How to spend cryptocurrency?
At the very beginning, cryptocurrency was tipped as a substitute for traditional notes and coins. Then it began to be seen as merely an asset to buy and trade on the digital exchange. Today, again, more and more people wonder how to spend cryptocurrency and use it on a daily basis. The article looks at how to store cryptocurrency and the ways to spend it, as well as the issues and opportunities it gives.
Ways to store and save cryptocurrency
Before spending your cryptocurrency on purchases and other things you have to keep it somewhere. As with traditional banknotes and coins, you can use wallets and crypto exchanges.
This is one of the most obvious ways to store digital assets. The basic idea of a currency exchange remains the same: a buyer converts traditional money (e.g. dollars or euros) to a cryptocurrency of his choice. The funds you thus purchase are not overseen by the government and have no material equivalent in either paper or metal.
Cryptocurrency exchanges give an opportunity to buy, trade, and withdraw funds, similar to traditional exchanges. Nevertheless, people do not particularly trust them. First, there have been security issues that led to the theft of people’s assets. And secondly, like any bank or investment company, a crypto exchange may go bankrupt but, unlike traditional institutions, it is not protected against any force major situation. Last but not least, if you store your crypto money with the crypto exchange, it is the exchange that owns it.
For all the above reasons, smart crypto investors (not traders) prefer to store their assets in a digital wallet. If you have been asking yourself what is the best way to store cryptocurrency, read on.
Wallets may be real devices, akin to a flash drive, or a digital app that you can access with a private key. Without this complex password generated uniquely for you, nobody is actually able to access your wallet. Some exchanges claim to also provide wallets but in fact, this is just a figure of speech. Wallets are offered by independent providers.
Wallets come in two main types: hot and cold. A hot wallet is connected to the internet and can be conveniently accessed from the browser or mobile phone. As much as they are easy to use, they are very vulnerable to hackers. Cold wallets, on another hand, are not wired and resemble a flash drive that you either carry around (but beware of losing it) or store securely at home. Although not so convenient, cold wallets are much more secure than hot ones.
How to spend cryptocurrency
Recent years have seen the growing popularity of cryptocurrencies. We hear about more and more ways to spend it, and an increasing number of enterprises begin to accept crypto money for payments. Speaking of Canada, the options of spending cryptocurrency there are still rather limited. So, if you are looking for what you can spend your cryptocurrency on in Canada, read below for some of the ways available in this country.
Convert back to cash
This is the first and most obvious way. Just buy cryptocurrency with cash, so you can convert your assets back into physical money. There are respectable platforms, like Coinsmart, that ensure reasonable exchange fees and highly secure transactions.
Use a crypto-ATM
Over 800 crypto-ATMs are presently spread across Canada, and the number is growing. They predominantly specialize in purchasing Bitcoin and sometimes other digital currencies; however, some do allow to convert digital funds into Canadian dollars and withdraw them from the card.
Use prepaid cards
You can use these cards just as a traditional prepaid card if you travel abroad. For example, you load Canadian dollars and travel to Europe where the card’s funds are automatically converted into euros. Same with crypto: instead of making payments with digital currency, your crypto is converted into a traditional currency when you make a purchase. In this regard, prepaid cards are convenient and simple to use.
The catch with some crypto cards providers is such that you have to be a stockholder of their tokens before you can even apply for a card. For this reason, the easiest option at the moment is to buy a prepaid card loaded with Canadian dollars from one of the digital providers.
Present gift cards
Gift cards have long been a perfect present. In the digital era, you can purchase a gift card loaded with a specific amount of cryptocurrency and give it as a present. A growing number of enterprises and retailers are not accepting these cards, including Air Canada and Amazon. If you order a gift card from Coincard.ca, you are not limited to Bitcoin; Ethereum, Dogecoin, Monero and some others are also an option. As much as this is a convenient and easy way to use your digital assets, we recommend paying attention to transaction fees.
Based on the principle of converting cryptocurrency into Canadian dollars, this option is a great way to spend your Bitcoins.
A growing number of charities are presently accepting donations in digital currencies. If paying bills and shopping does not inspire you, then donating Bitcoins to a good case certainly will.
Buy things directly
The number of Canadian retailers that accept cryptocurrency is growing. Shopify, an e-commerce company that works with international merchants, has recently begun accepting crypto as a form of payment.
Pros and cons of using cryptocurrency for transactions
As much as digital currencies are popular, and opinion leaders and celebrities do everything to push them forward, there is a long way to go before they may go mainstream. There is a good reason for that, so here are some advantages and disadvantages of using digital money. One thing is certain, though: it is not about replacing real banknotes and coins.
- No banking fees: this is the biggest advantage of cryptocurrency. There are no late fees or overdraft fees, nor high interest rates.
- Anonymous: this aspect is important for those who prefer to leave no digital imprint. If you pay with digital money, no bank, credit card company and even government officials can track your transactions.
- Accessible: as long as you have enough money to invest in buying cryptocurrency, you can have it. No worries about passing a credit check and income assessment.
- Volatile: the value of cryptocurrency depends entirely on how many people buy them. You are therefore never aware of the actual purchasing power of your digital assets.
- Irreversible transactions: this means, quite simply, that if something goes wrong with your transaction, you are nowhere to turn to reverse it, as you would if you used a traditional bank.
- Rare: the options to use cryptocurrency are still limited in all countries. It may take a while to see it become an accepted form of payment.
- Self-reliance: using cryptocurrency means always keeping abreast of all changes in the field of blockchain, Bitcoin, digital assets, etc. Only serious investors that are ready to monitor the exchanges and take care of their wallets and keys are likely to actually bother to buy cryptocurrency.
The above are basic ways of how to spend cryptocurrency today. We all agree that anonymity and accessibility are by far the most attractive traits of any cryptocurrency. People have been frustrated by the inability to own money, and digital assets let them do just that. However, it does not come without any significant problems. There is no fraud protection for the funds, and the inability to reverse a transaction that has gone wrong is a serious blow to the prospects of using digital currency to purchase things. Most transactions are still limited to online payments, and volatility is another issue that prevents using crypto money confidently for payments. These problems will certainly be addressed in the future; yet for now, using cryptocurrencies for payments is still rather risky.