One of the main reasons, if not the main reason, that Bitcoin was developed in the first place was to have a currency that was anonymous and unregulated by the world’s governments. A place where people could keep their transactions private, safeguard their money, and keep one part of their lives away from prying government eyes.
And for the most part, this has been working out. Investors and individuals have been able to make money, make nearly anonymous transactions, and have a little privacy with their finances.
However, rather than focus on the purpose of cryptocurrency and its success, the media and those who are anti-crypto only ever focus on the price fluctuations.
Of course, it’s important to keep up with the moving value and market predictions, but this is not the only important or interesting part of Bitcoin.
One of the best and most important aspects of Bitcoin and other cryptocurrencies is using it to pay for goods and services that you need or want. Especially as more countries start to adopt it as a legal tender.
Fortunately, using crypto to make purchases is easier than you’d initially think. And we’re here to make it even simpler for you.
The Future of Simple Cryptocurrency Transactions Is Here
Previously, paying with cryptocurrency was a rather complicated affair. Before, you would have to send the currency by diving into the command line on your computer and programming a transaction.
Now, like most things involving transactions, there’s an app for it. Using an app to make payments and send crypto is as simple as a bank transfer. Something people could only have hoped for several years ago.
The way you set up the payment is specific to the application you’re using, but most of them involve the same steps. So, generally speaking, this is how it works.
Step One - Obtain Your Cryptocurrency
You can obtain cryptocurrency through various means. Some of these include mining, completing online tasks, and outright buying it with fiat currency.
A regulated cryptocurrency exchange such as Coinbase, Kraken, Gemini, or Binance is a great option for securely buying crypto in exchange for your fiat currency. These platforms also enable you to store your private key(s) and offer technical help.
You’ll receive a decimal portion of the crypto if you cannot afford a whole one. For example, if Bitcoin costs $25,000 for one and you only have $12,500 to spend, you will receive 0.5 BTC.
Step Two - Setting Up a Wallet
To make payments, send crypto and receive crypto, you’ll need a wallet. There are several options for wallets: cold, hot, and paper.
You can read about the differences in detail in the link above. However, in short, paper wallets are offline, tangible, and ideal for large sums or super long-term storage.
Cold wallets are also offline, tangible, and can be safer than hot wallets. Hot wallets are solely online, more convenient than the other options but carry more security risks.
Although, even these are minimal if you are sensible.
You can choose the best wallet option for you based on your needs and which cryptos you want to store. There are recommendations you can find here. But companies like Coinbase also have wallets available as well as other reputable exchanges: the choice is entirely yours.
While the name, wallet, implies this is where you’ll store your crypto, this isn’t the case. Your wallet will store your keys (aka seed). These are the codes you’ll need to access your Bitcoin or other cryptos.
Your wallet has a public key that is used in transactions and can be compared to an email address that is used to send and receive payments. The private key is like the password to the same email account.
Step Three - Sending and Receiving a Payment
Now you’ve set up your wallet, you can send and receive payments. As we mentioned previously, all wallets are different, so the Coinbase wallet is used for this example.
To make a payment:
- Open your wallet app
- Click on Send Payment or similar button
- Enter the amount you want to send
- Enter the QR code or wallet address of the recipient
- Click Send or a similar button
To receive a payment:
- Open your wallet app
- Tap Receive Payment or similar button
- Tap Share Address or similar button
- Accept the payment when it appears in your wallet
Where Can You Use Cryptocurrency to Pay?
Relatively speaking, all cryptocurrencies are still in their infancy, even Bitcoin. This means that the list of businesses accepting this currency as payment is small in comparison.
As well as the lack of trust in the stability of Bitcoin and other cryptos, businesses have to set up different payment gateways and ensure security steps which many aren’t willing to invest in yet.
However, some well-known businesses accepting various cryptos right now include:
- AMC Theaters
You can also read an in-depth article here, explaining all the businesses that specifically accept BTC as a payment method. There are plenty to choose from since companies are more likely to accept BTC than other cryptos.
Brick and mortar retailers don’t generally accept cryptocurrencies. Although there is hope this will change in the future. If a store does, you’ll see a sign posted in their window just like how they advertise which cards or other payment methods they accept.
Pros and Cons of Paying With Cryptocurrency
Since cryptocurrency is decentralized and user information is not required, it is a near anonymous way of making transactions. Although, note that we say near anonymous rather than completely anonymous.
Your wallet address can be used to identify you which means it is technically pseudonymous, you can read more on this here.
However, for the most part, your transactions and other financial movements are hidden from prying eyes and authority scrutiny.
Cryptocurrency is designed to be peer-to-peer, reducing the need for third-party involvement which is far better for both parties involved.
3. Fewer Fees
You’ll often find that you need to pay service fees or other similar charges to the business you’re buying from. Sometimes, the business is being charged by their third party and they pass this cost on to the consumer.
However, cryptocurrency's peer-to-peer nature allows for fewer fees than you would experience paying by card.
4. Pay From Anywhere in the World
If you have an internet connection then you can make a transaction. That’s the only requirement meaning you can be anywhere in the world.
5. Accessible to Everyone
Since you only need an internet connection to get started with crypto, a wallet, and transactions, you aren’t hindered by the requirements of banks such as a home address or a regular income. You can get started with no checks or boxes to tick.
1. Transaction Fees
Although fewer fees are involved in cryptocurrency transactions, you'll need to pay transaction fees to the cryptocurrency network. These costs have gone up (and back down again) in the last couple of years. But generally speaking, these costs are minor.
2 Price Volatility
There are some reasons for Bitcoin’s price volatility, and the same for other cryptos.
- Supply and Demand
- Influences from the News
- Actions of Investors
- Limited Age
Price fluctuations, even extreme ones, are all part of the risk you take on when investing in cryptocurrencies.
3. Not Regulated
One of the primary reasons for Bitcoin’s inception and additional cryptos was to have a currency that wasn’t regulated by a government authority. It has worked and this is good news.
However, there are downsides to not having regulation. You cannot get help if you’re scammed, for example. There’s no refund if the business closes before you receive whatever you paid for.
And there’s no way to access your account without your private keys. Having no regulation puts a lot more responsibility on you.
4. Not Reversible
Once the transaction goes through, there is no way to reverse it. If you make a mistake with your transaction such as sending it to the wrong wallet address, there’s nothing you can do about it. If the recipient doesn’t want to send it back, you can’t force them and no one else can either.
5. Risk of Loss
Like all investments, cryptocurrencies carry risk. You’re not guaranteed to make money and when the time comes to spend it, it may not be worth as much as you would like.
Paying for Goods with Cryptocurrencies FAQs
Do I Need a Wallet to Pay with Crypto?
Yes! You can have cryptocurrencies without a wallet but you cannot perform any kind of transactions without a wallet. It’s like walking into a shop to buy a drink and leaving your wallet at home. You cannot make any purchases without one.
Are All Wallets the Same?
No, there are different types of wallets: cold, hot, and paper. Added to this, not every wallet is compatible with every type of cryptocurrency.
Where Is Cryptocurrency Accepted as Payment?
Several online retailers currently accept crypto as a payment method. Some of the most well-known options include:
- AMC Theaters
There is also a larger list of retailers that specifically accept Bitcoin, you can find out more about this by clicking here.
Start Your Crypto Journey with Mining Syndicate
If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.
As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #2 and #3 are currently launching and #4 and #5 are in the works.
Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining. If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us here.
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