Bitcoin Basics Lesson 7: How to Spend Bitcoins
In Lesson 6, you learned that bitcoin can be sold and purchased just like other currencies through exchanges. You also learned that you can exchange bitcoin with people directly, just like with cash.
In Lesson 7 you will learn:
- Many merchants accept bitcoin as payment
- How to find places that accept bitcoin payments
- How to use bitcoin debit cards as payment in any store that accepts credit or debit
Where to Spend Bitcoin
Spending bitcoin is very similar to spending traditional money. However, since bitcoin is not yet universally accepted, you just need to select stores that accept it. Luckily, there are a bunch of them! Recent figures show that the number of retailers accepting bitcoin has now surpassed the 100,000 mark. As more countries continue to recognize bitcoin as a legitimate form of payment, these figures will continue to rise. The best way to find bitcoin-friendly merchants is by browsing online marketplaces and using specialized search engines that populate with large numbers of supporting establishments. For example, the site Coinmap offers a visual way to locate bitcoin-friendly stores, restaurants, and services around the world. The site also adds new locations regularly.
Bitcoin payments are easy to make online and offline. You just need to download a wallet application for your desktop, tablet or smartphone. Then, during checkout at a store, you will be presented with a code in text format or as a QR-code. This is a visual barcode representing the store’s public key. You scan their code with the scanner on your wallet application and confirm the total amount to be paid and then the transaction is complete. In the case of purchasing online where no scan option is available, you can simply copy and paste the public key address of the store into your wallet’s “Send to” field.
What Can You Buy with Bitcoin?
You can purchase just about anything with bitcoin ranging from goods to services. Bitcoin can also be used to purchase larger items including cars, real-estate, and even precious metals. Additionally, many merchants who accept bitcoin also give discounts for people who pay with the digital currency. One example is Purse.io who offers 15% off on Amazon purchases made using BTC. The most rewarding way to spend your bitcoin is by paying it forward. Use bitcoin to tip the author of an article or blog post with the click of a button, or donate to worthy causes including Wikileaks and the Foundation for Economic Education (fee.org).
Spending with credit card
If there is a merchant that does not accept bitcoin, there are still ways to use your digital cash to purchase the items you are interested in. Just use a bitcoin debit card. These cards help bridge the Bitcoin world with the world of legacy finance. Using them is simple, you can either buy bitcoin with your debit card or load a debit card with bitcoin to spend anywhere that accepts credit cards. With this bitcoin debit card, you can now essentially buy anything with bitcoin as any establishment that accepts credit or debit cards would accept your bitcoin debit card as well. The merchant gets paid in their own currency by the debit company and the charge will be deducted from your bitcoin balance.
There are several debit cards to choose from. Some cards can only be issued to certain countries, and all have varying fees, so be sure to read up on all the options to choose the best card for you. Two well-known choices in the U.S. are BitPay and Shift cards.
Best Practices for Using Bitcoin
To use bitcoin safely without worrying about being defrauded or losing your coins you simply need to heed some practical advice. Follow these basic guidelines and you can go bitcoin shopping online with confidence.
When seeking to use a shopping website for the first time, do a quick online search of the store’s name. There are several clear warning signs that you can look for in the search results to tell if a site is to be trusted or not.
- Never buy anything from a site that doesn’t have SSL (secure sockets layer) encryption installed. You’ll know if the site has SSL because the URL for the site will start with HTTPS:// (instead of just HTTP://). There will also be an icon of a locked padlock visible, typically in the status bar at the bottom of your web browser, or next to the URL in the address bar—it depends on your browser.
- No online shopping store needs your social security number or your birthday information.
- Never give out your bitcoin wallet login credentials or passphrase or private key(s).
- Always give out as little information as possible.
- Also, try to avoid using the same bitcoin addresses more than once. Generate a new address for each transaction you receive. Luckily, many wallets do this automatically.
Check out the other lessons: