services. More importantly, the CEO Jack Dorsey seems to be very keen on the future of Cryptocurrency. Because of this, they have added the feature of purchasing Bitcoin through the app! So I went ahead and tried it for you all to see how it compares with the experience Coinbase provides!
Well, this will be quick. Buying Bitcoin through the Cash App is instant if you link your bank account. I set up a Cash App account, linked my Debit Card, purchased a small amount of Bitcoin, and had it my Cash App ‘wallet’ in a matter of minutes. By wallet, I of course mean the wallet inside the app and not a real Bitcoin wallet. You do NOT own the Private Key to the wallet where your Bitcoin is held. Other than that, they have a very intuitive interface and provide seamless instant purchasing. Could not find any issues with the App itself or process of purchasing the Bitcoin. One small downside is that currently only allow for the purchasing of Bitcoin and no other Cryptocurrencies. If you want to obtain any other Coin or Token, you will have to Transfer it out to another exchange.
This is where things seem to get a little more difficult unfortunately. In order to withdraw the Bitcoin from the Cash App, you need to confirm your identity using an ID card or Driver’s license. Yes, I know no one likes to do this, but it is the easiest and most secure way as it stands. These companies need a way to prove you are who you say you are. This is the same process that Coinbase requires and that is because these companies are not in the business of allowing or promoting fraud.
It took me just under 24 hours after submitting my ID to get verified before I could withdraw. All in all, I thought that was pretty reasonable. And also, this is a one-time deal. Once verified, you can withdraw Bitcoin free of charge (on Cash App’s end) in the amount of time it takes to confirm on the network. Awesome!
On my second attempt, when I was already verified, it took me a total of 6 minutes from purchase on Cash App to seeing the pending transaction in my wallet. Woah! If any of you have used Coinbase or GDAX, you know FULL well that it takes much longer than this. Coinbase makes it very difficult for you to actually remove your Bitcoin to your own wallet. I have had Coinbase leave my withdrawals pending for weeks before even initiating a Bitcoin network transaction.
Conclusion and Coinbase Comparison
In the end, I really enjoyed my experience using Cash App. No, I am not being paid to post this (But would be very appreciative if anyone used my referral link to get started). They built a very smooth, fluid, and easy app that allows for near instant purchasing and withdrawing of Bitcoin. Yes, the verification waiting is not ideal, but unfortunately that’s the nature of the beast when buying Cryptocurrency in the United States these days. Hopefully, someday soon, there is a true decentralized exchange so there is no need to deal with a third party.
How does it compare to Coinbase? Well, I think it’s a great option. Exchange that dollar for any Crypto is not easy. Using CashApp you can do it quickly and then you have BTC, a Crypto you can use to obtain any other Crypto easily. It also appeared to be both quicker and cheaper. The total time going from USD to Bitcoin was a matter of minutes compared to my recent 1 week waiting time when using the Coinbase subsidiary GDAX. Both of those times are assuming you were verified already. Also, the fees seem to be less on the Cash App at ~1% versus 1.49% for US users. I might be biased a bit against Coinbase, but I welcome this competition and hope that it will drive both Exchange methods to better themselves.