Crypto assets have exploded in popularity over the past few years. However, the latest talking points in the sector are much different from the early days of Bitcoin. Back then, Silicon Valley startups were talking about using the Bitcoin network. Mainly about the Bitcoin network to cut out various middlemen involved in online payments. As time went on, it became clear that bitcoin would need to further develop as a store of value. Especially before it could deliver on its promise as a way of making cheap, irreversible online payments. Additionally, at the time secondary protocol layers, such as the Lightning Network, were in need of development. Mainly to enable a more practical way of processing lower-value payments.
Most people still can’t directly pay for everyday purchases at grocery stores, gas stations, and other physical locations. However, there are a number of workarounds that you can use to turn crypto into real-world goods and services. In fact, some of these methods come with additional bonuses. These bonuses can be cash-back rewards or effective discounts on purchases made at big brand stores.
Stores Accepting Crypto/Bitcoin Directly are Still Rare
Although we’re seeing a renasicance in the use of bitcoin for payments thanks to the development of the Lightning Network, the reality is there are likely zero or less than a handful of merchants currently accepting bitcoin directly in your local area. That said, there are some cities around the world that have adopted crypto payments more heavily than others. Looking at Bitcoin adoption on the national scale, the only country making a hard push in that regard is El Salvador. In this central american country, merchants are required to accept bitcoin as legal tender by law; however, locals say the law is only enforced in the major cities for now.
Of course, bitcoin and crypto adoption is a bit more prevalent among online merchants. Some major online retailers, such as Overstock and Newegg, have accepted crypto payments for a number of years. Even Tesla briefly accepted bitcoin payments for their vehicles. This was before deciding to reverse the decision until more of the Bitcoin network hash rate is being powered by renewable energy sources. For now, Tesla still accepts Dogecoin in their online shop for merch and accessories.
Crypto-Powered Debit Cards Can Be a Useful Workaround
One of the most popular ways for crypto users to access liquidity from their digital asset holdings is through cryptocurrency-powered debit cards. These debit cards are provided by well-known brands like Visa and Mastercard. They allow their customers to use crypto anywhere major cards are allowed around the world. There are a wide variety of different types of crypto debit cards on the market these days. Some require cardholders to convert their crypto to fiat currency before they can spend it via the card.
Crypto Rewards
There are many different crypto cards which offer cash back rewards to their users. These rewards usually range anywhere from 1% to 5% depending on the specific card offering chosen by the user. However, you should note that some of these cash back programs come with additional strings attached. For example, there is sometimes a requirement to stake a proprietary crypto token associated with the company behind the card.
This opens additional risk to the cardholder, as a sudden drop in the value of the staked crypto token could more than offset the potential rewards gained via the cash back program. That said, crypto debit cards that don’t have staking requirements can be attractive because cash back rewards are rare in the traditional debit and prepaid card space. These cash back rewards are also oftentimes able to more than cover the fees that are sometimes a charge from converting crypto into fiat on the card.
One should note that there are a number of ways to earn crypto rewards. Thes are crypto rewards on traditional, fiat-based spending as well. There are a number of traditional credit cards, such as those offered by Gemini and BlockFi. These allow you to earn bitcoin-denominated cash back rewards. Apps like Lolli and Fold can also help users gain access to potentially-large bitcoin rewards on their traditional spending habits.
Get Discounts By Swapping Crypto/Bitcoin for Gift Cards
One final method of spending crypto at your favorite retail stores is to convert crypto into gift cards. In fact, this has been one of the more popular ways of turning crypto into spendable cash. There are a number of peer-to-peer exchanges, such as Paxful, that allow users to trade between different cryptocurrencies and gift cards.
This is such a common transaction in the crypto world that an entire company, known as Purse, is in creation on the premise of enabling Bitcoin users to get 15% off or more when shopping on Amazon. This sort of activity slowed down a bit when on-chain transactions became prohibitively expensive back in 2017, but it has now come back thanks to entities like Paxful and Bitrefill integrating with the Lightning Network. One should note that these sorts of large discounts are usually only available for those using bitcoin. This is due to the large liquidity advantage the world’s largest crypto still enjoys compared to the competition.
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