It’s been over a decade since the world’s first cryptocurrency entered the financial landscape. Bitcoin has steadily integrated itself into the modern world, with the network having undergone several upgrades to ensure that it functions optimally to support this.
As more businesses start onboarding Bitcoin as a payment option, naturally more users are asking what they can buy with BTC. Here we break down the what, how and where of making purchases with the famed digital currency.
The Upside To Paying With Bitcoin
The decentralized network that operates the Bitcoin platform is renowned for its strong security and cross-border capabilities. With Bitcoin, international transactions can be cleared in minutes, incurring very little fees (when compared to fiat transactions of that nature).
Another benefit to using this digital currency is that there is no need for a middle man, allowing transactions to be directly sent from one party to another. Again, this cuts out time and money. These transactions are also more discrete, as they are not listed on any bank statements or traditional banking platforms. They do however incur tax implications.
The Downside To Paying With Bitcoin
Of course, there are two sides to any coin, and there are certainly downsides to using the cryptocurrency. While cross-border BTC transactions tend to be quicker and cheaper than fiat currencies, they can also be susceptible to surges in transaction fees. When the network is congested with many users trying to make transactions at the same time, the transaction fees tend to soar.
Due to the nature of the blockchain network, Bitcoin can only process a limited amount of transactions every ten minutes, equating to a max capacity of seven transactions per second. This is a far cry from what Visa or Mastercard can process, however, these payment giants have been known to queue transactions for days in some cases when congested, while Bitcoin transactions will only ever take a couple of hours.
A solution that the crypto community has provided to this issue of high congestion on the Bitcoin network is the lightning network, which we’ll explore in greater detail below.
What Is The Lightning Network?
The lightning network is designed to facilitate faster transactions on an already established blockchain, like Bitcoin or Litecoin for instance, through the use of micropayment channels.
This second layer protocol utilizes its own network of nodes to more quickly and cost-effectively conduct transactions than the underlying blockchain network is capable of doing.
The second layer protocol uses smart contracts and multi-signature scripts that enable users to open “channels” through which they can quickly conduct transactions.
These transactions are then facilitated by a “decentralized” network of lightning nodes. By moving transactions off-chain, the lightning network is able to more efficiently confirm transactions, while also decongesting the original blockchain.
However, the downside to using this second layer product is that it’s not very user-friendly and isn’t as well integrated into wallets and products of that nature, yet. To make use of the lightning network users are required to create and deposit BTC into their own lightning channels before making the Bitcoin payment. This channel then needs to remain open until the transaction has been executed.
In the future it is believed that the lightning layer will become more integrated into the industry and make micropayments a reality for many networks. This will also provide a means for users to avoid high transaction fees when the network is congested.
What Can I Buy With Bitcoins?
Now that we’ve covered the ins and outs of making payments using Bitcoin, let’s explore what is on offer. With the online shopping sector becoming more and more popular, Bitcoin does present an easy and convenient means of making payment, especially when using a mobile wallet and QR code.
The biggest online stores currently accepting Bitcoin include the likes of Overstock, Home Depot, Newegg, Shopify, and Microsoft. Many shoppers looking to pay for goods in Bitcoin opt for gift cards, with many platforms offering gift cards to big retailers for a range of cryptocurrencies.
There are also plenty of service providers accepting BTC payments. As integration continues you’ll see a growing trend of companies across a wide range of sectors opening the payment channel. Service providers from AT&T to Twitch, NordVPN to ProtonMail to Vultr are all accepting Bitcoin payments. WordPress, Reddit, and publications like Bloomberg and Chicago Sun-Times have also started accepting the cryptocurrency.
In terms of restaurants, a few big-name franchises have been leading the way (although not every franchise offers the option). Subway, Burger King and Whole Foods have been the most prolific in this category.
Payments in Bitcoin in the travel sector have also recently ballooned, with a huge variety of companies catering to crypto enthusiasts. These include the likes of the world’s first commercial spaceline, Virgin Galactic, AirBaltic, Expedia and Travago, as well as multiple hotel chains with locations around the world. High rollers can also now purchase a yacht with their BTC through Denison Yacht Sales.
There are even universities around the world that are accepting Bitcoin as tuition payment, with ones located in Australia, the United States, Cyprus and Germany.
While the lists of companies accepting Bitcoin grows by the day, it’s always worth checking the payment options on a retailer’s website to see if it is Bitcoin-friendly. As the world becomes more accustomed to Bitcoin and other digital currencies, more and more brick-and-mortar and online stores are going to accept cryptocurrency payments.