Welcome fren! Have you finally understood What Bitcoin Is but are now stuck asking… what can you do with Bitcoin? Maybe the bitcoins you bought have shot up in price and you want to go on a cool holiday? Many who have no actual understanding about Bitcoin try to spread the ridiculous myth that it’s “useless” or “just for speculating”.
In reality it’s got a number of seriously ground breaking things to offer right here and now. It doesn’t matter if you’re poor in a third world country or a billionaire collecting yachts, Bitcoin gives hope and has something for everyone!
What Can You Do With Bitcoin?
While the Internet is at its heart a very simple idea – the connection of two or more computers – it quickly becomes more than the sum of its parts when scaled up thanks to the Network Effect. Bitcoin, just like the Internet, becomes much more than its parts when scaled up.
It allows people to transfer value without any third party, bank or government in between. A simple idea, but one that quickly enables a host of world changing capabilities that we’ve never had access to before. While some of these capabilities have already been realised (for example transferring billions in minutes for a few dollars) many are still to come as Bitcoin grows over time.
For now, for us regular non multi-billionaires, Bitcoin allows anyone to:
- Spend it. Just like any other money, you can spend your bitcoins at hundreds of thousands of places all over the world. Check out the below section for more details.
- Store monetary value over time. While not immediately different to say, putting your money in a bank account, Bitcoin isn’t inflated away at 2-3% (or 9.1%!) each year. Instead it has a current inflation rate of about 1.7% which reduces every ~4 years in a set way. Simply keeping your money stored throughout time (from 10 years to 100 years) and it not being siphoned away or debased by taxes / inflation / companies going bankrupt is a major Bitcoins use.
- Store monetary value without anyone’s permission. While this might seem like a trivial thing to be able to do to anyone that has a bank account in a first world country, billions of people in the world cannot get a bank account and thus, can never save their money long term, send it to others or receive it for activities like running a business. With Bitcoin, this is now free for anyone with a smartphone to use forever.
- Store monetary value beyond the reach of a government. For those in first world countries, this again isn’t a big concern as currencies like the Dollar or the Euro don’t suffer from hyperinflation. For billions more people under authoritarian regimes or double or triple digit inflation this is a critical use. Most of these people have no choice but to use the currency of their country, currencies that are often seized by tyrants, inflated away to nothingness or just declared worthless overnight. Bitcoin gives them a choice and a impenetrable safe storage place for the first time in history.
- Send money overseas instantly and cheaply. If you’ve ever tried to send someone overseas $10 (or even a larger amount) you’ll know how difficult, slow and costly that “simple” exercise can be. It involves multiple banks, currency conversions, fees and intense privacy invasive “checks”. By contrast, with Bitcoin you can send anything from $1 to the aforementioned billions with final settlement occurring in minutes and for cents. For more info, check out our detailed piece How Long Does Bitcoin Take To Send?
- Send free and instant Remittance. Remittance is a multi-billion dollar industry that charges horrendous fees (5%-50%) and takes weeks over the legacy financial rails. With Bitcoin and the Lightning Network remittance can be instant and free for everyone. Being entirely online it also saves people from having to travel for hours every week just to withdraw the money from a physical location where they have a high chance of being robbed.
- Transact without being banned. While you might think of terrorists or drug lords as the only “baddies” being banned by banks, there are many countries where simply being female means you cannot have a bank account. Sex workers (and even those simply discussing sex) are also often banned or demonetised. Bitcoin allows for them to transact and have access once again.
- Take their wealth with them when fleeing a country. Even in Europe, fleeing a war torn country isn’t off the table these days and with Bitcoin you can take any amount of wealth with you either with a Hardware Wallet (also sometimes called a Signing Device that’s basically just a USB drive) or by even just remembering 12 short words.
That’s not all either, there are Layer 2 applications built on top of Bitcoin that enable instant and near free transactions of fractions of a cent enabling creators to charge for their content by the page, second, podcast, video, minute and many other things too.
How To Protect Bitcoin Investments
One of the most common uses of Bitcoin is its “store of value” use case as mentioned above. The inflation rate of Bitcoin is second only to gold currently (gold is about 1.56% while Bitcoin is about 1.7% per year). However after the next Bitcoin Halving occurs in 2024 it will be reduced to around 0.83% per year making it the lowest in the world!
In order to make use of this store of value benefit you need to still have full control over your bitcoins 10 or 20+ years from now. As covered in our previous piece on What Is Bitcoin, one of the top drawbacks of Bitcoin is its hacking exposure.
New to Athena Alpha? Start today!
Bitcoin is entirely digital meaning it has a much bigger surface attack area for hackers to exploit. With the rise of centralised exchanges, this further increases the risk to people loosing their bitcoins to hacking, the Crypto Exchange Going Bankrupt or Bitcoin Scams.
The entire topic of Bitcoin Wallets, self-custodial vs custodial, software vs hardware ones and the securing of bitcoins is far outside the scope of this piece. We go in depth on all of this in our piece on What Is A Bitcoin Wallet, but for now here’s a few key points.
- Bitcoin Security your Bitcoin Privacy is a spectrum
- How you protect $100 in bitcoin vs $100,000 vs $1,000,000+ differs greatly
- Ensure you take full custody of any funds that you don’t want to lose
- Ensure you use a Hardware Wallet (also sometimes called a Signing Device that’s basically just a USB drive) for funds that are at or above what you might keep in a savings account
No security is perfect, however as you go through your own Bitcoin Journey and your funds grow, so too should your security and privacy. The below table outlines security and privacy recommendations to help you know when to consider upgrading or improving things. Regardless of what level you’re at, we have a host of in depth info in our Privacy and Security sections.
|Funds Amount||Pocket Money||Savings Account||Serious Investments|
|Wallet Type||Software (Hot) /|
|Hardware (Cold)||Hardware (Cold)|
|Signature Type||Single Signature||Single Signature||Multi Signature|
|Key Custody||Self Custody||Self Custody||Self Custody|
|Key Backup||Laminated Paper||Laminated Paper||Metal Seed Plate|
|Key Security||None||Fire Proof Safe||Multiple Methods|
|Own Full Node||No||Yes||Yes|
|Electrum Server||Public Electrum|
What Can You Buy With Bitcoin?
Having your bitcoins safely locked down for long term investment isn’t the only use though, there’s hundreds of thousands of places that will gladly take your precious bitcoins in exchange for goods and services. From buying a hardware wallet to paying your phone bill to buying yachts 3AC style there’s likely a lot more options than you might think.
IRL Retail Stores
For all the best places in meatspace that accept bitcoins you can use a number of different directory services that catalogue, search and display stores closest to you. From Spendabit that claims to be able to search across over 5 million products, to Coinmap (30,000 venues) or useBitcoins (5,000+ businesses) there’s certain to be something near to you. Big chains that already accept bitcoins include:
- Circle K
- Home Depot
- Burger King
- Pizza Hut
- Whole Foods
Online Stores & Games
Moving online to Bitcoins home turf, there are even more platforms, services, products and things you can buy. You can host websites, get premium email, cloud services, pay for games and more. Big named sites include:
- Microsoft / Xbox
- Coinkite (COLDCARD Hardware Wallet)
- Shift Crypto (BitBox02 Hardware Wallet)
Travel Agents & Airlines
Another big growing market accepting bitcoins is the travel industry. Not too surprising given many people who’ve become rich within crypto might want to use that wealth to go on an expensive holiday. Some of the biggest players in town such as Expedia are on the list making it quite easy too!
- LOT Polish Airlines
- Peach Aviation
- Surf Air
- Virgin Galactic
For The Ballers
Been in Bitcoin since 2010? Mined 50,000 BTC on a first gen Core i5 laptop? You might be a baller and there’s a lot of cool stuff you can do with those bitcoins if you’ve got them!
- Prestige Cars Kent
- Prestige Time
- Watches World
- Denison Yacht Sales
How Does A Bitcoin Debit Card Work?
Even with the huge growth in online and offline places that now accept bitcoin there’s likely a lot of stores that don’t accept it still. With a Bitcoin debit card you can purchase literally anything with bitcoins just like you would a normal debit card. You simply transfer some bitcoin to the card to load it up, then use it as per normal at any shop that accepts card payments.
When you purchase something, your bitcoins get converted into fiat on the fly and the store receives USD or EUR or whatever currency they need. Some of the main companies that offer these types of Bitcoin debit cards include Coinbase and BitPay.
The Athena Assessment
Things are just starting with Bitcoins adoption currently estimated to be at the same point as the Internet was back in 2000 or so, plus it’s growing at a faster rate too! Over the next decade even newer, more amazing capabilities will emerge just like what happened with the Internet. This is why we believe everyone should Learn About Bitcoin.
As such, its expected that the number of merchants that you can use Bitcoin at will only grow, not to mention other new innovations like the Bitcoin debt cards you can get now.
Why Is It So Hard To Spend Bitcoin?
The main reasons most places don’t accept bitcoins even though they may want to is:
– It’s still very new and stores simply don’t know enough about it
– The tools and systems that enable stores to accept bitcoins are still very new
– The high volatility in Bitcoins price makes it difficult to manage
– Storing, securing and doing accounting for Bitcoin is still very new and difficult
– Government regulations and recommendations are still being developed
How Is Bitcoin Taxed?
In most countries Bitcoin is considered an asset just like a stock or a bond. As such, this usually means that when you sell (or spend) your bitcoins it’s treated by the tax office the same way as selling stocks and is a taxable event. Often this means you’ll have to pay Capital Gains Tax (CGT).
Obviously different countries have different rules and CGT rates, but it’s important to keep this in mind if you do plan on spending a significant amount of bitcoins as it’s treated differently to a currency like the USD. Make sure you read your governments tax recommendations or see a professional tax agent that is aware of cryptocurrency tax laws in your area as otherwise you might get a decent shock!
What Travel Companies Accept Bitcoin?
Some of the top travel companies that accept bitcoins natively are Travala, Destinia and Expedia. You can also book with a number airlines that accept bitcoins too such as Emirates, CheapAir, AirBaltic and LOT Polish Airlines