Ripple Transaction Scale Graphic (Source: https://ripple.com/xrp/)

Short Summary

This post details how I sold my Ripples (XRP).

Long Introduction

Contents

1 Signup Bonuses
2 Virtual Currencies
3 Ripples
4 GateHub
5 Coinbase
6 Shapeshift
7 Like Reward/Loyalty/(Transferable Points) Currencies?
8 Did I get the best price?
9 Chase

Signup Bonuses

I love signup bonuses.

And often reference the credit card and bank signup bonus pages.

I figure that’s where you get your largest return on investment in the signup bonus game. [The most bounce to the ounce, More bling for less cha-ching?, …]

But when it comes to free money, I seldom discriminate. I’ll take a look at just about anything that doesn’t involve a shipping box.

Virtual Currencies

Fitting nicely within that no box category are virtual currencies.

I am not an expert on virtual currencies (digital money, cryptocurrencies, …), can’t even pretend to define some of the terms: blockchains, hash algorithms, consensus ledgers, … . But I figure that doesn’t really matter, I’ll focus on the promotions and leave the rest to the smarter people of the world. I mean did you really have to understand how the Federal Reserve System worked to participate in the US Mint deal?

Anyway, Vinh (MpD) posted on a Coinbase deal in the past¹. Essentially it worked out to about $50 free in bitcoin (though some readers encountered problems). Later he followed up with a post on how good a deal it was (at this point the price of Bitcoin had more than doubled – making it a $100 signup promo). And I have to say thanks Vinh, because as the price of Bitcoin has continued to rise that original $50 signup promo is now worth over $500 (as of 2017-06-14 for 0.232 BTC).

Did I predict the Bitcoin price explosion? Absolutely not, 100% dumb luck. But it’s a nice example of potential value to be had outside of our traditional bread and butter of bank account and credit card signup bonuses.

Ripples

But anyway, this post isn’t about Bitcoin, it’s about Ripples!

I can’t recall how I came across the bonus, but back in May 2013 – Open Coin/Ripple did a giveaway of some of the digital currency that they had created – Ripples (XRP).

Awesome – 1,000 ripples – I was rich to the tune of about $5 USD²($0.005/XRP).

I then forgot about my Ripples, checking in about yearly (to update the points spreadsheet) and at that interval never really saw much price movement at all – in fact as late as March of 2017 my Ripples were still worth about the same amount as when I received them back in 2013.

But recently a powerful (and completely mysterious to me) force has boosted the price of Ripples to $0.254/XRP [as of 2017-06-15].

Along the way, I also received another 500 Ripples for identity verification.

So just through time and chance, I was sitting on a Ripple investment worth close to $400.

Selling my Ripples

Well, I’m not much of a student of the markets, but I figure the 30-50x growth rate over the last few months might not be sustainable long term. The future may be Ripples … but then again … the future may not be Ripples, so I figured it might be prudent to take some money off the table.

The main problem was that I had no clue how to sell ripples for (still my currency of choice) USD.

GateHub

Also along the way (January 2016) Ripple pivoted their business model (to focus on Bank-to-Bank transactions) and transferred my ripples to a company called GateHub.

GateHub appears to be one of the bigger exchanges for trading between XRP and USD and seems reputable (though reputations are based on short track records in the cryptocurrency space). So I could complete my trade on the GateHub exchange. But there were a few downsides:

GateHub is UK based so they would add a $15 international wire transfer fee to get my USD back to my US Bank Account.
And more importantly to me, I had never verified my identity with Gatehub. So the prospect of uploading my passport information seemed a little scary (given that attacks on virtual currency exchanges are not an unusual occurrence [that’s where the (digital) money is])

Coinbase

Because of Vinh’s deal, I was already verified with Coinbase, a US based virtual currency exchange, so I figured that would be a convenient option. No additional identity risk, and Coinbase would allow me to ACH out my USD funds for free.

In my scenario though one problem remained, Coinbase doesn’t trade XRP – (as of 2017-06-15 Coinbase only offers trades in bitcoin, ethereum, and litecoin).

Shapeshift

So I needed an intermediary service to convert my Ripples into something that Coinbase would trade for USD.

To make the conversion I used a service called Shapeshift. Shapeshift allows the trading of digital currencies without an account (no identification required). The platform only allows trades in cryptocurrencies, so no conversions to fiat/government issued currencies are possible.

I decided to convert my Ripples (XRP) first to Bitcoin (BTC), and then my BTC to US Dollars (USD).

I sent ripples to Shapeshift from my GateHub Account, and then Shapeshift sent bitcoins to my Coinbase account. Once the bitcoins arrived at my Coinbase account, I sold them for US Dollars and transferred the funds to my US Bank account.

It might sound a little complicated, but the Shapeshift interface is actually pretty intuitive. I simply added my Coinbase bitcoin wallet’s public address as the destination address, and my GateHub ripple wallet’s public address as the refund/failure address and hit start transaction. Shapeshift provided a ripple address to send payment to, which I did through the GateHub interface, and that was it. My bitcoins arrived at my Coinbase account almost instantly.

Like Reward/Loyalty/(Transferable Points) Currencies?

I figure virtual/crypto currencies shares some similarities to the reward/loyalty currencies that we like to collect. Perhaps the same skill set is valuable in this space too – I mean the portfolios of reward currencies and redemption strategies I have seen posted often boggle my mind (here’s a Stefan RTC example on Copa Miles).

Did I get the best price?

Almost certainly not. I added extra fees buying and selling bitcoin as an intermediate step. I also didn’t shop around among digital currency exchanges for the best prices/spreads.

My main focus was to sell ripples quickly with the resources that I already had access to.

Community Feedback

We would love to hear your ideas in the comments.

Did you get in on this deal? or similar digital currency deals?
Are you still finding promos in this space?
Or what new spaces/technologies do you think might be ripe for marketing bonuses (with potentially large upsides)?
Are PotCoins the answer?
Did I sell my Ripples, or did I lose my Marbles?
What did I do wrong?

Or you can ping me at [email protected]

Warnings

(In addition to all the standard warnings) this is not financial or legal advice.

Virtual Currencies:

are extremely volatile and may lose significant value over short periods of time
may not have well established rules within the legal, regulatory, and tax systems
may have all sorts of other risks – including but not limited to technical and governance risks

This post is incomplete and contains errors, please let me know where I’ve made a mistake to help improve this community resource.

Final Notes

All the best!

The Current Coinbase Deal

The current Coinbase deal is weak:

The bonus is only $10 and trading fees will eat almost all of that
And more importantly the price of bitcoin is very volatile, you could lose a significant percentage on your bitcoin investment over very short time periods – much more than the value of the bonus.

So I would only recommend the current signup bonus – to those looking to get into the virtual currency space regardless of the promotion and those willing to accept the risks. If so, then a free $10 in bitcoins might be valuable. Here is the DoC Coinbase referral page if you would like to share your Coinbase referral link.

Sensitive Banks

Chase

2018-01-29 Update: Will notes Chase may be setting these transactions as cash advances now.

Adam reports that he was unable to use his Chase credit card to make a purchase on Coinbase. Some other DPs from the Internet: #1, #2

Probably not surprising for Chase which also has problems with prepaid cards, MO payments of credit cards, …
Probably best to not use a bank where you earn ongoing credit card and bank bonus (probably like Chase) or your primary checking account.

I think some are terming this behavior as de-risking.

I haven’t had any issues depositing/withdrawing with a PNC Checking Account.