With the increase in trade of Bitcoin, it has become quite evident that Bitcoin has become a means of payment over the world. Large companies accept Bitcoin, the largest and the most popular digital currency at present.
The gradually increasing ease of transfer of Bitcoin has made it a legitimate source of trade. This article tries to uncover the answer to questions regarding the acceptance of Bitcoin.
Why Do Bitcoin Have Value?
Bitcoin is an efficient means of transferring money through the internet. It is also rolled by a decentralized network where there are a transparent set of rules.
This might be the main reason why Bitcoin has become an alternative to the fiat money which is controlled by central banks.
A set of assumptions have been made on how and why Bitcoin has value. The assumptions are given below:
1. It is assumed that Bitcoin will derive its value from its use as a means of a transaction as well as a store of value. It must be considered that the utility of Bitcoin as a store of value depends very much on its utility as a medium of exchange.
It can be said that for Bitcoin to have a store of value, it needs to have some intrinsic value. So, it can be noted that if Bitcoin is not a successful medium of exchange, it will possess no practical utility. Hence, it will have no intrinsic value and will not be a good store of value.
2. The current protocol has stated that the supply of Bitcoin will approach 21 million. At present, the supply of Bitcoin is around 13.25 million.
There is a decrease in the rate at which Bitcoin is released by half coarsely every four years period. By 2022, the supply of Bitcoin, in this way will pass over 19 million.
We assume that this protocol that has been specified will not be changed over time. A change in the protocol will require the agreement a huge number of the computing power which mines the Bitcoin.
3. As the Bitcoin become legal and acceptable across the world by larger scale investors, its instability will reduce. At this point, the volatility in Bitcoin is not a concern for the people who adopt it.
4. At present, the value of Bitcoin is also characterized by speculative interest. Bitcoin is often regarded as a bubble due to the drastic changes in price and huge media coverage since 2013. After Bitcoin are adopted by more investors, its speculative interest will gradually decrease.
5. There will be no involvement of fractional reserve banking for Bitcoin. All the sources of storing Bitcoin will be completely backed by Bitcoin.
There is a methodology that has been applied to the assumptions to see the value of Bitcoin. Bitcoin will be looked at as both a currency and a store of value.
To know what value Bitcoin holds, we need to see what market penetration Bitcoin will achieve in each both the cases. An arbitrary value of 15%, for both the cases, is taken.
This approach is taken to have a current worldwide value of all mediums of exchange and to calculate the value of Bitcoin.
The estimate for the global value of stores of value comparable to Bitcoin, which includes savings accounts, small and large time deposits, money market funds, and gold bullion, comes to 47.1 trillion US dollars.
The estimate for the global value of mediums of exchange and stores of value roughly lands to 72.1 trillion US dollars. As said above, if the Bitcoin were to achieve 15% of this valuation, its market capitalization in current money would be 10.8 trillion US dollars.
When 21 million Bitcoin is in circulation in the economy, the price of 1 Bitcoin will land to $514,000. Thus, in this estimate, the price of Bitcoin in the future will be 1,000 times its current price.
The question that follows this methodology is the adoption that Bitcoin will receive in the days to come. For the current price of Bitcoin, pricing to find out the value of the current price of Bitcoin, it is necessary to involve the pricing of the Bitcoin in the risk of low adoption or failure.
Some models often consider the velocity of money. thus, it can be said that the predictable velocity of money is said to be more or less equal to its current value. Some models also consider the specific industries or markets that Bitcoin could impact or disrupt after its usage.
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Where can I Spend Bitcoin?
If you have a ton of Bitcoin lying around or even if you have only some of it but you want to use it, then don’t worry, because there are many things and places that you can make use of the Bitcoin you possess. Some of them are given below:
- Tipping & Charity
Probably, the best way to utilize Bitcoin is to give them off or receive Bitcoin. For people who lavishly spend their hard earnings, in this case, Bitcoin, you can use it for charity purposes.
You can tip some articles and blog post authors. You can easily donate any number of Bitcoin for some noteworthy cause.
The Wikimedia Foundation also accept this kind of donations. Another way to be charitable is to buy Reddit Gold with Bitcoin and eventually distribute it. To receive these Bitcoin, one must set up charitable donations through the API of Coinbase.
- Common Household Items
Bitcoin has taken over the economic arena in daily lives. Overstock.com is such a site where you can choose over millions of products for sale which is available in Bitcoin.
There are many online stores which have not yet established acceptance of Bitcoin for payment. However, some services like eGifter and Gyft have found a way to use Bitcoin to purchase gift cards.
These cards can later be redeemed at Amazon, BestBuy, and hoards of other widespread retailers. Gift Cards are not the only way you can use Bitcoin.
For video game enthusiasts who also have Bitcoin stashed, it is a relief to find out that Microsoft and Green Man Gaming have started offering games and other apps in exchange for Bitcoin.
The Minecraft server is also currently using the Bitcoin network to operate their in-game currency!
By just downloading a mobile app for IOS or Android, you can take your Bitcoin to many Bitcoin Restaurants. There are many coffee shops which have started accepting Bitcoin.
Expedia has now facilitated the use of Bitcoin to pay for hotels. Cheap Air also facilitates the booking of a flight using Bitcoin.
Ships & Trips Travel helps you to take a cruise with the use of Bitcoin payment. For those wanting to travel by car, many car dealerships are opting to work with Bitcoin.
Also, if a huge Bitcoin hoarder and an astronomy enthusiast are seeking to travel to space, Virgin Galactic will make this possible just by payment with Bitcoin.
Very soon many other businesses both online and offline will start accepting Bitcoin as regular means of payment.
This will foster the growth of Bitcoin in the economy and will make it easier for cryptocurrency investors to use their cryptocurrencies in something useful.
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These Big Companies Accept Bitcoin
Overstock.com has gained a worldwide recognition for being the first big online retailer to start accepting Bitcoin in 2014.
After selecting your desired crypto payment, the payment system will convert the currency into Bitcoin and finalize the purchase.
The world’s largest online travel booking agencies, Expedia bought a game changer by accepting Bitcoin payments in June 2014.
Expedia is teamed up with Coinbase to implement the new payment system for Bitcoin. At present, the payment system is in its infancy since it accepts hotel bookings only.
Gift Cards can be bought from Bitcoin through eGifter. This mobile app allows you to buy gift cards from Amazon, Sephora, Home Depot, and other stores using Bitcoin.
You can later use these gift cards to buy things from these stores. eGifter has partnered with Coinbase for their new Bitcoin-accepting system.
People totally obsessed with gadgets will be happy to know that Newegg, an electronic retail will accept payments of Bitcoin.
BitPay is the payment processing partner of Newegg for Bitcoin. Purchasing an item from a seller from other and not Newegg, might refrain you from this option might be unavailable.
Bitcoin does not accept payments through Bitcoin for certain things like Will Call orders, Newegg Gift Cards (digital), marketplace items, subscription orders, pre-orders, premier memberships, and return shipping labels.
- Shopify Stores
Shopify is a popular online portal for those wishing to sell products through online sites. With a partnership of Bitpay, it was made possible for more than 75 thousand Shopify merchants to start a Bitcoin payment method in November 2013.
Microsoft is also appearing in the Bitcoin world recently since it facilitated the creation of a Microsoft account where the user can deposit Bitcoin.
Users can also then utilize the funds for various purchases like movies, apps, and games in Xbox stores and Windows.
OkCupid, a dating sites which has now begun accepting cryptocurrency. OkCupid has now partnered with Coinbase and allows users to subscribe using Bitcoin. Up to 0.10 Bitcoin or $ 10, a month can be used for the premium subscription.
Another online gift card retailer, Gyft, now accept Bitcoin for Gift Cards. The Coinbase wallet is used to make Bitcoin payment since Gyft is associated with Coinbase.
These gift cards can later be used in more than 200 retailers to buy various products.
A partnership with Coinbase, Wikipedia, the free online encyclopedia has started to accept donations in the form of cryptocurrencies.
Wikipedia’s donation page is now flexible to make donations using Bitcoin once or several times.
Dish Network which is a Satellite television and Internet service provider began accepting Bitcoin as a means of payment since August 2014.
It stands as the first subscription-based TV provider to begin accepting Bitcoin as a means of payment.
The DISH customers can choose between making payments one-time on MyDish.com. They can also make online payments through credit card, debit card or bank account.
- Roadway Moving Company
Roadway Moving Company is a newcomer in the Bitcoin world since it only began accepting Bitcoin for payment at the end of 2017.
It is the first moving company to accept Bitcoin from customers. While hot wallet payments (through the internet) are accepted, cold wallet payments are not accepted.
For the hungry, Bitcoin investors and for those food enthusiasts, PizzaForCoins is almost a blessing sent from heaven.
Bitcoin and more than 45 other cryptocurrencies can be accepted at PizzaForCoins. The site will verify a Pizza joint near you and then brings the pizza to your doorstep.
You will simply have to pay for them with your digital currency.
Whether for airline reservations, hotel bookings or car rentals, CheapAir.com, a travel booking facilitates its customers to purchase flight tickets with Bitcoin.
At present, it stands as the only company to accept Bitcoin currency for air travel. The customers will simply have to pay through their Coinbase Wallet.
- Intuit PayByCoin Services
Intuit helps small businesses to accept cryptocurrency payments. It offers a PayByCoin service as part of its QuickBooks Online electronic invoice service.
These small businesses must first turn on PayByCoin through QuickBooks Labs. Then they must link a Bitcoin payment processor to their QuickBooks Online account going through Company Settings.
If a customer wishes to pay the invoice online with Bitcoin, the customer is presented with instructions from the linked Bitcoin payment processor.
Finally, the business can then choose to receive final payment in cryptocurrency or fiat currency. No fee is charged on this add-on service.
Subway in Buenos Aires is the first in the franchise to accept Bitcoin as a payment method. This, the company says is for the sole purpose of increasing business by increasing the market.
Who Accept Bitcoin? – Watch Infographics
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Advantages of Accepting Bitcoin as a Payment Method
Following are the advantages of accepting Bitcoin as a payment method:
- No Chargebacks
Businesses running online have a major risk of credit card frauds while in operation. There might be cases when the credit card payment charge is reversed.
You not just lose the money but also the product along with it, since you have already shipped it. It is a different case with Bitcoin technology.
In the Bitcoin world, there isn’t such a thing as payment reversal or chargebacks. Since the customers pay from their wallet, the payment is a one way the only transaction allowing no such fraud through credit card.
The risk now falls to the customer of never receiving the product from you. The business stays safe this way.
- You determine transaction fees
If you are a merchant who requires money fast, you can pay any amount to determine how quick you receive payment.
If you do not pay any fee, you will receive the money in a long time from now. Credit card fees are also very high.
In a single transaction, there might be fees of up to 30%. PayPal charges 3 to 4 % and then a fee per transaction.
However, with Bitcoin, you will determine the fees that you are willing to pay to receive the money on time. The computers that host the network are paid the transaction fees.
Then the processing power is distributed among computers on the internet. This way the network owners make money by allowing you to use their system to process transactions as per your determination of the fees.
Transaction in Bitcoin can be done with privacy intact. For businesses offering illegal services, it is an advantage to sell their product or services anonymously.
Although selling illegal merchandise, one can get paid through a legit means. Shady businesspeople have a lot of benefits from Bitcoin payments.
Buyers of these products usually prefer privacy and transact through the means of Bitcoin as well, which can be beneficial for both the sides.
A developer will be needed to add Bitcoin payment method. Bitcoin processors can be used to overcome the poorly secured systems.
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You Need to Know This Before Pay with Bitcoin
- Volatile Market
There might be a severe case of the volatility of Bitcoin if you are one of those unlucky types.
The value of Bitcoin can increase or decrease drastically within minutes of the transaction. There is a case where you can lose some money due to the decrease in the value of Bitcoin.
In many cases, the Bitcoin received have even halved in value due to market crashes. So, to overcome this issue you might as well converting Bitcoin to local currency as soon as the transaction is complete.
When the market shows an upward swing in the value of Bitcoin, people do not usually spend it. Customers lose money if they buy products using Bitcoin when its value is high in the market. So, if you are a business that runs in Bitcoin, the increase in the value might hit you hard.
- Poor security
A lot of Bitcoin applications are not so well protected against hackers and malware. There have been many cases of theft, hacking into the world of Bitcoin.
You might even lose all the Bitcoin in your wallet if you get hacked. It is not as easy as losing files and recovering them.
If you are a business entity, the wallet might hold vast amounts of Bitcoin which might suddenly be gone. To avoid such events, you might use excellent payment processors which can protect your crypto from hackers and malware.
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