How To Pay With Bitcoin

Jump to page contents

How To Pay With Bitcoin

Bitcoin is the world’s primary cryptocurrency, with over $18 billion traded daily. BTC, as it is commonly referred to on exchanges and trading platforms, has simplified the way people pay and buy, by using technology to bypass antiquated processes. Due to its speculative features, Bitcoin, along with numerous Altcoins, started being traded aggressively on online platforms. As a result, Bitcoin’s payment potential has not been given as much attention as it deserves.

How does Bitcoin Payment Work?

Before a Bitcoin payment can take place, the seller must inform potential customers that the cryptocurrency is accepted. This step might sound obvious but without it, no BTC payment is likely to happen. Next, the following steps need to take place:

  1. After adding products or services to the checkout counter, the buyer visits the checkout page
  2. On the checkout page, the seller puts the QR code (or full address) of his/her Bitcoin wallet
  3. The buyer inputs the seller’s address, either by scanning the QR code or pasting the entire address
  4. Depending on the seller’s system, the QR code might also contain the value in BTC, alternatively, the buyer would need to input this manually
  5. The funds are sent
  6. The buyer’s wallet signs the transaction using the buyer’s private key
  7. The transaction is propagated and validated by the network nodes
  8. Miners include the transaction in the next block to the mined
  9. The block is mined, based on the hashing power
  10. The miner or mining pool responsible for solving the Proof of Work algorithm adds the new block to the Bitcoin Blockchain
  11. The nodes verify the result and update the ledgers across the chain
  12. The seller receives the first confirmation of the transaction
  13. The seller receives additional confirmations with each newly created block

The time taken for a Bitcoin transaction varies considerably based on network volume and transaction fees. The more transactions in the queue, the longer some will take to be confirmed. Miners prioritise transactions based on the reward, so transactions which carry a higher reward are likely to be processed first. Generally, however, Bitcoin transactions can receive their first confirmation within a few hours, making them significantly faster than Swift or even SEPA payments.

Why Choose Bitcoin as your Method of Payment?

As an online merchant, you have probably asked yourself whether accepting Bitcoin as a method of payment is a good idea. The answer very much depends on your business activity and the needs of your clients. Here are a few considerations you should be aware of:

Significant Merchants

Several top brands and companies have jumped on the Blockchain bandwagon whilst even more have started accepting Bitcoin payments. In the list of the largest organisations which accept Bitcoin payments, you will find Microsoft, Expedia, and KFC Canada. Furthermore, non-profit site, Wikipedia also accepts donations in BTC.

Cater to Niche Markets

Although Bitcoin is not yet the mainstream currency for payments, it is still used by millions of people across the world. Some of these people don’t have access to traditional banking products, such as cards, so paying online with cryptocurrency is their only solution.

Lower Fees

Accepting card payments or PayPal can be expensive, with total transaction fees often surpassing 2%. Generally, Bitcoin payment fees are less than 1%, a significant saving if you accept numerous online payments.

Pros and Cons of Paying with Bitcoin

accepting bitcoin payments

Both buyers and seller stand to gain from paying with Bitcoin, but you must also be aware of certain drawbacks.

Pros

Bitcoin payments are not reversible, so there is no risk of chargebacks. This ensures that if a payment is processed there is no chance that it gets reversed, as is currently the case with most credit card payments. In fact, Bitcoin transactions have no intermediaries, offering users a certain degree of anonymity. This was the vision which Satoshi Nakamoto had to create Bitcoin.

When making Bitcoin payments you can determine the associated fees. Transactions with higher fees are normally verified first, but even transactions with lower associated fees are normally verified faster than traditional bank-to-bank payments. You could also set no fees for a transaction, but in such a case it could take days for it to be verified.

Cons

Due to Bitcoin’s speculative characteristics, it is extremely volatile, often changing its value by multiple percentage points in a single day. This means that the euro value of Bitcoin you pay with in the morning can be much higher or lower in the afternoon. As a result, either the buyer or the seller might regret the transaction, as had happened to Laszlo Hanyecz, who in 2010 paid $80 million for two pizzas.

Bitcoin payments can be slow sometimes, especially when compared to card payments. This has led to the creation of several alternatives, such as Bitcoin Cash and Litecoin.

Who Accepts Bitcoin Payment?

The number of online merchants which accept Bitcoin payments is on the increase. Before you can start to pay with Bitcoin you need to own some. To do this you should:

  1. Obtain a Bitcoin wallet address by buying a hardware wallet or using a digital one
  2. Open an account with one or more of the most reputable cryptocurrency exchanges available to you
  3. Buy Bitcoin using a payment method which is supported by the exchange

Once you have exchange your fiat currency or another cryptocurrency to Bitcoin, you can start paying with it. Amongst the many stores who accept Bitcoin payments you will find:

  • Bitcoin casinos – you can use Bitcoin to fund your online casino account, resulting in faster funding options and lower or no withdrawal fees
  • Video games – several online multiplayer and single-player video games allow you to use Bitcoin to make payments
  • Home & leisure – you can now furnish your home and buy your favourite electronics using Bitcoin and other cryptocurrencies
  • Flights & accommodation – find exclusive cheap flights and holidays and secure them buy paying in BTC
  • Online marketplaces – through third party platforms you can now use Bitcoin to pay for items purchased on Amazon and other online marketplaces

Concluding Thoughts

coinbase visa

There is no doubt that there is still a long way to go for Bitcoin payments to become mainstream. However, the necessary processes have begun, and an increasing number of websites support this innovative payment method. In addition, the availability of Bitcoin ATMs and debit cards, such as the Coinbase Visa, help make this digital currency more accessible and useful across the world. 

Recently Similar Guides

cex-promotion etoro-promotion

Latest Guides

Bitcoin,Intermediate,Scam,Trading

What Is Bitcoin Code?

Within a short period of time Bitcoin has come to represent a significant investment with the potential for lucrative returns. Like forex and stock trading, cryptocurrencies are commonly traded on exchanges across the world, and there are communities of day traders and serial investors who turn a profit by speculating on this new currency. As […]

4 December, 2019
Blockchain,Cryptocurrency,Gaming,Payment Solution

Online Gambling and How it’s Changed Over The Years

For centuries, gambling was confined to brick and mortar casinos. However, today you can gamble online, thanks to great technological advancements. Online gambling, enables customers to play traditional casino games at leisure – whether it’s in the comfort of their own home or even when commuting to work on a bus or train – thanks […]

2 December, 2019
Beginner,Bitcoin,Cryptocurrency,Trading

3 Things to Know When Trading Bitcoin

Understandably, a lot of people find bitcoin trading complicated and confusing. Even though it’s been around for a decade, it can still be difficult to grasp the concept of cryptocurrencies. In its most basic form, Bitcoin is a form of digital currency that people can buy. Trading bitcoins means buying them and selling to other […]

27 November, 2019
Bitcoin,Scam,Trading

What’s A Bitcoin Loophole?

Ever since the creation of Bitcoin and its subsequent growth, individuals have been looking for ways to profit with cryptocurrencies. Dubbed the modern gold rush, there are certainly many different ways to turn a profit by investing in Bitcoin. Bitcoin Loophole presents itself as a successful way to get rich off the world’s first cryptocurrency. […]

26 November, 2019
Beginner,Bitcoin,Blockchain,Crypto Mining,transactions

How Long Does A Bitcoin Transaction Take?

Bitcoin was launched as a payment mechanism which competes directly with bank transfers. Its main advantage was that no financial intermediaries would be needed, so payments can be settled faster and at much lower costs. In theory, Satoshi Nakamoto‘s looked like a revolutionary idea, but in practice, it was not as successful as many had […]

24 November, 2019
Beginner,Bitcoin,Payment Solution,transactions

How To Send Bitcoin

Bitcoin is the world’s largest cryptocurrency, created to facilitate peer to peer payments by eliminating intermediaries. When Satoshi Nakamoto was developing the cryptocurrency, it was unlikely that he would have imagined that the coin’s main allure would have been speculation, rather than this purpose. Nevertheless, Bitcoin transactions are in the rise, and you can send […]

21 November, 2019
Beginner,Bitcoin,Investment,Trading

Begin Your Journey In Bitcoin Trading

For a few years now, Bitcoin and other cryptocurrencies have become an attractive tradeable asset amongst investors. The sector’s rise in popularity was fuelled by a media frenzy surrounding Bitcoin’s surge in value, coming close to the $20,000 mark. Although the price has since fallen, Bitcoin trading remains extremely popular, with an average trading volume […]

20 November, 2019
Beginner,Bitcoin,Coinbase,Crypto Mining

How To Get Free Bitcoin

Bitcoin is the world’s primary and largest cryptocurrency, with a global market cap of over $147.7 billion. The popular digital token is available to purchase on a variety of exchanges, P2P trading sites, such as LocalBitcoins, and on trading platforms. Following the rise of Bitcoin’s price in late 2017, many people have looked for ways […]

19 November, 2019