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Bitcoin is more than just a concept in which people exchange digital money that somehow gains value without existing in cash form. It can be used for real-world purchases, for everything from ordering pizza (the first commercial purchase that used Bitcoins) to buying cars and apartments. Its use is only limited by the number of merchants who accept it. Even if a particular merchant doesn’t accept Bitcoins, you can use your Bitcoins to buy a gift card to use.
Online Purchases
There is a growing number of online retailers that accept Bitcoins as a form of payment. Microsoft and overstock.com are two major online retailers that accept Bitcoins. Others include Virgin Galactic (which includes retail stores and the airline), Word Press, Reddit, OkCupid, Expedia, Dell, Wikipedia, Whole Foods, the online newspaper Bloomberg, and some Etsy vendors. Some eBay merchants also accept Bitcoin. Many of these online retailers provide services rather than physical goods, but some, such as Dell and Whole Foods, do provide physical goods. The fact that Bitcoin can be exchanged for physical goods rather than just digital services shows that it does have real value outside of the Bitcoin community.
Physical Goods
A growing number of vendors are accepting Bitcoin payments for the physical goods that they sell. To find out if your preferred vendor accepts Bitcoin, look for a sign saying that Bitcoin is accepted. If you know of a local small business, either online or in a physical store, that you think should accept Bitcoin, talk to the owner. The philosophy behind Bitcoin is similar to many small businesses, and many owners will be happy to begin accepting Bitcoin in exchange for their goods. If enough people request it, large retailers like Amazon and Wal-Mart may even begin accepting Bitcoin for their goods. Think of what a boost that would be to the movement!
While waiting for retailers like BestBuy and Amazon to accept Bitcoins, there is a way to work around that limitation. Gyft is a website that allows you to purchase gift cards for many different merchants using Bitcoins. You can use your Bitcoins to purchase, say, a $100 gift card to Amazon and then use that gift card to buy what you wanted. Indirectly, you are using your Bitcoins on that purchase.
E-commerce
Sending money can be quite an expensive endeavor. After all, the third parties who are handling the money need to be able to pay for things like salaries and IT. Because no middleman is involved, Bitcoin is a much cheaper alternative to services such as PayPal and the Western Union. You can send money to anyone who has a Bitcoin account as long as you know that person's private key. The transaction will involve a small fee, which is used to pay the miners to verify the transaction. There may be an additional fee associated with the wallet that you use, but it will probably be much lower than what traditional money senders charge.
Physical Stores and Establishments
Subway was one of the first mainstream brick-and-mortar companies to begin accepting Bitcoins as a form of payment. Stores that do not exist online, or that do exist online but also have physical establishments, are accepting Bitcoin in greater numbers. To use your Bitcoins at one of these locations, you will need to download a mobile wallet. Keep in mind that mobile wallets are the least secure, so don't keep large amounts of Bitcoins in them.
Overseas Transactions
Exchanging fiat currency can be quite expensive. Anybody who has done much traveling will know that this is true. Many banks and money exchanges provide services in which they exchange dollars for other currencies, but usually with heavy fees attached and a lower exchange rate than what actually exists, meaning that you get far less in the other currency than what your money is actually worth. Because Bitcoin does not exist as a national currency, it maintains the same value across international boundaries. One Bitcoin is worth just as much in the United States as it is in the United Kingdom. You can go to a Bitcoin ATM and redeem your Bitcoins for the same amount of currency as what they are actually worth.
Additionally, you can use your Bitcoins to buy from foreign merchants who accept Bitcoins without having to worry about currency exchange fees. If you are in the United States and wish to purchase something from a merchant in China, you may incur additional fees related to changing dollars to yen. But if you use Bitcoins, there will be no fees because the currency is not changed for another currency.
Online Purchases
There is a growing number of online retailers that accept Bitcoins as a form of payment. Microsoft and overstock.com are two major online retailers that accept Bitcoins. Others include Virgin Galactic (which includes retail stores and the airline), Word Press, Reddit, OkCupid, Expedia, Dell, Wikipedia, Whole Foods, the online newspaper Bloomberg, and some Etsy vendors. Some eBay merchants also accept Bitcoin. Many of these online retailers provide services rather than physical goods, but some, such as Dell and Whole Foods, do provide physical goods. The fact that Bitcoin can be exchanged for physical goods rather than just digital services shows that it does have real value outside of the Bitcoin community.
Physical Goods
A growing number of vendors are accepting Bitcoin payments for the physical goods that they sell. To find out if your preferred vendor accepts Bitcoin, look for a sign saying that Bitcoin is accepted. If you know of a local small business, either online or in a physical store, that you think should accept Bitcoin, talk to the owner. The philosophy behind Bitcoin is similar to many small businesses, and many owners will be happy to begin accepting Bitcoin in exchange for their goods. If enough people request it, large retailers like Amazon and Wal-Mart may even begin accepting Bitcoin for their goods. Think of what a boost that would be to the movement!
While waiting for retailers like BestBuy and Amazon to accept Bitcoins, there is a way to work around that limitation. Gyft is a website that allows you to purchase gift cards for many different merchants using Bitcoins. You can use your Bitcoins to purchase, say, a $100 gift card to Amazon and then use that gift card to buy what you wanted. Indirectly, you are using your Bitcoins on that purchase.
E-commerce
Sending money can be quite an expensive endeavor. After all, the third parties who are handling the money need to be able to pay for things like salaries and IT. Because no middleman is involved, Bitcoin is a much cheaper alternative to services such as PayPal and the Western Union. You can send money to anyone who has a Bitcoin account as long as you know that person's private key. The transaction will involve a small fee, which is used to pay the miners to verify the transaction. There may be an additional fee associated with the wallet that you use, but it will probably be much lower than what traditional money senders charge.
Physical Stores and Establishments
Subway was one of the first mainstream brick-and-mortar companies to begin accepting Bitcoins as a form of payment. Stores that do not exist online, or that do exist online but also have physical establishments, are accepting Bitcoin in greater numbers. To use your Bitcoins at one of these locations, you will need to download a mobile wallet. Keep in mind that mobile wallets are the least secure, so don't keep large amounts of Bitcoins in them.
Overseas Transactions
Exchanging fiat currency can be quite expensive. Anybody who has done much traveling will know that this is true. Many banks and money exchanges provide services in which they exchange dollars for other currencies, but usually with heavy fees attached and a lower exchange rate than what actually exists, meaning that you get far less in the other currency than what your money is actually worth. Because Bitcoin does not exist as a national currency, it maintains the same value across international boundaries. One Bitcoin is worth just as much in the United States as it is in the United Kingdom. You can go to a Bitcoin ATM and redeem your Bitcoins for the same amount of currency as what they are actually worth.
Additionally, you can use your Bitcoins to buy from foreign merchants who accept Bitcoins without having to worry about currency exchange fees. If you are in the United States and wish to purchase something from a merchant in China, you may incur additional fees related to changing dollars to yen. But if you use Bitcoins, there will be no fees because the currency is not changed for another currency.
Mastering Bitcoin for Beginners - Neil Hoffman
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