How to Use Bitcoin

It's time to upgrade your shopping experience with cryptocurrency

Young man and woman shopping in a mall, using a Bitcoin wallet smartphone mobile app
Shopping with Bitcoin is a lot easier that you'd think. Martin Dimitrov / E+  

Bitcoin is a cryptocurrency (or cryptocoin) that has grown beyond its niche internet origins and has since become a legitimate method of sending and receiving funds. Bitcoin can be used when shopping both online and in traditional physical retail stores and has even been known to be used for making major purchases such as cars and real estate.

Here's everything you need to know about getting some Bitcoin and using it next time you go shopping.

How Bitcoin Works

All Bitcoin funds and transactions are recorded and stored on a sort of network called a blockchain. There is only one Bitcoin blockchain and each transaction on it has to be confirmed and checked by special Bitcoin users, called Bitcoin miners, several times before its processed and locked in. This blockchain technology is one of the reasons Bitcoin has a reputation for being so secure. It's very difficult to hack.

Bitcoin users maintain ownership of their own Bitcoin on the blockchain via a digital wallet. Setting up a wallet is completely free to do via an online web service or Bitcoin wallet app and anyone is allowed to create as many wallets on the Bitcoin blockchain as they want.

Each Bitcoin wallet has a unique ID which is represented by either a string of numbers or a QR code. Funds can be sent between Bitcoin wallets in much the same way an email is sent but instead of an email address, the Bitcoin wallet ID is used.

How to Get Bitcoin

Bitcoin can be earned by mining (i.e. using your computer to confirm transactions on the blockchain) however most people now simply choose to purchase Bitcoin with a credit card or bank transfer via an online exchange such as Coinbase or CoinJar. Bitcoin can now also be purchased from within Square's Cash App on Android and iOS smartphones.

How to Store Bitcoin

Bitcoin technically is always stored on the Bitcoin blockchain and is only accessed by a wallet app or website wallet. These wallets possess unique access codes for the owned Bitcoin on the blockchain so when people talk about storing or holding Bitcoin, what they're really referring to is having access to their Bitcoin.

The most popular ways to store, protect, and access large amounts of owned Bitcoin is through a web service like Coinbase or CoinJar or a physical hardware wallet device like a Ledger Nano S. The Exodus software wallet for Windows 10 PCs and Macs is also a reliable option. For smaller amounts of Bitcoin that are intended to be used during everyday shopping, a smartphone wallet app like Bitpay or Copay is preferred. They're simply more convenient.

How to Spend Bitcoin

When paying with Bitcoin in person at a physical store, you'll be presented with a QR code to scan with your Bitcoin wallet smartphone app. This QR code is the address of the Bitcoin wallet owned by the store for receiving payments.

To scan the code, open your Bitcoin wallet app and select the Scan option. This will activate your mobile or tablet's camera which can be used to view the QR code.

Once the camera detects the QR code, the app will automatically read the Bitcoin address hidden within it and fill out the necessary details for the transaction. You will then need to manually enter the amount of Bitcoin for the transaction and press send. The QR code needs to be scanned from within the Bitcoin wallet app. Do not use your phone's default camera app. That will simply take a photo of the QR code.

Because Bitcoin transactions can't be cancelled or reversed after they're initiated, it's important to double-check the recipient's address and the amount of Bitcoin being sent.

When making a purchase online, you'll often be presented with a QR code which can be used in exactly the same way to make a transaction as in a physical store.

Websites will also sometimes provide you with the actual series of numbers that represent their Bitcoin wallet address. This can be copied to your computer's clipboard by highlighting it with your mouse, pressing the right mouse button, and selecting Copy.

Once you have their address copied to your clipboard, open up your own Bitcoin wallet or account on Coinbase or CoinJar (or other preferred cryptocurrency service). Click on the Send option and then paste the copied address into the Recipient field by right-clicking your mouse and choosing Paste. Next, enter the total cost of the transaction provided to you by the online store, making sure it's exact, and press the Send or Confirm button.

Note: Depending on the blockchain network activity level, the transaction could take anywhere from a few second to a few minutes.

Where to Spend Bitcoin

Bitcoin is being accepted by more and more businesses from smaller establishments to large corporations. Most physical stores will display a Bitcoin Accepted Here sticker near their entrance or check-out while online stores will list it as an available payment method either on the shopping cart or faq pages on their site.

Microsoft Store is one example of a major shop that accepts Bitcoin while Expedia is another. Online business directories such as SpendBitcoins and CoinMap can be used to find local stores or restaurants that welcome Bitcoin payments.

Many stores that accept Bitcoin also welcome payments made in many of the other popular cryptocurrencies such as Litecoin and Ethereum.

Note: Bitcoin is illegal in several countries so it's always important to check where the law stands before shopping while overseas on holiday.

Is Bitcoin Practical for Everyday Shopping?

Native Bitcoin payments are gaining traction however they aren't universally accepted yet. One viable workaround though is the numerous cryptocurrency debit cards which can be loaded up with Bitcoin and other cryptocoins and used to make traditional fiat money payments on the VISA and Mastercard networks. These crypto cards essentially allow anyone to use their Bitcoin almost anywhere with a swipe of a card and they can also be a good idea for those who are too intimidated by the process of making actual Bitcoin transactions with a smartphone app. Another option is to use a Bitcoin ATM which can convert your Bitcoin into traditional money.

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