How to pay correctly with bitcoins

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Blockchain technology is being introduced into different spheres of human life. It all started with the first working Bitcoin network, which was created in 2009 to make payments. The system was launched by a person or a team of developers under the pseudonym Satoshi Nakamoto. Bitcoin cryptocurrency (BTC) was supposed to become a means of payment for goods and services. Over time, this was realized. Now it is possible to pay with bitcoins for almost everything: travel, restaurants, online stores and much more. The user is only required to figure out how to do it correctly.

What you can spend bitcoins on

The legislative bodies of Russia recognized cryptocurrency as property, but not as a means of payment for goods and services. The Bank of Russia called the main reason for this high level of volatility. However, some citizens pay with bitcoins in foreign online stores and services. It is also possible to apply BTC in countries where the coin is authorized for use in shopping.

In December 2021, digital currency was used to pay for:

Purchases from online stores. These include Amazon (a major retailer), eBay and Overstock (international online shopping sites).
Plane tickets, hotel and car rentals: Bitcoin.Travel, AirBaltic, Expedia.
Food in restaurants and cafes: coffee chains Starbucks, fast food Burger King in Venezuela and KFC in Canada.
Services of online dating sites: Badoo.
Movie screenings at the movie theater. For example, at the American chain AMC.
Streaming services: Twitch.
Games: Xbox, PlayStation Network, Humble Bundle.
Education. BTC is accepted by universities in Cyprus and some educational institutions in the U.S. and Britain.
Computer hardware. For example, from Dell – a large company that produces PCs, laptops and accessories.

For bitcoins you can get services of NanoFitness gyms, Microsoft products and applications in the App Store. In Russia, BTC is accepted by Yulmart, a chain of electronics and home appliances stores. Individual entrepreneurs and small businesses often take cryptocurrency payments.

BTC is used to purchase illegal substances and illegal services, as well as money laundering. This is one of the reasons why states want to regulate the market. Important: using Bitcoin does not guarantee security – lawbreakers are found and prosecuted.

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The best crypto exchanges for exchange

Coins and tokens are stored in wallets, but sometimes some of them need to be converted to others. Cryptocurrency exchanges are used to solve this problem. These are platforms for exchanging digital money at the current rate. Often with the help of such services, users convert cryptocurrency into fiat money and vice versa. Also, exchanges offer traders and investors tools for financial analysis of the market.

How to pay correctly with bitcoins

To use BTC for purchases, you need to start a cryptocurrency wallet. There are several types of vaults that differ in parameters. The table below shows the classification of cryptocurrency wallets.

Type, examples	Brief description
Software – MetaMask, Bitcoin Core	Such wallets are installed on a computer and cell phone. The security level is about the same as hardware and browser-based cryptocurrency wallets. The access key is stored in the memory of the device.
Browser-based – Blockchain.com, MyEtherWallet	These cryptocurrency wallets are used by many people. However, such storage sites are less reliable. When using them, you should carefully choose sites to visit. You also need to work in browsers with a high level of security.
Hardware – Trezor, Ledger	The most reliable storages designed in the form of separate devices, similar to a flash drive. Without access to such gadgets, it is impossible to hack them. The devices are additionally protected by a PIN code. They are disconnected from the Internet most of the time.
Paper	A safe way to store cryptocurrencies. The access key to the wallet is printed on a sheet of paper. The main problems are the likelihood of theft and fading. The sheet with the key should be stored in a dark and safe place.

After creating and replenishing the cryptocurrency wallet, you can start paying for purchases with bitcoins. This procedure in Russia is the same as in other countries. The purchase of goods and services is made by means of a simple transfer or QR code. In the first case the order of actions is as follows:

The seller informs the address of the wallet for charging BTC.
The buyer sends cryptocurrency in the specified amount.
The seller sends the goods or provides a service.

The procedure of payment by QR code is different. You need to take the following steps:

Open a cryptocurrency wallet and find the “Scan QR code” button. It will be provided to the buyer at the site or in the institution / office of the seller.
Scan the QR code.
Send bitcoins by clicking the Send button.
Confirm the action.

Due to the lack of regulation of payment relations in the sphere of digital currencies, there is a risk of fraud. Before transferring bitcoins, it is necessary to check the seller by evaluating reviews and his reputation.

Advantages and disadvantages of BTC payment

Cryptocurrency is increasingly used when buying goods and services in different countries of the world, including Russia. This was possible because of such advantages of digital coins over fiat:

Security of transactions. Cryptography and consensus algorithms reliably protect transactions, leaving them transparent.
Digital assets cannot be counterfeited. Fiat money is not sufficiently protected against counterfeiting. According to the Bank of Russia, more than 48,000 counterfeit bills were detected in 2020. Their total face value amounted to 179.08 million rubles.
The issuance of bitcoins is limited. This cryptocurrency is not subject to inflation, it cannot be denominated or devalued.
When using BTC as a means of payment, the buyer remains anonymous. The identity is revealed in the case of converting digital coins into fiat money.

However, bitcoins also have disadvantages:

In Russia, the use of cryptocurrency as a means of payment is outside the legal field. If the seller cheats in the provision of services or does not send the goods, there will be nowhere to turn with such a problem.
High level of volatility. Bitcoin price sometimes jumps by 5-15% during the day. Because of this, it becomes risky to hold coins.
As of December 13, 2021, the average transaction value in the Bitcoin network is $2.33. This value reached $4.99 in the last month. It is not profitable to pay with bitcoins for services and goods at a low price.

The idea of Bitcoin is to exclude intermediaries (banks, payment systems) when making transfers. They charge a commission on each payment with a plastic card. According to Alexei Tregubov, business director of Delobank, the fee ranges from 1% to 2.5%.

Features of Bitcoin payments in different countries

Most of the states of the world are working on the regulation of cryptocurrencies. In the countries of Europe and the American continent, digital payments are the most developed. Bitcoin payments have also become the norm in some Asian countries like Japan, Thailand and South Korea.

Belarus has a law “On the Development of Digital Economy”, which allows citizens to use cryptocurrencies as payment. There are already car services, flower and furniture stores, and hotels accepting BTC in the country.

How to pay correctly with bitcoins — Regions of the world where bitcoins are accepted (data from Coinmap service, current as of December 2021)

The best crypto exchanges for exchange

Frequently asked questions

💰 How do I buy bitcoins for cash?

In major cities there are terminals for exchange with a small commission. You can find them through the Coin ATM Radar service.

❓ Can I pay for goods with altcoins?

Often stores and services accept Litecoin, Ethereum, Binance Coin, Dash and other digital coins along with Bitcoin.

✅ In which countries is bitcoin fully authorized?

In 2021, the president of El Salvador announced the legalization of Bitcoin. The digital currency in the country has the legal status of a state unit of payment on par with the US dollar.

💡 Russian court will help in case of fraud by the seller who received BTC?

According to the law “On Digital Financial Assets”, cryptocurrency is not a means of payment. You can use it, but in most cases the court will reject the claim.

❗ Why are large companies starting to accept bitcoins?

The main reason is to advertise their own brand. The media covers such news every time.

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Author: Saifedean Ammous, an expert in cryptocurrency economics.