Anyone that finds this article has probably heard of Bitcoin, but I bet most of you have never actually played around with it. It turns out that one of the brilliant aspects of Bitcoin, and it’s underlying technological innovation, is that is can be ‘used’ in a wide variety of ways. Today we’ll focus specifically on the classic use case: Using Bitcoin to buy stuff.
Bitcoin is not your bank/debit card
Some day soon, you will be able to buy and sell with Bitcoin the same way you use a credit card or debit card, but it’s important to point out that Bitcoin is a fundamentally different method of transferring value. For a detailed introduction, I highly recommend this Youtube video from WeUseCoins:
1. Setting up a Bitcoin wallet is easy
In order to use Bitcoin you’ll need wallet. Fortunately, this is incredibly easy to do. With over 10 different web, mobile and software choices, you can easily find a wallet that suits your needs. If you’re just starting out I suggested heading on over to Blockchain to create a wallet. You can choose between a mobile wallet for Android and iOS or a web wallet if that’s your preference.
2. Anyone can acquire Bitcoin
There is so much Bitcoin in circulation now that it’s really quite easy to acquire any any reasonable amount:
There are quite a few Bitcoin ATMs in Vancouver and using one is an easy way to grab some Bitcoin, however you will pay a premium for this service (>3%). Check out the first ATM ever, at Waves in downtown Vancouver.
Simply put, exchanges are places where buyers and sellers of Bitcoin come together to trade. There are several options for Canadians to buy and sell Bitcoin on an exchange in CAD:
- Vault of Satoshi
- Quadriga CX
Note, when using an exchange you are subject to transaction fees. Generally, you pay to process a deposit of CAD and for all trades on the exchange, which are fairly reasonable (<1%).
Online via Interac:
If you aren’t looking to buy a lot of Bitcoin and merely want to acquire some to play around with, I recommend InstaBT. Be wary of this method, as InstaBT charges much more than an exchange.. As of today, 0.5BTC from InstaBT would cost me $44 above market price, or a premium of almost 11%!
While buying online certainly has a convenience to it, this isn’t always the best choice as it can be either expensive, or require you to provide a lot of personal information in order to create an account. An alternative is buying in person through a service like LocalBitcoins. LocalBitcoins is a great way to connect with local traders, but I highly recommend you watch the intro video before proceeding. You’ll be dealing with individual traders so it’s important to understand the process so you don’t get scammed.
3. Spending Bitcoin is easy
Bitcoin is rapidly growing into a viable payment method and it’s never been easier to actually go out and buy something with Bitcoin. There are literally thousands of retailers accepting Bitcoin online and in-person, including large retailers like NewEgg, Overstock and Dell.
To find local businesses that accept Bitcoin, check out Coin Map and choose your location. There are currently over 5000 businesses that accept Bitcoin and the list is growing rapidly! You can also find online businesses that accept Bitcoin through BitPay, a payment processor.
4. Adoption drives acceptance
Bitcoin and crypto-currencies are a relatively new phenomenon. Bitcoin was born in 2009 but in only 5 short years we’ve seen massive growth in interest. In it’s current form, much of this interest is in the form of speculative investment which, although adds some excitement to the subject, doesn’t really provide any utility aside from increased liquidity in the market. Bitcoin will only truly be accepted once a critical mass of users have adopted it for it’s intended use as a currency and this is the #1 reason why you should give it a go.