Why I Used a Crypto Swap After 12 Years with Bitcoin

A story from one of our users.

Is it strange to never swap crypto for crypto?

I bought my first Bitcoins in 2012, and Bitcoin has never let me down since. It gives me everything I need: secure savings and simple transfers that I can send anywhere without anyone’s permission.

Many new cryptocurrencies have emerged in the cryptocurrency market since then, but none of them offer me anything that Bitcoin doesn’t already provide.

• Solana and Polygon are great for fast transactions, but I can also make fast transactions with my Bitcoin using networks like Lightning, Liquid, and Rootstock.
• Ripple and Stellar offer low fees, but Bitcoin fees on the Lightning Network are also very low.
• Ethereum and other PoS coins allow for staking to earn additional income, but the decline in their value against Bitcoin usually wipes out any staking rewards. For example, staking Ethereum brings about 3.6% annually, but over the past year, its value relative to Bitcoin has dropped more than 35%, from 0.059 BTC to 0.037 BTC.

So why would I trade altcoins for Bitcoin or swap my Bitcoin for other cryptocurrencies that I don’t need?

No, I only exchange my Bitcoin for fiat currencies. When I have spare fiat money, I use it to buy Bitcoin because Bitcoin is more reliable than any bank. And when I have expenses, I swap Bitcoin for fiat because very few places accept Bitcoin as payment. I don’t need any middlemen in the form of other crypto assets (like USDT).

Why I eventually needed a crypto swap

I’m a freelancer, and I prefer to get paid in Bitcoin. However, Bitcoin isn’t the most popular choice among the masses. Many people aren’t comfortable with Bitcoin price volatility and prefer more stable assets, like USDT.

Recently, when I was discussing payment terms with a client, he asked for my USDT TRC20 address.

Compared to Bitcoin, USDT TRC20 seems far less secure to me. There are frequent news reports about Tether freezing addresses, making tokens impossible to transfer.

This has been discussed in detail on Medium: What Happens When Tether Freezes Your Tether.

I don’t want to store my funds in an asset that can be frozen. Even for the $100 my client owed me, I’d prefer Bitcoin.

Of course, I could transfer the tokens to a cryptocurrency exchange and swap them there. But here are two issues:

1. I don’t know the AML risk level of the tokens the client will send me. What if it’s high and the exchange blocks my account? That would be a serious problem, as I regularly use that account to swap Bitcoin for fiat.
2. Exchanges only return suspicious assets to the addresses they came from, so I always fund my exchange account from my personal wallets. But if I wanted to transfer the 100 USDT TRC20 from my wallet to the exchange, I would have to pay a fee. And at high network loads, that fee could be around 5% of my total. Plus, I’d need TRX tokens to pay the fee, and I don’t have any.

My client then suggested that he use Rabbit Swap to exchange the 100 USDT TRC20 for any asset I preferred.

How I chose the exchange direction

Naturally, I wanted Bitcoin. But when I selected the USDT (TRC20) -> BTC swap option on swap.rabbit.io, I saw that the loss would be around 1.5%.

I wondered if there were more cost-effective options. I started looking and, honestly, got lost down the rabbit hole. Among the 3,600 cryptocurrencies available for exchange on Rabbit Swap, there’s truly a lot to choose from! In the end, I settled on Tether Liquid Chain.

I ended up with 99.23 USDT instead of 100, but for three reasons, it was better than keeping the USDT TRC20 without swapping:

1. When transferring to an exchange, I wouldn’t have to pay a fee of around 5%. On the Liquid blockchain, fees are 50 times lower.
2. Asset history isn’t tracked on the Liquid blockchain, so the exchange has no reason to claim that my tokens are too risky.
3. Unlike on the Tron blockchain, Tether cannot freeze tokens on the Liquid blockchain. I can be sure that I won’t need anyone’s permission to send them. (Almost like my beloved Bitcoin!)

This was the first time in my 12 years with cryptocurrencies that I used a crypto swap. Choosing the exchange direction was exciting, and the outcome was definitely worth it.