Web3 is here to stay, and whether you’re using crypto as a store of value or plan to interact heavily with the web3 ecosystem, you’ll need a way to off-ramp your crypto earnings to be able to pay your bills. There are lots of reasons why Spritz users are going bankless—whether they’re held back by the centralized banking system or just have a lot of enthusiasm for DeFi, Web3 and the future of crypto, Spritz is a tool that enables them to experience financial freedom unlike ever before.

Centralized banks offer low yields on investments, especially in traditional savings accounts where you’ll earn little to no interest for storing your money long-term. And if you deposit your pay checks to a checking account just to pay the bills, you already know that you’re earning next to nothing from your fiat holdings.

There are also fees associated with using the centralized banking system, and banks have the ability to dictate how and when you can use or withdraw money. In today’s period of record inflation rates, crypto has become a hedge against inflation as more people go bankless.

Going bankless refers to moving into decentralized finance (we call it DeFi around here) and out of centralized financial systems such as a major bank or credit union. In these early stages of Web3, going bankless is a way to have total control over your crypto while interacting with the decentralized economy.

Apps like Spritz let you pay your bills with crypto directly from your wallet, letting you stay in DeFi without having to rely on traditional financial institutions to be able to pay bills.

There are lots of advantages to going bankless. For one, you have total control over your finances and have more freedom overall. But there are challenges and responsibilities that come with that, especially as you plan to pay your monthly bills and expenses from your crypto wallet.

While the centralized banking system might offer security and insurance, going bankless requires you to handle all of that on your own. Here is everything you need to know to go bankless, including the hard to swallow pills you may not want to deal with—like taxes.

Choosing a wallet

The first thing you need to do to go bankless is choose a wallet. Digital wallets, or non-custodian wallets, let you store your crypto and other assets like NFTs, POAPs, or your decentralized identity (DID) easily in one place. There are lots of wallets to choose from, but we recommend choosing a wallet based on what you’ll be using it for.

If you’re going to be interacting with a lot of smart contracts, pick a wallet like MetaMask or Coinbase Wallet that can easily integrate with different layer-1 and 2 blockchains. If what you do is primarily on one network, such as Solana or Ethereum, you can pick a wallet that works well with those networks. For Solana that might be Phantom, while Coinbase Wallet and MetaMask are popular with Ethereum and Polygon users. BNB Chain (formerly Binance Smart Chain) users on the other hand might want to use something like TrustWallet.

Consider long-term storage

By no means are you limited to only one wallet. You can open as many wallets as you’d like, just remember to store the keys in a safe place. Your keys are the only way to access your wallet if you ever lose your password or get disconnected, so treat your keys like you would your passport and store them in a safe place.

If you’re storing large sums of crypto or valuable digital assets, we recommend storing them in a separate wallet than the one you use to interact with dApps and smart contracts. You wouldn’t use your lifetime savings account to take out cash from an ATM at a bar, so think along the same lines when you’re interacting with Web3.

A lot of people like using cold wallets to store large amounts of crypto. Cold wallets take your crypto offline by storing it in a piece of hardware that looks like a thumb drive, so the only risk is that you lose or damage the wallet itself. Products like Ledger offer easy to use cold wallet storage that can easily connect to apps like Spritz so that you can still pay your bills with crypto while keeping your assets safely offline in cold wallet storage.

Understand safety

Like we said before, use common sense when interacting with Web3 to keep your crypto safe. But even then, there are a lot of scams, hacks, and mistakes that you can make if you’re not well-versed in the crypto world. Take some time to understand Web3 safety—you can start by reading our blog post on Web3 safety tips —and be careful when interacting with smart contracts until you feel confident in your understanding of the ecosystem.

Here’s a good rule of thumb for the crypto world: if it sounds too good to be true, it very likely is.

Learn about different on-chain earning methods

Did you know there are more ways to earn in Web3 than just by investing in crypto? From yield farming and liquidity mining to play-to-earn and  metaverse games, NFT trading, DAO-memberships, and more, there are tons of ways to earn money in the crypto world.

We’re only getting started here, too, and we even hear about tons of amazing new move-to-earn projects that will give you crypto just for using their platform. Imagine being paid to use social media, or being paid in crypto each time you exercise. The Web3 world is ripe with earning opportunities—all you have to do is take the time to learn about them!

Unlock real-world utility with your crypto

Once you’ve started earning in the crypto world you’re going to want to off-ramp your crypto to use it in real-life. The problem right now is that most banks and businesses don’t accept crypto as a form of payment. So what do you do? You have two options; You can off-ramp into a TradFi banking system, or you can use Spritz to pay your bills with crypto and stay bankless entirely.

To off-ramp your crypto you’ll have to transfer it from your wallet and into a centralized exchange. This can be risky, expensive, and time consuming. Make sure you get your wallet addresses right, or you could end up sending your crypto to a stranger by accident.

You’ll also have to pay transaction fees, or gas fees, which are network fees that you have to pay each time you use a blockchain network. Some networks, like Polygon, are fast and affordable and let you make transactions in seconds for less than a penny (or 1.3 MATIC if you’re counting). Others are more expensive, and can charge you some serious coin just to send your crypto from your wallet to an exchange.

Once your crypto is on an exchange you can cash it out for fiat currency—or the government-backed currency of your choice. Spritz is open to US users right now, so in this case we’ll be talking about the US Dollar. On top of the gas fees you’ve already paid to transfer your crypto, you’ll have to pay a fee to the centralized exchange to swap your crypto for cash. Once you pay that fee, the exchange will send cash to your bank account in a couple of business days.

Sounds like a lot, huh?

You could also just use Spritz to pay your bills with crypto. Anything from your student loans or mortgage payments to your credit card and utility bills can be paid on Spritz, which lets you pay bills with crypto directly from your wallet.

We use the Polygon network, so if you’re not on Polygon you’ll have to bridge your assets to the network (which you can learn about here).

Crypto taxes

Here’s the hard-to-swallow pill: going bankless doesn’t mean you don’t have to pay taxes. You can complain about paying taxes all you want, but that doesn’t mean the responsibility doesn’t go away. We can’t give you official tax advice, just like we can’t tell you what to do with your crypto, but we can say that paying crypto taxes is less scary than you might think.

How much you’ll pay in crypto taxes really depends on what and how much you off-ramp, and how long you owned an asset before you sold it. Take some time to learn about crypto taxes from services that can actually give advice, and don’t believe everything you read on the internet.

Going bankless has a lot of advantages. It gives you more freedom and control over your financial future, and lets you take advantage of earning opportunities via blockchains that are unheard of in the traditional finance world.

Spritz is the bridge between DeFi and TradFi that truly lets you stay bankless by streamlining your crypto bill payments.

Remove the off-ramps and take the jump into being bankless by signing up for the Spritz beta here.

Cheers!