What to do with a bitcoin?
So now you have a bitcoin. The supposed “digital currency of the future”. Well, what can you actually do with it?
Here’s a quick run-down in case you haven’t heard of bitcoin yet.
Bitcoin appeared as an invention “gifted to the world” by Satoshi Nakamoto in 2008 and was released as open-source software in 2009.
As a form of payment for products and services, bitcoin acceptance by merchants has grown over the years and it’s not hard to discover why. Bitcoin fees are lower than the 2%-3% that are typically charged by credit card processors. Additionally, any fees are paid by the purchaser (the person sending the bitcoins). Lack of charge backs are another attractive feature of bitcoin acceptance for a merchant.
Since there is a high degree of anonymity with bitcoin there is also a controversial dark side to the crypto-currency. Bitcoin is sometimes used for money laundering, in Ponzi schemes, for extortion, malware, ransom-ware and even in black markets.
Silk Road is probably the most well-know Bitcoin black market which was shut down in October 2013 by the FBI. Launched in February 2011, Silk Road operated as part of the dark web and was known for selling illegal drugs, firearms and even implied in murder-for-hire plot attempts. The site’s founder and operator, the self named “Dread Pirate Roberts” (in tribute to the 1987 film, The Princess Bride), is claimed by the FBI to be the Austin, Texas native Ross Ulbricht and was arrested in October 2013, convicted in 2015 and is currently serving a life term without the possibility of parole.
However, despite all of this “sinister drama”, bitcoin actually has plenty of legitimate and practical uses.
Get a domain name at Namecheap.com for your next big idea. Namecheap began accepting Bitcoin in July 2013 with “zero confirmations”, effectively spotting domain service ahead of block chain verification as a courtesy to their Bitcoin-spending customers.
There are also a number of VPS companies that now accept Bitcoin as well, like vultr.com who began accepting the crypo-currency in October of 2014. Now hosting for your new site will be an non-issue.
You can book a flight by buying a ticket on cheapair.com entirely in bitcoin. CheapAir also offers you the possibility to book for a hotel, entirely in Bitcoin.
Invest in a startup company or product on kickstarter.com by backing in bitcoin. Through their partnership with Stripe, Kickstarter began accepting Bitcoin as a payment method to fund all manner of interesting projects.
Try your luck and skill by trading your bitcoin in a Bitcoin exchange like cex.io which has been in operation since 2013 and offers sophisticated trading tools. Maybe you can out-smart the market and end up with more Bitcoins?
OpenBazaar is an open source, decentralized peer-to-peer marketplace that has the advantage of 0% fees and uses Bitcoin for transactions. By downloading the client at openbazaar.org you can participate in this experiment by shopping for products with Bitcoin and even open a store to sell items in the marketplace.
Finally, spendabit.co is a search engine that aims to index all products purchasable with bitcoin from smaller sized and large merchants. Spendabit currently lists over 2.5 million products from a pretty diverse set of merchants. With a clean interface style reminiscent of Google, you type in a product’s name and then browse through a list of results, many with thumbnail image. Clicking on a product in Spendabit, will direct you to the merchant’s website where the actual purchase in bitcoin occurs.
Despite all of the progress, Bitcoin has failed to make a major dent in the retail transaction market with fewer than 5,000 bitcoins spent per day at a value of just over 2 million dollars. Tim Swanson, Director of Market Research at R3CEV concluded in 2014 that “It appears there has been very little if any increase in retail purchases using Bitcoin”. Perhaps the overall drag in the retail transaction market is due to the friction in connecting buyers and sellers, as relatively few merchants actually accept Bitcoin for payment and it is not always obvious if they do.
So, what can you really do with a bitcoin? It turns out there’s quite a lot you can do, from going on a fancy vacation, snagging the next great domain name, nudging up your karma by donating and crowdfunding new inventions to shopping for just about anything you can think of on the web, and the list keeps growing.
Of course, if you’re a true believer in the Bitcoin revolution you can always put it under your pillow and watch it grow.