Understanding the ShapeShift Cryptocurrency Exchange
One can use Shapeshift to change one type of cryptocurrency to another, making it a good choice for one who wants to obtain altcoins. In other words, Shapeshift is a crypto-to-crypto exchange (where you can exchange cryptocurrency-to-cryptocurrency only).
With a platform like Coinbase you can buy coins, with a platform like GDAX or Kraken you can buy/sell/trade altcoins (coins that aren’t Bitcoin), with ShapeShift you simply transform (or shift) one cryptocurrency into another at a set exchange rate without needing to buy or sell anything!
All these choices generally accomplish the same thing, the trading of one coin for another, but ShapeShift is special in that it lets you obtain altcoins without having to buy/sell (or even set up an account).
This a really big deal if you can’t use another coin-to-coin exchange (for example, if you live in Washington State or NYC or a country that bans certain exchanges or creates strict regulations for exchanges).
So let’s say that again, if you live in Washington State or New York and want to know “what cryptocurrency-to-cryptocurrency exchange should I use,” one option is Shapeshift.
NOTE: You can also use the similar service Changelly.
Step-by-Step: How to exchange digital assets with ShapeShift.io.
TIP: If you transfer from a wallet that charges a fee, for example Coinbase, the total amount you’re sending should be the amount of the ShapeShift transaction, plus the fee Coinbase is adding. You can see what that fee is under the “network fee” line of the Coinbase send screen. To avoid having to do the math, try using a wallet that doesn’t charge fees when transferring via Shapeshift (for example, if moving Bitcoin to Bitcoin cash, use the btc.com wallet which can handle Bitcoin and Bitcoin cash).
TIP: Shapeshift has no exchange or services fees (although there are “miner fees” like with any cryptocurrency transaction outside of specific exchanges) and transfers aren’t subject to slippage (a difference between the expected price of a trade and the price at which the trade is actually executed). With that said, you have to use their exchange rates (which are similar to the ones found on coincap.io) So make sure to pay attention to the price you are getting.
TIP: You need at least one type of cryptocurrency and wallets for at least the type of coins you want to exchange. For example, if I want to trade Bitcoin for Dash, then I need a Bitcoin wallet with Bitcoins in it, and I need a Dash wallet.
WARNING: Some wallets need coins in them to be active. For example this is the case with Ripple. That means you’ll need to figure out how to get some Ripple in your wallet before you can convert Bitcoin (or another coin) into Ripple.
How to Use Shapeshift
ShapeShift is a popular choice for quick transfers from one coin to another, according to their site: “it is how digital asset exchange should work. The platform gives you the power to quickly swap between assets – no account required.”
We agree, here is how to use it (in Shapeshift’s own words).
Let’s assume you have Bitcoin and you want Ether. It goes like this:
- Select Bitcoin as the input and Ether as the output
- Provide your Ether address from your Ether wallet in the top box (destination address) and your Bitcoin address (refund address). Click on “I agree to Terms”, then click the Start Transaction Button.
- ShapeShift will generate a bitcoin deposit address for you (this is the address you will send your bitcoin from your bitcoin wallet to). Please send your bitcoin to this generated address, being sure to not send an amount over the “Deposit Max” or under the “Deposit Min”
That’s it. In a few moments, your Ether will be quickly sent to you.
TIP: As noted above, but to stress this: With ShapeShift, what you see is what you get. The exchange rate shown is exactly what you’ll receive, minus only the “miner fee.” There is no exchange fee, or service fee. Pretty sweet right? Learn more at Shapeshift about (and make sure to check out their very useful APIs).