Table of contents:
- 1 Pay with Bitcoin: Use the crypto currency Bitcoin as a means of payment!
- 1.1 What is Bitcoin – a brief explanation
- 1.2 WHO CREATED BITCOIN AND HOW MANY BITCOINS ARE THERE?
- 1.3 WHAT CONCEPT IS BITCOIN BASED ON?
- 1.4 THE MOST IMPORTANT FEATURES OF BITCOIN
- 1.5 Hot wallet and cold wallet
- 1.6 Requirements for paying with Bitcoin
- 1.7 BUY BITCOIN ON ONLINE EXCHANGES AND CRYPTO-MARKETPLACES
- 1.8 SET UP BITCOIN ACCOUNT (WALLET)
- 1.9 Pay with Bitcoin: On site and online
- 1.10 PAY ONLINE WITH BITCOIN
- 1.11 Paying with a Bitcoin credit card – how does that work?
- 1.12 TYPES OF BITCOIN CREDIT CARDS
- 1.13 Bitcoin Prepaid Credit Card or Bitcoin Wallet Credit Card
- 1.14 BITCOIN WALLET CREDIT CARDS AS AN ALTERNATIVE
- 1.15 BITCOIN CFD: USING BITCOIN AS A FINANCIAL INVESTMENT
- 1.16 Among the further advantages rank:
- 1.17 Conclusion: Pay with Bitcoin? That is already possible in many cases.
Pay with Bitcoin: Use the crypto currency Bitcoin as a means of payment!
Paying with Bitcoin – is that possible? Anyone who wants to use Bitcoin not only as a financial investment but also as a currency already has various options for this. Both offline and online there are numerous service providers and goods manufacturers who accept payments with the digital currency – from cafés to large corporations. Another way to pay with Bitcoins are Bitcoin credit cards. These work similarly to prepaid credit cards and are versatile. But if you think of Bitcoin more as a financial investment, you can opt for CFD trading. In this case there is no exchange of “real” Bitcoins. The investor speculates about CFDs on the development of the Bitcoin price.
- Bitcoin is often already used as a means of payment
- Payments with Bitcoins are possible both on site and online
- Bitcoin credit cards are increasingly used in everyday payment transactions
- Bitcoin CFDs are considered an attractive investment
What is Bitcoin – a brief explanation
Bitcoin can be used to purchase services and goods or to conduct financial market transactions. The crypto currency fulfills the same functions as classic currencies (fiat currencies), for example the euro or US dollar. The most important feature of Bitcoin, however, is its decentralization, as the network is not subject to institutional control. This means that no state or central bank controls the money supply. Instead, the Bitcoin network controls itself.
WHO CREATED BITCOIN AND HOW MANY BITCOINS ARE THERE?
Bitcoin was created by a software developer under the pseudonym Satoshi Nakamoto. Whether this was a single person or a team is still unclear today. Nakamoto defined a maximum number of 21 million Bitcoins. These can be mined via Bitcoin mining by the so-called “miners”. Bitcoins can also be divided into small parts, the Satoshis – named after the developer of Bitcoin.
WHAT CONCEPT IS BITCOIN BASED ON?
Bitcoin is based purely on mathematics. People all over the world use software that follows a complicated algorithm to create new Bitcoins (the “mining”). It is an open source software. This means that each individual network participant can understand what happens within the Bitcoin network. The heart of Bitcoin is the block chain, a kind of digital cash book in which all transactions are recorded. Both the block chain and the crypto currency itself have met with great interest from institutions and companies as well as private investors for years.
THE MOST IMPORTANT FEATURES OF BITCOIN
The Bitcoin network is not controlled by a central institution. Every computer that transfers and calculates Bitcoins is part of the network. There is therefore no intermediate instance that can make monetary policy decisions for Bitcoin or that is even capable of taking coins away from Bitcoin users. If the system should fail, the Bitcoins are nevertheless retained. Theoretically, it is possible to store the entire network protocol on a hard disk.
Further features are:
- Easy handling: Often opening an account at a bank involves bureaucratic hurdles. A Bitcoin account – also known as a wallet – on the other hand, anyone can open one without any major problems.
- Bitcoin is pseudo-anonymous: Each user can own several Wallets. No personal information, residential addresses or names are assigned to Bitcoin accounts.
- Transactions are 100 percent transparent: every single payment made within the Bitcoin network is stored in the block chain. If someone has a Bitcoin address, all other network participants can see how many Bitcoins are on that Bitcoin account. However, it is not possible to see to whom the address belongs.
- Low transaction costs: An international bank transfer is usually expensive. With Bitcoin it is irrelevant whether the recipient is 2 or 1,000 kilometers away.
- It is possible to send coins worldwide via the Bitcoin network. Within a few minutes the network confirms such a transaction, which takes place without detours (peer-to-peer) from A to B.
Hot wallet and cold wallet
Hot wallets are constantly or often connected to the Internet. Cold-wallets are not or only rarely connected to the internet
Requirements for paying with Bitcoin
The most important requirement for paying with Bitcoin is of course that you own Bitcoins. Whoever wants to acquire “real” Bitcoins can buy them on crypto exchanges and crypto marketplaces, for example.
BUY BITCOIN ON ONLINE EXCHANGES AND CRYPTO-MARKETPLACES
On the latter, interested parties can buy a certain number of Bitcoins from other Bitcoin owners and then transfer them to their own wallet. The users themselves must look for suitable offers here. Besides there are different Bitcoin stock exchanges, on which investors can likewise adjust purchase and sales offers. Unlike the crypto-marketplaces, the buyers on the exchanges only have to specify the desired currency and number. The exchange then searches for suitable offers on behalf of the customer.
SET UP BITCOIN ACCOUNT (WALLET)
The purchased coins can be stored directly on the Bitcoin exchange. However, this is not recommended. For security reasons it is advisable to create your own Wallet. In addition to online wallets, various desktop wallets, hardware wallets or paper wallets are available for selection.
How to pay with Bitcoin? A Wallet is not only a secure depository for crypto currencies, it is also needed to pay with them. This is possible for example via Mobile Wallets. A common “virtual wallet” for tablets or cell phones is the Bitcoin Wallet App for Android devices. Users can download it free of charge from Google Play and install it on their mobile device. But beware: Due to the connection to the Internet, mobile Wallets are vulnerable to hacker attacks. That’s why Bitcoin owners should always store only a small amount of Bitcoins on this “Hot Wallet”. For long-term storage of larger quantities of Bitcoins, hardware wallets (cold wallet) are better suited.
Pay with Bitcoin: On site and online
Where can I pay with Bitcoin? Meanwhile, even in small towns, there are companies that accept Bitcoin as a means of payment. In international comparison, however, Germany still lags behind. In German-speaking countries, the points of acceptance are concentrated in particular in large cities, such as Berlin. Here there are so many of them in a Berlin district that it is called “Bitcoinkiez”.
For the payment process in the restaurant or store, the recipient’s software generates a QR code with the invoice. This code can then be scanned with the cell phone camera. The corresponding amount is then sent to the recipient’s Bitcoin address.
PAY ONLINE WITH BITCOIN
And where can I pay with Bitcoin when I shop online? Paying with Bitcoins when shopping online is very similar to paying on site. Some online checkouts display a QR code that the buyer can scan with his or her smartphone. Or the coin address of the online checkout can be seen. This can then either be copied into the customer’s own wallet or the wallet app opens automatically with a click.
In the meantime, there are a whole range of organizations and companies whose products can be paid for online with Bitcoin. These include Microsoft, Mozilla, Dell, Expedia, Lieferando and WordPress. But also numerous airlines already accept Bitcoin as a means of payment.
Paying with a Bitcoin credit card – how does that work?
In the meantime there are several service providers who offer Bitcoin credit cards. As with classic credit cards, the conditions and offers differ. Most Bitcoin credit cards work together with Visa or MasterCard. But there are also offers where the credit card itself becomes a wallet.
First of all, a Bitcoin credit card is nothing more than an ordinary credit card that supports the crypto currency Bitcoin. The digital currency is still very popular with investors. It may therefore make sense to charge your own credit card with Bitcoins as well. This would make it possible to pay with the card in everyday life wherever Bitcoin is accepted as a means of payment.
As a rule, users need an app to manage the Bitcoin credit card. These mobile applications can be imagined as a kind of online account through which all transactions are controlled. Credit cards are available in different variants, each of which has very specific advantages and disadvantages.
TYPES OF BITCOIN CREDIT CARDS
Two main types of credit cards have become established for Bitcoin. One is a Bitcoin prepaid credit card that can be topped up with Bitcoins at any time. The crypto currency is exchanged for a selectable real currency. In addition, there is the so-called Bitcoin Wallet credit card. This works like a digital wallet and stores the coins directly.
Bitcoin Prepaid Credit Card or Bitcoin Wallet Credit Card
The more popular variant is the Bitcoin credit card in prepaid format. Here the User uses his Bitcoins to top up the credit card. When recharging, the currency is converted into a fiat currency, such as US dollars or euros, at the current exchange rate. This means there are no Bitcoins on the credit card. They are used specifically to top up the card with money.
The advantage of this is that the user can use his card to pay wherever payment with a conventional credit card is possible. It is not necessary for the respective payee to have their own wallet. Depending on the type of credit card, different fees are charged for changing from digital currency to Fiat currency.
BITCOIN WALLET CREDIT CARDS AS AN ALTERNATIVE
The so-called Bitcoin Wallet credit cards work in a different way. The crypto currency is not converted here, but loaded directly onto the credit card as a token. Thus this type of credit card is a special form of Wallet that enables the Bitcoin owner to store coins there and finally pay by credit card with Bitcoin.
Even with these credit cards, users usually cannot avoid using an additional application. The app is used to manage the corresponding credit balance and also enables the transfer of the seed from the card to another platform. Up to now, these virtual credit cards have been used less frequently, so that it may become difficult to pay with them in everyday life. With increasing acceptance of Bitcoin as a means of payment, this could possibly change soon.
BITCOIN CFD: USING BITCOIN AS A FINANCIAL INVESTMENT
So if you want to pay with Bitcoin, you have several options. But not everyone Bitcoin-interested inspires itself for the acquisition of “genuine” Bitcoins. For many investors the purchase of Bitcoin CFDs moves instead into the foreground. What is this all about? A CFD is a Contract for Difference that allows investors to bet on rising and falling prices without actually owning the underlying asset. A contract is concluded between broker and trader. In principle, the trader pays the difference between the entry price and the exit price of the crypto currency he wants to trade.
Among the further advantages rank:
Long and Short: With Bitcoin CFD it is possible to trade in both directions. The crypto currency does not have to be in own possession.
Leverage: A retail client can open positions with a leverage that is twice the stake.
Risk management tools: To minimize risk, it is recommended to use stop loss and take profit orders and combine them with risk management strategies.
24/5 trading: It is possible to trade crypto currency pairs with the Euro, such as BTC/EUR, 24 hours a day, five days a week.
Large selection of crypto currencies: In addition to Bitcoin CFDs, many brokers also offer CFDs on many other digital currencies, such as Ripple, Ethereum or Litecoin.
Last but not least, most CFD brokers provide their customers with the world-renowned trading platform MetaTrader 4 for trading Bitcoin CFDs.
Conclusion: Pay with Bitcoin? That is already possible in many cases.
Pay with Bitcoin? Yes, that is possible. There are more and more points of acceptance worldwide. But the long debate over whether Bitcoin is suitable rather for the storage of value or also as means of payment is suitable, is still in full course. Regardless of how one looks at the problem – it is already possible today to pay for services and goods with Bitcoin, both locally in stores and restaurants and online in online stores or with airlines.
Where to pay with Bitcoin? It is true that broad acceptance is not yet perceptible in this country. Nevertheless, there are already a number of stores in Germany that accept Bitcoin. The “Bitcoinkiez” in Berlin offers a particularly large selection. This is a district in which interested parties can use Bitcoin as a means of payment in a particularly large number of stores. The payment itself is usually made via a mobile application, which users can download from an online store.
Tip: If you consider Bitcoin to be an investment rather than a means of payment, you have the alternative option of acquiring Bitcoin CFDs. With these Contracts for Difference investors speculate on the price development of Bitcoin, in both directions – without physically owning the crypto currency. The advantage: no wallet is needed and trading is conveniently done online via a broker who offers CFDs on Bitcoin.