CryptoRefills takes us through all the different ways that we can use Bitcoin in our everyday lives.
Is it possible to shop for everyday needs with Bitcoin? The answer is yes. There are many options to use Bitcoin to buy products and services from the most popular brands and retailers, both online and offline.
In this guide, we will list the major stores currently accepting Bitcoin, explain workarounds to shop in almost any store that currently doesn’t accept Bitcoin and describe how this blockchain payment process works.
Join us in showcasing the cryptocurrency revolution, one newsletter at a time. Subscribe now to get daily news and market updates right to your inbox, along with our millions of other subscribers (that’s right, millions love us!) — what are you waiting for?
Bitcoin as a Means of Payment
What Can You Buy With Bitcoin?
Although most online and offline retail stores still don’t accept Bitcoin as a payment method, there are a surprising number of businesses that have set up payment systems that do offer their customers a Bitcoin payment option.
Here are some of the places you can spend your Bitcoin. This is only a partial list, as Bitcoin and cryptocurrency grows in popularity, more businesses will start experimenting with cryptocurrency payments.
Overstock - one of the biggest retailers for common household items with a wide selection of products accepts Bitcoin payments.
Home Depot - the large home improvement chain in the United States lets you pay with Bitcoin.
NewEgg - the electronic retail giant can take your Bitcoin for a wide range of products.
- Tesla - the company offered Bitcoin payments back in March, although it declared recently that it would stop the option to pay with Bitcoin because of its environmental impact.
Marketplaces for cars - there are several car dealerships such as BitCars and AutoCoinCars which take your payment in Bitcoin.
KFC - fried chicken chain accepted Bitcoin in their locations in Canada back in 2018.
Just Eat - food delivery service allows Bitcoin as a valid payment method in France.
Travala - the crypto-friendly travel booking platform lets you book your holidays, meaning you can pay for a hotel or book a flight using Bitcoin.
Expedia - one of the largest online travel booking agencies in the world allows you to pay for millions of destinations worldwide with Bitcoin.
Wikimedia Foundation - the nonprofit organization that runs Wikipedia accepts donations in Bitcoin.
How to Use Bitcoin If Your Store Doesn’t Accept Crypto
It is difficult to use Bitcoin for your everyday shopping needs if retailers don't accept Bitcoin directly. You would have to convert your Bitcoin to fiat, and then send it to your bank account to cash it out in order to pay the retailer with fiat. This can be time consuming and costly due to cash out limits, exchange fees and transfer times.
Many gift cards can also be used in physical stores and retailers such as supermarkets, gas stations, clothing and sports stores, restaurants and food chains. Technically, by using gift cards, you can buy almost anything you need with Bitcoin. You can then redeem these gift cards at the time of your purchase at these retailers.
How Do Bitcoin Purchases Work?
Paying with Bitcoin for products and services is as simple as sending an email to someone. An online store that accepts crypto payments will not ask you for your credit/debit card information.
If you are paying from a wallet (not from an exchange) you will also be asked to set the fees for the transaction. These fees don’t go to the store: instead, these fees go to the miners to reward them for processing the payment and keeping the integrity of the Bitcoin blockchain intact.
Once the transaction has enough confirmations on the blockchain that guarantee that the funds have been securely transferred to the store’s address, the payment is complete. It can take a few minutes and, in some extreme cases, even some hours for the transaction to be confirmed on the Bitcoin blockchain. This is due to how the Bitcoin blockchain works: the higher the fees you pay, the faster the transaction can be processed.
If you are concerned about privacy, Bitcoin is a good option because you don’t need to give up personal financial information like bank or credit card data. If you are buying digital items or services, your email or mobile number will usually be sufficient to complete the purchase, while for physical products online, you will likely have to provide a name and address where you can receive the goods. If you are using Bitcoin inside a store, it is anonymous, just like cash.
Disadvantages of Paying With Bitcoin — and Possible Solutions
Despite the many advantages of being able to shop with Bitcoin, there are still some issues that likely prevent users from much stronger adoption, especially when it comes to day-to-day shopping.
The main issues users face when buying goods and services with Bitcoin are mainly:
High transaction fees;
Slow transaction processing;
Exchange rate volatility.
Points 1 and 2 are strictly interlinked and we will look at them together.
As said above, Bitcoin payments require you to pay a fee to the miners to process the transaction. The fee to be paid is based on different factors such as the market value of Bitcoin and the Bitcoin network’s congestion.
The higher the fee, the faster the payment will go through. It is important to understand that this fee is not in any way linked to the amount that is being transferred. In other words, whether you are buying 10 dollars’ worth of mobile credit or a shiny Lamborghini, if you pay in Bitcoin, your processing fees will be the same.
The perception of fees varies depending on what you are buying. 10 U.S. dollars of fees might sound reasonable if you buy a $1,000 smartphone (the fee is 1%), but we can agree that paying 10 dollars in fees for a $20 of PlayStation credit is expensive.
The chart below compares the fees paid by CryptoRefills users between November 2020 and January 2021 in relation to the price of the goods and services they were purchasing. The three snapshots provided are based on the mempool size (the number of transactions awaiting verifications and confirmation).
According to this chart, the average (median to be precise) Bitcoin fees paid by shoppers in relation to the value of what they were buying was about 1.6% on the day the mempool was the lowest, and 27% when the mempool was the highest.
In some extreme cases, users paid more in fees than for the product itself. These are rare exceptions that occur for people buying products worth a few dollars.
The bottom line is that a direct Bitcoin payment can be very expensive and inconvenient if you are making a small purchase, and especially if you want the transaction to be processed immediately.
Possible solutions to the fee and speed issue are to use other cryptocurrencies such as Dash and Litecoin, which have much lower fees than Bitcoin. You can also consider paying directly from an exchange because they group many transactions together, so the fees will be cheaper. If you are still eager to pay with Bitcoin from your wallet, you should consider using Lightning Network (more about that later).
Between January 2021 and August 2021, Bitcoin was as low as $29,374 and as high as $63,503, compared to the U.S. dollar. This means that if as a consumer you wanted to purchase 100 U.S. dollars’ worth of goods on Amazon with Bitcoin, you would have paid 0.0034 Bitcoin on 01/01/2021 and 0.00157 on 04/13/2021.
Furthermore, Bitcoin price changes can be sudden, with two-digit appreciation or depreciation over the USD that can happen in minutes. Imagine shopping at your local store with a fiat currency and seeing the prices make huge bounces up and down.
Paying With Bitcoin Using Lightning Network
The Lightning Network is a “second layer” payment protocol for fast and scalable payments. Put simply, it allows users to complete the payments immediately, and with close to zero fees.
In order to pay with Bitcoin using Lightning Network, you will need a Lightning Network enabled wallet like Éclair, Breeze or the Wallet of Satoshi. You will also need to open a “Lightning Channel” to transact with the store. New generation Lightning wallets like Phoenix might be more user friendly for the less expert users.
Bitcoin adoption as a payment method (its original intention) is increasing despite its price volatility. Businesses like PayPal and Overstock are paving the way in this direction by accepting Bitcoin directly.
It seems we still have a long way to go for full retail adoption of this payment method. However, since most top brands in the world offer gift cards, it is possible to use services like CryptoRefills to use Bitcoin to buy gift cards and then redeem the gift card for the payment.
Purchasing products with Bitcoin still presents some challenges. Transaction fees paid to miners and time to process the transaction are the top two issues.
However different solutions are emerging, such as using other widely accepted cryptos or paying with Bitcoin via the Lightning Network. Exchange rate volatility can also be an issue. Stablecoins such as USDT, USDC, and DAI can be a solution to exchange volatility, but it is important to consider ERC-20 token fees when transacting over the Ethereum network.
Crypto-funded debit cards and credit cards are also an option to reduce fees, complete transactions immediately and reduce exposure to exchange rates. However, these cards are usually only available to people who have access to the traditional banking and financial system.
According to different research, there are about two billion people in the world unbanked. This is a problem that Bitcoin, in the form of a peer-to-peer exchange, actually addresses, since many unbanked people have access at least to the internet and mobile phones.
As Bitcoin and cryptocurrencies grow in popularity, we believe there will be more businesses that will start accepting Bitcoin and experimenting with cryptocurrency for payments.