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Cryptocurrency has been a hot topic in recent years, with financial journals and investment programs running many stories on the subject. Despite the hype, the average person may not understand what cryptocurrency is or what it can do. That’s understandable because cryptocurrency is a unique approach to financial transactions and investments.
Crypto is a totally digital currency that is also decentralized — it does not have the support of a central bank or government. Currently, there are thousands of cryptocurrencies, with Bitcoin being the most well known. If you own crypto, you cannot physically hold it or put it in your traditional bank account. It has no physical component, so you can’t pull out crypto and hand it to a merchant. Instead, you’ll need to keep it in a wallet app or on a computer hardware device. These differences may well have you wondering how to spend cryptocurrency.
Crypto was intended to function as an easy way to buy things without having your information known by a bank or other centralized entity. Based upon a blockchain, a type of database that enters information through blocks, a group or an individual does not control crypto. Despite this decentralization, crypto transactions are completely secure. Some financial experts consider it the currency of the future, while others are not so certain. Although crypto is growing, it has not yet become the average person’s currency of choice.
Currently, you might find it difficult to go to the gas station and fill up your tank using crypto. Your grocery store or online store might not take it either. But the number of vendors who will accept crypto is growing. However, many will only take Bitcoin and not some of the lesser-known cryptocurrencies.
A recent survey shows that 36% of small and medium businesses will accept Bitcoin. Some major companies that accept Bitcoin are:
Some companies only accept Bitcoin and some other crypto through Coinbase, a well-known cryptocurrency exchange that offers a crypto wallet. Each company’s policy toward cryptocurrency is different, so you’ll need to do a little research.
If you think your crypto purchases are limited, you might be surprised by some items you can buy. For instance, you can buy a Tesla if you have the Bitcoin funds, although the company has some strict guidelines. You must finalize your purchase within 30 minutes, and Tesla will not refund overpayments. You can also order a BMW with Bitcoin, but you’ll have to use a third-party site. Other items you can spend crypto on include:
How to spend cryptocurrency is becoming less confusing as your options grow.
When considering how to spend cryptocurrency, you may decide to keep it as an investment. In fact, many people consider cryptocurrency as a hybrid currency/investment. Some people have invested in crypto because they expect it to grow in value and not because they intend to spend it.
In 2021, many types of cryptocurrency have been performing well as part of an investment portfolio. A Bitcoin, the original crypto, was worth about $500 five years ago. As of August 2021, a Bitcoin was worth over $45,000, an 8,900% growth rate that left investors in disbelief.
Some investors have used crypto as a vehicle to finance college or to simply increase their net worth. In the last five years, this strategy has been successful, leaving those who avoided crypto to lament their choice.
Cryptocurrencies such as Bitcoin and Ethereum have gained acceptance as lucrative investments. As more people realize how to spend cryptocurrency, it will lose its mystery and be seen as a practical and safe way to pay for everyday purchases. Remember, consumers once saw debit and credit cards as a slightly suspicious way to complete transactions. They preferred to deal with cash. Now some people rarely carry bills.
Some people embrace cryptocurrency because big banks or individuals do not control it. This egalitarian approach to finance attracts many who feel that large financial institutions have too much power and fear another 2008 global financial crisis.
Crypto appears to be here to stay. It is gaining acceptance as a way to buy common items and has performed well as an investment. When you learn how to spend cryptocurrency, you may become a supporter as well.