With the passage of time and the evolution of technology around the world, one of the key tasks such as paying bills has also become digitized and fairly easy to perform. The introduction of digital currencies worldwide has tailored different services to utilize technology in order to process transactions.
Today, people can easily pay their due bills using their smartphones or computers either through traditional currencies in digital format or cryptocurrencies which are fully digital.
Talking a bit about the history of Bitcoin, its founder and creator, Satoshi Nakamoto had managed to give birth to a decentralized digital currency referring it to as a “peer-to-peer electronic” money.
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With regards to the white paper of Bitcoin, any payments done through computerized system would allow people to directly send currency without having the need to utilize a service or a bank. It was electronic money that allowed full control to the user.
In the past, the process of conducting a transaction using cryptocurrencies was quite complex, as users had to do a lot of the programming themselves, however things have gotten way easier and simpler now, as more utilities like wallets and services have arrived.
If a person wants to use cryptocurrencies to pay their bills, then they must have to either transfer the amount directly using their digital wallet or they can use a payment service that serves as a middleman to process their bills.
Keeping that in mind, Bitcoin can not only be used to make more money through investments, but can also be used as a utility, such as paying for things like food, groceries or any other type of service. There are many different types of cryptocurrencies, they can all be used to pay for services, however that depends upon the service and their support respectively.
Now that we have a clear background about this matter, we can dive deeper and learn how these cryptocurrencies can be utilized to make payments for services.
Paying with Cryptocurrencies
Before you can start, you will firstly need to get your hands on cryptocurrencies. There are many different cryptocurrency exchanges like Coinbase, Binance, KuCoin, Kraken and many others that can be utilized to gain cryptocurrencies. These exchanges give users the ability to exchange their traditional currencies to the equivalent value of cryptocurrencies.
Keep in mind that it may not be possible for you to buy a complete coin, as they can cost a lot. Not long ago, Bitcoin managed to reach a price valuation of more than $60,000. This might seem too high for many, but thing is that these currencies can be bought in portions, so you will only be provided with Bitcoin that is equivalent to the amount you purchased it for.
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Another thing to note is that it is not necessary to use a cryptocurrency exchange if you are concerned with your privacy as cryptocurrency can also be transferred directly from wallet to wallet, so a digital wallet will definitely need to be used.
As for wallets, there are many types, some can be in soft form or even hard form. Wallets come with a private key and a public key that lets users to use the wallet. These keys must be protected and remembered at all costs, so that you do not lose your assets.
Many popular wallets are available through browser extensions and offer different incentives and rewards for using them. Public wallets offered by exchanges are also an option to consider, but since they are non-custodial wallets, the assets are handled by the exchange, meaning that you do not have full control over your assets.
Just make sure that the wallet type and service you are using is compatible with the cryptocurrency you are eyeing on and respects your privacy regarding asset custody.
After you have successfully done the above, you must also check if the service you are paying for has support for the cryptocurrencies you are interested in. With the advancement of blockchain technology, thousands of popular businesses have begun supporting cryptocurrencies for payments and have regarded it as a legit payment method.
Taking the example of trading giant Amazon, they are also accepting cryptocurrencies such as Bitcoin and Ethereum now.
Paying using a wallet is generally very easy. If you want to perform a transfer, simply open the wallet service, available through an application or browser extension, select the “Send” option, after that proceed by entering how much you are transferring and to whom you are transferring in the respective fields given. The recipient will either provide a QR code or a wallet address.
Then just press the “Send” button and the transaction will be complete. Transactions usually take less than seconds to process, however that depends upon the blockchain network you use. Some have extremely quick processing speed, while others take a bit of time. The process is almost same for receiving any payments.
Businesses usually have to utilize cryptocurrency payment handlers like BitPay so that they can start accepting cryptocurrency payments from their customers, but if the business supports direct wallet transfer, then that is the best-case scenario for both sides.
Types of Bills Applicable
As of now, people can utilize cryptocurrencies to pay for many different services such as mortgage, rent, telephone bills, power bills, internet bills, water bills etc. Payment services like BitPay also allow their users to create crypto-based debit cards that basically turns their cryptocurrency into the equivalent amount of fiat currency so that the respective bills can be paid.
This is because some banks are still having issues with cryptocurrencies, so instead of directly using cryptocurrencies, the credit can be changed to the supported currency.
Other businesses such as the popular mobile company AT&T have support for direct crypto transfer, so they do not have any issues.
Following the bandwagon are many different gyms, loaning services, household billing companies, restaurants and credit card services that have begun supporting popular cryptocurrencies like Bitcoin and Ethereum, either through a direct crypto wallet transfer or through a cryptocurrency debit card. More on this in the next sections.
Pledging to pay your bills via cryptocurrencies also requires you to check if your country has primary support for cryptocurrencies or not. If your country supports cryptocurrencies, then it means that it is deemed as legal tender, making it a legit payment option for the residents.
Taking the example of countries like Switzerland El-Salvador, they have regarded cryptocurrencies as legal tender which means that their people can easily and openly use cryptocurrencies to make payments.
Meanwhile other countries like China have completely revolted against the use of cryptocurrencies, as they are promoting their own type of digital currency, disabling the people from using cryptocurrencies of any form.
Due to this, many major cryptocurrency operations and exchanges in China have been forced to either completely shut down or switch locations, as the laws against cryptocurrency have been strictly implemented by respective authorities.
Paying Through Bitcoin
Bitcoin is still having the highest current valuation of all cryptocurrencies so it is pretty obvious that many popular businesses around the world would choose to support it.
Major companies such as Microsoft, Shopify, Virgin Airlines, Travala and tons of other businesses are now accepting Bitcoin. Looking at the example of Microsoft, the company allows its users to buy XBOX gift cards through their online store, having support for many different Bitcoin payment services.
We will now discuss a bit more about the different types of payment options that are associated with Bitcoin cryptocurrency and can be used to perform Bitcoin supported transactions.
- Bitcoin-based Debit Cards
As mentioned previously, different baking services allow users to create a Bitcoin powered debit card that have support for cryptocurrencies and can be used to make bill transactions.
The hugely popular VISA and MasterCard also have support for cryptocurrency-based cards, making it a reliable option for many new to the scene, because those people are already familiar with those two in regard to traditional money.
The Bitcoin debit card turns cryptocurrency into the supported traditional currency that is required to complete the purchase. The Bitcoin debit card also allows users to make withdrawals through supported ATMs which also turns the equivalent amount of Bitcoin into the traditional currency.
In order to get your hands on one, you will have to register with a supported service like an exchange that makes these types of cards and also a digital wallet service.
For security and privacy reasons, users looking to create Bitcoin cards, have to go through the Know Your Customer (KYC) policy and verification, so that they are subject to the Anti-money Laundering (AML) regulations placed by respective authorities that are meant tackle criminal activity in the financial space.
Because services like VISA and MasterCard are in support of cryptocurrencies, their cards can be utilized to make online and physical payments. This makes its very easy for users to utilize their crypto assets in order to pay for things, just like paying with traditional money.
This adds a completely new level of flexibility when it comes to paying for simple things, making life much more trivial for those having busy schedules.
In addition, the cards allowing users to store both crypto and traditional digital currency have a small fee for currency conversion. As good looking as these kinds of services may seem, there are certain risks that are associated with them which we will discuss in the sections below.
- Bitcoin-based Payment Services
Alongside Debit Cards, come services such as Coinsfer that let users to transfer Bitcoin to them so that they can handle their payments, acting as a middleman. Coinsfer is a payment merchant located in America that handles user payments like different subscriptions, utilities and items for them.
How the service works is that if a user needs to pay for something, they are required to mention it to Coinsfer, then the service basically calculates all of the different charges and displays a grand total amount for users to see. Once the users transfer the Bitcoin, Coinsfer is then able to handle their payment.
- Straight Bitcoin Transfer
If you are browsing the web or a physical store for any items or services, you can check if they have support for Bitcoin payments or not. If yes, then users can pay them directly without having the need to go through any currency swaps that often carry extra fee.
Paying directly is also faster, because the middleman is removed, and the payment is directly transferred among the entities, allowing for a much simpler and speedy process.
In the USA, there are many regions where cryptocurrencies have managed to gain so much popularity that they have also become viable for paying official taxes.
As mentioned before, countries like El Salvador have allowed this, so business like Pizza Hut, McDonald’s and Starbucks were forced to implement Bitcoin payment systems for their customers to enjoy.
Perks of Paying Bills with Cryptocurrencies
One of the main advantages behind the usage of cryptocurrencies is that they can be privately used without the government having any eyes to monitor.
This may seem to trigger many questions regarding security, but the good thing is that any transaction made can be easily tracked on the blockchain and any movement of assets can be checked if the relevant authorities require it.
Information regarding the transaction such as wallet addresses and exchanges can be easily known and since the blockchain technology is practically un-hackable, it is very safe to use.
Another advantage is that payments can be made straight forward without having the need for a middleman service, due to the nature of peer-to-peer technology.
Furthermore, transactions can be conducted from practically anywhere around the world, as long as you have access to a secure and active internet connection.
The people living a low-income life can benefit the most from this, as they do not have to deal with any extra fees that are associated with banking services. Direct transfers have allowed many hard-working people to send payments across borders to their loved ones easily and effectively, making banking a lot more trivial and cheaper than every before.
Cons Associated with Cryptocurrency Payments
As we all know, not everything is perfect. Alongside the many different advantages associated with the use of cryptocurrency for payments, there are a number of concerns that must be kept in mind before joining the crypto space.
When it comes to paying bills, many blockchain networks like Bitcoin and Ethereum carry certain fee for processing, especially when it comes to cross-chain transfers, so the extra fee comes into play.
Additionally, there are several countries around the world that lack regulatory rules for cryptocurrencies which indicates that if there is a loss of value or something bad happens, then there are no rules or actions present, making the loss permanent.
As of now, organizations such as the United States Securities and Exchange Commission is still having issues with regulations issues with many different crypto-based entities and the overall space, making things difficult for many.
Furthermore, the cryptocurrency market is still quite volatile which leads to many cryptocurrencies often having significant sudden changes in price valuations. A drop in price might make things easy but an increase in price can have equal or even higher consequences which any user needs to take into consideration.
As mentioned before, with regards to wallets, they come with private and public keys that are only associated to those accounts, meaning that if you manage to lose the private key, then it is practically game over and you cannot recover your assets.
However, if you lose your public key, then the assets can still be recovered, but the private key must still be known for that to be possible.
Lastly, if a transaction has been performed on the blockchain, it is final and permanent, because the activity is stored in the blockchain forever.
However, in the case of an error, it is possible that the transfer might have not processed. Due to the secure nature of blockchain technology, it is vital that users understand why it is so important to keep it secure, so that any unwanted activity does not take place.
In conclusion, cryptocurrencies bring a very new and unique way of paying for different kinds of services and items.
The advantages that come with the use of cryptocurrencies for payments heavily outweigh the number of cons associated, making them quite a viable payment option for many users around the world, looking to get rid of themselves of different banking services that have unnecessary terms and conditions that make payment difficult.
Although there are some issues with cryptocurrencies, but they do not have a significant impact on the overall process. Direct cryptocurrency payments not only make them cheaper, eliminating any unnecessary fees, but also helps processing them much faster, compared to traditional services, bringing a lot of utility for those with minimal earnings.
And with the security and transparency of blockchain technology, there is no question about the safety of using the tools to pay with crypto.