How to Use Bitcoin: The Best Ways to Buy and Spend Your Bitcoin
A major roadblock for on-boarding new crypto users is that they don’t think there’s any real-world application for their Bitcoin. Even for seasoned crypto investors, it’s hard to find trusted and reputable places to use, trade, and spend their bitcoin. The ultimate goal of the industry is to make crypto a part of people’s everyday lives. By providing consumers and professionals a way to transact which is cheaper and more global than ever before, bitcoin is creating a new landscape which takes power away from financial institutions and puts it back in the hands of the individual. There are already a number of market-leading companies making it easy to buy, spend, earn, and use cryptocurrency as a part of your everyday life.
How to Buy Bitcoin
Places to purchase cryptocurrency have already been evolving for several years. At first, bitcoins could only be purchased via underground markets, done person-to-person, out of sight from the general public. These days there are a variety of different trustworthy places to buy bitcoin, making it much easier to get yourself on-boarded to the newest revolution in digital currency.
1. Use Cryptocurrency Exchanges
Exchanges are platforms where you can use your hard-earned cash to buy bitcoin. They are generally operated by a centralized entity which helps facilitate trades between buyers and sellers through an order book. Additionally, funds (fiat or cryptocurrency) are stored on the exchange itself, providing quick and easy access to your assets. The success of an exchange is largely driven by high-trading volumes. This provides an exchange with the liquidity to place orders (buys or sells) and have it filled quickly. Many of these services, such as Coinbase and Gemini, require personal information because of anti-money laundering (AML) and know-your-customer (KYC) regulations in the United States and abroad. You can read more about how BlockFi uses KYC/AML in our resource center.
An alternative to these centralized exchanges are decentralized marketplaces. Here, trades are conducted directly between two parties, without any centralized entity controlling or facilitating the trade. Funds are not stored on the exchange, providing you with the ability to keep control of your funds at all times without having to trust a third party to custody them. LocalBitcoins is a well-known example of a decentralized marketplace where buyers and sellers come together to conduct trades directly with one another. On LocalBitcoins there are a much wider variety of options for making your bitcoin purchase, such as paying via PayPal, Moneygram, or Venmo. Other platforms like Kyber Swap offer an easy and trustless way to buy and sell cryptocurrency. Just like a centralized exchange, Kyber has an open order book, but requires the use of an Ethereum Dapp wallet, like Metamask, to store and transfer your funds.
If you don’t want to bother with the complexities of an order book, bid/ask spreads, and the like, there are alternative exchanges that allow for a quick and easy bitcoin purchases. Exchanges like Shapeshift allow you to quickly swap bitcoin at the drop of a hat. Unfortunately, you will need to already own another cryptocurrency in order to purchase bitcoin using services like Shapeshift, as they don’t accept fiat currency as a payment method. They are best used for quick “swapping” one cryptocurrency for another.
2. Turn Unused Gift Cards into Bitcoin
If you have unused gift cards lying around the house, don’t let them go to waste. Instead, use them to purchase bitcoin. Sites like Paxful let you purchase bitcoins using your unused gift cards “by connecting with others who are looking to purchase those same gift cards. You may, however, have to sell-off your gift cards at a discount in order to find a willing partner to transact with. If you are willing to do so, this is a great way to turn unused gift cards into bitcoin.
3. How to Use Bitcoin ATMs
Everyone knows how to use an ATM, so it would only make sense that you should be able to purchase bitcoin at an ATM as well. No, you still can’t purchase bitcoins at a regular ATM, but you can do so at a special bitcoin ATM which accepts cash bills in exchange for bitcoin. Just deposit cash in the machine and out comes a slip of paper with your new wallet information and bitcoin balance. You can then take this paper to another ATM and withdraw cash at a later date, or spend your bitcoins anywhere they are accepted.
Unfortunately, Bitcoin ATMs are not yet universal, and are located sparingly across the globe. To find a Bitcoin ATM near you, check out Bitcoin ATM Radar, a global repository with the locations of all current Bitcoin ATMs. Who knows, maybe one day there will be a bitcoin ATM on every corner ready for you to use.
An ATM alternative is to use Coinstar to trade in your spare change for Bitcoin. Yes, those machines where you can take your piggy bank full of quarters can now spit out bitcoins instead of cash or gift cards. In fact, Coinstar isn’t just for coins, it works for bills too. You can even deposit up to $2,500 to buy bitcoin on the spot. This makes Coinstar an another great resource for buying bitcoins fast.
Now that you have learned about some of the ways you can buy bitcoin, let’s look at where you can use bitcoin in your everyday life.
How to Use Bitcoin
We get a lot of questions from new cryptocurrency owners, things like, “how can I spend bitcoin?” or “where do people like to spend bitcoin?”. You might be surprised at the amount of places you can use bitcoins. Not only can you now spend bitcoin to purchase your favorite video games, you can also use it to pay for that new rug you have been wanting on Overstock, or even put money toward a prepaid SIM card.
1. Make Online Purchases Using Bitcoin
A growing number of online retailers are accepting bitcoin as a valid form of payment. Overstock has been a vocal leader in enabling you to use bitcoins for any purchase on the site. Other companies supporting bitcoin as a payment method include Microsoft, Newegg, TigerDirect, and many others. At the moment, ecommerce sites which accept bitcoin are relatively rare, but the fact that these huge companies are willing to take the plunge is a great sign for the future of the industry, so make sure to use every opportunity you have to shop on a site which allows you to use bitcoin if you can.
There are also new ecommerce platforms which are designed to only accept bitcoin and other cryptocurrency as forms of payment. The biggest marketplace at the moment, OpenBazaar, is a peer-to-peer marketplace where you can buy anything from local food and beverages from around the world, to art and even digital goods. The platform takes precautions to keep transactions safe and secure, using an escrow service for payment and user reviews for buyers to be made aware of unethical sellers.
While you’re at it, you can use bitcoin to top-up your prepaid SIM card with CryptoRefills. Just enter your phone number, the amount you want to top-up, and pay with bitcoin. You can even send money to family or friends abroad to top-up their SIM card. This is especially useful in places where the financial infrastructure is limited. If you are a gamer, CryptoRefills also allows you to use bitcoin to purchase game vouchers for some of your favorite games, like World of Warcraft, Counter-Strike, and more.
2. Buy Gift Cards Using Bitcoin
Imagine being in a Best Buy and seeing that new pair of headphones you have been looking for. The only problem is, you are out of cash and only have access to your bitcoin. But Best Buy doesn’t accept bitcoin as a mode of payment. What do you do? With services like the Gyft mobile app, you can quickly turn your bitcoin into a gift card and make that purchase you were hoping for.
The retail stores in which you can use bitcoin is almost unlimited thanks to services that allow you to exchange your bitcoin for gift cards. Sites like eGifter allow you to buy gift cards from hundreds of sites with your own bitcoins, effectively letting you spend bitcoin as cash at your favorite stores.
Didn’t spend the whole gift card? Transfer it back into bitcoin with Paxful.
3. Get a Debit Card that Uses Bitcoin
With the popularity of bitcoin rising, new and innovative financial products have been introduced to make it easier than ever to spend your bitcoin anywhere. One such innovation is allowing bitcoin to be stored on a debit card and spent anywhere debit cards are accepted. Where can I spend my bitcoins? With these services you can spend your bitcoin anywhere!
BitPay offers a debit card on which you can load your bitcoin. The company partnered with Visa to allow users to spend bitcoin instantly anywhere Visa is accepted. You can even manage your account and card balance with the BitPay mobile app. Wirex provides a similar Visa debit card product, and even provides 0.5% cash-back in bitcoin on all in-store purchases.
Cash App is another Visa debit card option, but is also so much more. The app allows you to send bitcoin to friends (like Venmo), gives you cash discounts at your favorite merchants (like Ebates and Lolli), and even allows you to buy and sell bitcoin on the app directly. It’s like an exchange, debit card, and bank account all rolled into one.
How to Earn Bitcoin
Outside of buying bitcoins outright, there are a number of alternative ways to put even more bitcoin in your wallet without spending any money. Earning bitcoin often doesn’t require anything more than registration on an application, or depositing your existing holdings into a bitcoin interest-bearing account.
1. Earn Bitcoin with Compound Interest
It is often said the most wealthy people let their money work for them. By utilizing the power of compound interest this is exactly what you can do with your bitcoin. What does this mean? Instead of keeping your bitcoins in a wallet, you can put them in an interest-bearing account, which will earn you more bitcoin each month. Products like the BlockFi Interest Account (BIA) provide customers interest for simply depositing bitcoins into their account.
Just deposit your bitcoins into a BIA and let the interest role in. Clients can earn up to 6.2% APY every year on their bitcoin. The best part? Interest compounds monthly. At the beginning of each month, your interest earned in bitcoin will be deposited into your BIA account. You will immediately start to earn even more interest the next month, because your balance continues to grow as interest is added. Learn how depositing to a BIA account can allow you kick your feet up and watch the bitcoin roll in using compound interest with bitcoin.
Learn more about how BIA works here.
2. Earn Cash-Back in Bitcoin
One of the easiest ways to earn bitcoin is through a cash-back service like Lolli. Lolli users earn bitcoin as cash-back each time you make a purchase online with a partner retailer. Their partner network includes over 500 top brands, such as Walmart, Barnes -amp; Noble, Gap, Best Buy, Overstock, and more. Lolli is similar to other cash-back services like Ebates, except that instead of paying your cash-back in dollars, you are paid in bitcoin. So, next time you are ready to make your next online purchase, stop and remember that you can earn bitcoin with just a few clicks using the Lolli Google Chrome extension.
Another exciting way to earn Bitcoin as cash-back is with Pei. With Pei, you can unlock cash-back in BTC or USD. Their app is very simple. The first step is to connect your bank account, debit cards, and credit cards to your account securely via Plaid. Then, every time you shop at a store in the Pei merchant community, you will receive cashback directly into your Pei account. Their partners include companies like Target, Chipotle, 7-Eleven, and a number of other major retailers. The best part is that you not only earn Bitcoin through Pei, but you still get to “double dip” on the points and rewards you would normally get from your credit cards. Pei is one of the best ways to passively earn Bitcoin without having to think about it.
3. Get Paid in Bitcoin
Some companies prefer to pay rewards out in bitcoin because of how cheap and fast it is to transact using the blockchain. These days, there are a variety of small tasks and jobs you can complete to earn bitcoin. These include:
- Taking surveys
- Completing administrative work
- Replying to emails
- Reviewing mobile apps
- Doing freelance work
Earn is a platform which is used by some of the best and brightest in the cryptocurrency industry, like Naval Ravikant and the Winklevoss twins. After creating a professional profile you will start to earn bitcoin each time you respond to a message from a recruiter, business, or researcher.
You can also head over to Cryptogrind or the Jobs4Crypto Reddit for more skilled, and often permanent jobs that pay in bitcoin. Just be careful, any job which pays in bitcoin requires trust between parties. If you are serious about working to earn bitcoin you should think about using an escrow service to ensure payment.