As you know, when purchasing a good or service for cash, you are swapping cash for your desired item or service. Such as the name implies, a “Swap” most often means to ‘exchange one item or service of value, for another (or many) item or service of value (of equivalent value)’. Similarly, in cryptocurrency, a “Swap” refers to exchanging one cryptocurrency you hold for the equivalent value of another cryptocurrency.
To complete a Swap, most likely you will use a (normally centralized) service. This is similar to a trade, with the primary difference being that zero fiat currency is involved. Instead, the trade is of cryptocurrencies. During a Swap, you pay with an alternative cryptocurrency different (other) than the crypto you will purchase.
When you purchase a cryptocurrency through a trade (whether on an Exchange or through a Broker), you can pay for your cryptocurrency purchase with a “local” government-issued currency for a particular cryptocurrency (Example: USD, EUR, JPY, etc.).
Example and Description: When you have 1 Bitcoin (BTC), and would like Dash (DASH), one option you can exercise is to visit a Dash FastPass partner (like Liquid).
The steps that follow will illustrate how-to swap your Bitcoin for Dash, without having to take multiple steps of selling your Bitcoin for fiat. Then, you would purchase Dash with the fiat received for your Bitcoin. Every transaction carries fees, so Swapping helps reduce your cost to switch over to another currency.
Step-by-Step: How to Conduct a Swap Transaction
To conduct a Swap transaction, we will utilize the Liquid Swap service to guide us and make it simple.
Step 1 is to Sign-up at Liquid. If you already have an account, continue to Step 2.
- Click on [this link] and sign up to Liquid. You will be asked questions for auditing and compliance purposes. As regulations are rolled out globally, questions like these are common.
Step 2: If you have already signed up, and have successfully completed the Know Your Customer (“KYC”) process, click on this link for Liquid’s Buy and Swap dashboard.
Step 3: Please be signed-in to your Liquid account (look to view the page as shown in the image below). Then, click on the Swap tab on the Buy and Swap dashboard.
Step 4: If you have cryptocurrency outside Liquid, please click on this link to make a Deposit. Locate the first dropdown list, shown next to the “Exchange” field. Select the cryptocurrency you currently have (that you are looking to Swap). In the second dropdown list (next to the “Receive” field), select the cryptocurrency you want to receive.
Example: For this step-by-step, we use Litecoin (LTC) as the cryptocurrency we would like to Swap for Dash.
Step 5: In the “Exchange” text field, first enter the amount of LTC (Litecoin) you would like to Swap for Dash. The “Receive” field, and the “Rate” amount in between the two fields, will auto-update (depending on the number you enter in the “Exchange” field).
Example: We will choose to exchange 5 LTC, and the Platform will provide us 3.090 Dash for the LTC.
Statistically, the number of people in the world growing the BlockChain community and cryptocurrencies markets is small but growing very rapidly. So, if you have made it this far, consider yourself a Pioneer. Our entire Dash Team is committed to providing you with the best support in the world, as you adopt the more equitable financial system of cryptocurrencies.
If you have any stress or questions around these steps to Spot Trade and Swap, we invite you to get them answered today, 24/7 by visiting our remarkable Learning Resources portal: https://www.dash.org/learning-resources/.
Thank you for reading! See you on the trading floor!