If you have heard a lot of bitcoin buzz in the last year but thought it was too complicated to understand, let alone use, you are not alone. Count me in that crowd.
But the promise of bitcoin was so great and my curiosity so peaked, I decided to give it a try. What I discovered was that it was a very familiar, but a slightly different, way of doing things. Overall, it was easy peasy.
In some ways, using a bitcoin is very similar to what we are used to. Just like using a dollar bill, you will need a wallet, you will buy some bitcoin to put in your wallet and then you can spend your bitcoin. In the last two articles, I covered how to get a wallet and how to get bitcoin. And this week, I will cover how to spend bitcoin.
After getting a wallet and getting bitcoin to put into it, you can use it for transactions. Virtually any transaction you can make with a traditional currency, you can make with bitcoin: buying goods and services, purchasing gift cards and giving to charity.
Buying Goods and Services
Each day, there are a growing number of businesses all over the world that accept bitcoin as payment for goods and services. You can buy anything from goods like food and clothing to cars and luxury properties and services from lawn services to advertising to healthcare. Bitpay lists more than 30,000 businesses that accept bitcoin. Coinbase lists another 34,000 more. Another good source is using coinmap.org, which is an easy way to find bitcoin-friendly businesses near you.
If you carry your bitcoin wallet with you, say in your smart phone, paying in person is just a matter of showing your quick response (QR) code to the business’ QR code. Not only is your transaction much more secure than using a credit card is, it is better for the business because they will not have to pay a credit card transaction fee. And signing your name, reading off the last 4 digits of your credit card or counting your change is now a thing of the past.
The process for buying online is just as simple. At the checkout, choose bitcoin as your payment and send your payment from your bitcoin wallet.
And buying internationally is a breeze. Not only is there no exchange rate, but also the price could be cheaper because of the lack of credit card fees, foreign exchange conversion fees and international money transfer fees.
Bitcoins can also be used to buy gift cards, which, in turn, can be used at the selected retailer. For example, at gyft.com you can use bitcoin to buy a gift card to more than 200 retailers that currently do not accept bitcoin. The process is easy: choose your desired gift card, select bitcoin as your preferred payment and send your payment from your bitcoin wallet.
Giving to charities is another popular use of bitcoins. Bitpay and Coinbase also list many charitable organizations. The process is similar to buying goods or services. But imagine the big benefit of donations not getting eaten up by all those transaction fees — more donor funds used for good works and not paying financial intermediaries.
Bitcoin is also paving the way for new innovations for fundraising. Imagine giving at a charity event. After a rousing speech and a willingness to give, I’m reluctant to give a sizeable amount of cash because I want a tax-deductible receipt. I’m also reluctant to use a credit card because of potential credit card fraud, long lines to process the transactions and the organization’s vulnerability to hacking. With bitcoin, staff walks around the room wearing t-shirts with the charity’s QR code and I’m able to make a secure gift with instant documentation with my mobile bitcoin wallet.
If you are curious about using bitcoin, come on in . . . the water is fine. Whether buying goods and services, gift cards or giving to charities, the process is easy.
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