What is bitcoin used for in 2017?
Bitcoin has been all the rage lately. You hear it everywhere – from the news to your friends, or even from your family members. You might know it’s a digital currency, or that it’s expensive. But really what the heck is Bitcoin used for on a practical level? As of September 2017, Bitcoin’s value rose 500% to $5,000 USD (from $1,000 USD on Jan 2017). Other than hearing about the price, do you actually know what it can be used for? Below are 5 of the main practical uses for Bitcoin (current as of September 2017):
Cool fact – Did you know that there are only 21 million bitcoins in existence, ever? It’s modeled after finite physical resources like gold.
As an Investment Vehicle
This is perhaps the most commonly discussed use of Bitcoin. If you had bought $2,500 dollars worth of Bitcoin 5 years ago, you’d be a millionaire by now. The price of Bitcoin has been growing dramatically, and the meteoric rise of Bitcoin isn’t without a lot of volatility. However, investor demand for Bitcoin has been insatiable, with demand coming from all over the world, including Asian countries.
Make no mistake, Bitcoin is a very volatile investment, and if you don’t have the stomach for the ups and downs, then investing in Bitcoin isn’t really for you.
If you don’t have an account but want to start investment/buying, check out Coinbase. They will even give you a $10 USD bonus in bitcoin if you initially deposit $100!
As a medium to buying other cryptocurrencies / coin offerings
Did you know that there are over 1400 cryptocurrencies and digital coins as of September 2017? The cryptocurrency space has been taking off and even though these currencies exists, chances are you can’t buy them with Fiat currencies such as the USD. Most of the coins are being sold on exchanges such as Poloniex and Kraken (for a more in depth review, click here). What’s interesting is that you can’t buy these other crypto currencies directly. Rather, you need bitcoin to exchange for them. For Initial Coin Offerings (ICOs), you need to have Ethereum to participate. While you can buy Ethereum (another popular cryptocurrency), a lot of people will exchange Bitcoin for Ethereum, then use Ethereum to participate in these ICOs.
Did you know? The smallest denomination of a Bitcoin is 1/1,000,000 of a coin (1μBTC)!
To pay your credit card (sorry, only for Canadians)
If you live in Canada, then consider yourself lucky. There is a service online called Yes to Bitcoin that lets you convert Bitcoin assets to pay off your credit card bills. The service will take your Bitcoin (and add a 5% surcharge) and pay your credit card. Now you might be asking, why can’t I just sell my Bitcoin for money and use the money to pay off my credit card? The problem with this approach is that the government will treat any capital gains from selling Bitcoin as taxable income. So to avoid any possible tax implications, it’s preferable to use a service like this. For more information about tax implications, see this post.
For online / sports gaming
Traditional online gaming has been on the Internet for a while now. However, one advantage of using Bitcoin for online gaming and sports gaming is that you can save a lot of money on credit card transaction fees. Many credit card companies add surcharges when paying for online gaming transactions. It also isn’t easy to withdraw from these traditional online sites as they usually take a long time to process withdrawals (as they send you a check in the mail). Furthermore, you have to provide proof of identity, usually with a photo ID and/or passport and/or credit card number. If these traditional sites get hacked, the hackers will likely take your identification information. With Bitcoin, those problems don’t exist. You simply provide a wallet address to withdraw the money to. Any winnings will be transferred back to your wallet instantly and you will usually receive your payout within an hour. One such reputable service is call Betcoin.ag. They accept not just Bitcoin, but also Litecoin, Ethereum, and many others.
We hope this has piqued your interest in the world of Bitcoin and cryptocurrencies. As you can see, there are many practical uses for Bitcoin and as its popularity grows, its uses in the real world will only increase as well. There are already many online retailers that accept Bitcoin and other cryptocurrencies which we cover in our article Online Retailers That Accept Bitcoin. Before long, you’ll probably be able to pay in person for your favorite Frappucino at Starbucks with your Bitcoin wallet. Cryptocurrencies are here to stay and we’re excited to see how it evolves and changes the world of payments!