As bitcoin grows in popularity and value, there are still questions about how owners spend the world-famous digital currency while holiday shopping.Retailers have begun to jump on the bandwagon, with some accepting bitcoin as a means of payment. Proponents of digital currencies may hold a merchant in higher regard because they value bitcoin as a decentralized worldwide currency.Bitcoin transactions are often more convenient than fiat payments because they go directly from one wallet to another without incurring processing fees from banks. Travellers who are abroad for the holiday season can avoid carrying cash and steer clear of charges from traveller's cheques and currency exchanges.
Unfortunately, bitcoin payment processing is currently a challenge. The volatility in the value of Bitcoin, which is not regulated by any central bank, has seen intraday swings of as much as 20 percent. This is to say nothing of the immense energy it takes it run the bitcoin network.The volatility led some merchants, such as Steam, to drop bitcoin as a payment method. They cited transaction fee increases and volatility as the main reasons for the pullback. “Historically, the value of Bitcoin has been volatile.” said a statement on their website. “But the degree of volatility has become extreme in the last few months, losing as much as 25% in value over a period of days. This creates a problem for customers trying to purchase games with Bitcoin.” And of course, the value of bitcoin has more than tripled in a month since October 1st, 2017. Having said this, Steam is the exception rather than the rule, because the popularity of bitcoin continues to grow.
Although some people regard digital currencies as investment vehicles, others are going to want to spend their digital coins.To use bitcoins, users will usually set up a digital wallet. Users manage their wallets through an app, or use a hardware wallet such as a Trezor. In the case of the digital wallet, the transactions involve buyer and seller scanning each others' QR codes on smartphones to transfer the Bitcoins.Regardless storage method, however, Canadians spend them in a variety of ways.
One of the most convenient ways to spend bitcoin is to turn digital currency into merchant gift cards. Canadian examples include www.coincards.ca and www.yestobitcoins.com. Service charges, though, are usually over 5 percent. That being said, one benefit is that there is no need to deal with exchanges.
With bitcoins, a traveller can mitigate transaction and exchange fees ingrained in our current fiat currency system.International travellers can use Expedia.com, for instance, to book hotels using bitcoin. Vacationing with bitcoin also decreases the need to carry large amounts of cash.
Whether looking for a drink or a burrito, you can use bitcoin.Toronto-based Grossman’s Tavern, Vancouver-based Steamrollers, and Montreal-based Burrito Shop are just some of the restaurants across Canada that accept bitcoin.
Bryce & Brown Accounting from www.thetaxman.ca in Toronto, who call themselves a “Passionate team of tax and financial experts,” accepts bitcoin. Tax advice may be of value to early investors in bitcoin who have enjoyed considerable growth in their digital currency assets. The Tech Guys in Toronto will also accept bitcoin to support IT requirements.
Yoga enthusiasts in Vancouver can use their bitcoin to enjoy “yoga as an empowering and transformative practice” at Stretch Yoga studio. Kitchener-Waterloo’s KW Smarthome will “let you take control of your home theatre, lighting, A/V equipment…..using your smartphone or tablet.”
Small businesses aren’t missing out on this new payment method. Payment platforms offer bitcoin payment functionality to merchants, which aids adoption significantly. These merchants can harness the ability to accept bitcoin as well as credit, debit cards or Square. Canadian tech unicorn Shopify, with over 500,000 online stores, added a bitcoin payment option for its sellers in late 2013.
Some non-profit organizations accept bitcoin donations such as the Wikimedia Foundation, which leads the Wikipedia efforts to build free encyclopedias in many languages. Philanthropists can even donate to bitcoinfoundation.org and support a quest to help bitcoin become a “globally accepted method of exchanging and storing value which will operate without the need for third parties.”Donations in bitcoin can be made to this list of organizations as well. The number of merchants accepting bitcoin is growing, and an excellent resource, CoinMap.org, offers a visual map that is updated online to show which businesses accept bitcoin.
Digital currencies, like bitcoin, have the potential to revolutionize retail payments. Quicker settlement, lower fees, and fewer cross border hassles will reduce transactional friction in the growing digital economy.Adoption is on the rise, and over time, existing payment systems may integrate Bitcoin and become the preferred method of payment amongst consumers. As you go about your holiday shopping this season, don't forget the many ways you can spend your bitcoin.Image credit: publicdomainpictures.net
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