Bitcoin adoption has come a long way since the first ever exchange for a tangible good in 2010, where Lazslo Hanyecz paid 10,000 bitcoin for two pizzas. But what can you do with bitcoin today?
Bitcoin’s uses can be categorised in three broad ways; holding as an investment, using bitcoin as a currency to pay for goods and services, or as a funding currency for trading.
Holding as an Investment
Bitcoin is often viewed as a new store of value since it shares many characteristics with gold and improves on certain aspects of money such as divisibility, security and portability.
As the rate of new coins decreases and we reach the 21 million limit, the theory is that bitcoin should appreciate over time as the rate of inflation falls. Often described as ‘digital gold’, bitcoin has frequently outperformed every other asset in terms of annual returns over its short history.
Storing bitcoin requires technical know how, specifically of cold storage. Cold storage ensures your bitcoins are stored offline and it can be done in a variety of ways, the easiest being a hardware wallet. Ensure you keep your seed (a string of 12-24 words) safe, preferably encrypted and split up in multiple locations.
Using Bitcoin to Pay for Goods and Services
As the first cryptocurrency, bitcoin established a strong network effect of users, who eventually wanted to spend their coins and demanded acceptance among businesses. At the same time, as the number of users grew, so did the number of businesses (large and small) that understood the innovation and adopted it as well.
You will find a high concentration of merchants that accept bitcoin in the major cities of the world, such as London, Tokyo and New York. There are also online marketplaces accepting bitcoin, such as OpenBazaar, Bitify, and CoinMall.
Independent businesses that accept cryptocurrency are dotted around the globe and can be located using the Airbitz Merchant Directory, Coinmap and useBitcoins. (For the UK, use Where to Spend Bitcoins).
Bitcoin can be used to buy various things including:
- Precious Metals & Real Estate
- Electronics & Web Services
Bitcoin can be your ticket to relaxation.
AirBaltic and Abitsky allow you to buy flights with your coins. To find somewhere to stay, you can use CryptoCribs (a cryptocurrency powered version of Airbnb) or Travala. Travel packages are also available from Berkeley Travel and More Stamps Global.
No big chain restaurant has fully adopted bitcoin yet, but many independent food stores accept bitcoin as a form of payment (a ‘bitcoin accepted here’ sticker is usually displayed on the front of their store).
You can also look at Twitter or Reddit to find smaller, independent stores that accept bitcoin as they will usually post an announcement.
Bitrefill and eGifter also offer a way to use your bits to buy food from big chain restaurants like Chipotle, Domino’s Pizza, and Dunkin Donuts. They both work using gift cards or vouchers that you can buy with bitcoin.
Burger King Germany recently announced their acceptance of the digital currency for online orders. There is even a Burger King in Arnhem, the Netherlands that accepts bitcoin. Arnhem is also known as the ‘Bitcoin Stad’ (or Bitcoin city) where there are hundreds of crypto-savvy merchants, including plenty of restaurants that accept bitcoin.
If you’re feeling generous then another way to part with your coins is to make a charitable donation.
You could donate to Bitcoin developers directly or to Bitcoin-based projects using their donations addresses. Wikileaks famously accepted bitcoins for donations in 2011 and other organisations and non-profits have followed suit, such as the Water Project, the Internet Archive, and Code to Inspire.
Precious Metals & Real Estate
Since bitcoin is considered a store of value like gold, cryptocurrency is increasingly being accepted for the purchase of precious metals and real estate.
There are multiple precious metals suppliers that accept bitcoin including London-based Sharps Pixley and Bitgild, which has been a popular way to purchase gold and silver since 2013.
In 2017, Go Homes became the first developer in the UK to sell a house for the cryptocurrency. Czech Republic based Home Hunters offers to broker property deals in Brno and Prague for buyers using bitcoin. Another way to buy real estate is to use Bitcoin Real Estate, which connects provides a listing platform for sellers and prices are displayed in BTC.
Electronics & Web Services
One of the best ways to spend your bits is to use Purse to buy whatever you want on Amazon with cryptocurrency.
Since bitcoin is the currency of the internet, it is no surprise that many web services accept the cryptocurrency as a payment method. For instance, various VPN providers (such as NordVPN and TorGuard) and web hosting services (such as Namecheap and QHoster).
Instead of selling your bitcoin or buying something with it, you can use bitcoin to margin trade or flip altcoins to gain more bitcoins or reinvest the profits into altcoins or more traditional assets such as gold, stocks or real estate.
With margin trading, you can use your bitcoin as collateral to enter larger positions with borrowed funds to try to make a profit from fluctuations in the market. Alternatively, you can flip altcoins, buying altcoins at a low price and then selling high once they increase (in terms of BTC).
With the same technology that underpins world class exchanges in traditional markets and a unique approach to gamification of trading, Interdax aims to be the premier venue for traders who want to earn BTC.