Bitcoin is the phenomenal and pioneering virtual currency that was created by an anonymous entity that goes by the name Satoshi Nakamoto in 2009. Bitcoin is a kind of cryptocurrency that is already used by around 11.5 million people globally to transfer money from one person to another securely. Bitcoin users usually purchase various goods and services over the internet.
Simply put, here are the steps on how to use Bitcoins to make a purchase.
- Create a wallet. A Bitcoin wallet is an online tracker of bitcoins that a person owns. Through this wallet, one can receive, store, and send bitcoins for transactions. There are four categories for wallets:
- Software wallet: also known as hot wallets, these are downloaded from a software provider and installed on a personal computer or mobile device
- Web-based wallet: also known as web wallets, these are similar in design and content to the software wallet but is hosted on the web by a third party.
- Paper wallet: a paper print out of the Bitcoin access keys that a wallet owner keeps offline.
- Hardware wallet: similar in concept to a USB device and has to be plugged into a computer when making a transaction
- Get Bitcoins. Bitcoins can be acquired either of the following ways:
Payment for product or service from another person
Purchase from Bitcoin exchanges
3. Shop Online. Surf the internet for products, services, shops, and other online stores. Make sure to check if it is legal to use Bitcoin in both the countries of origin of the product or service.
4. Make a payment. Transactions are made through the Bitcoin wallet. It is a simple cut and paste procedure of entering the amount to the specific public key of the merchant.
The use of Bitcoins is challenging the existing paradigms on the concept of money. Using Bitcoin is easy and promises to be more secure than existing monetary systems. Barely ten years old, Bitcoin is quickly transforming how people deal and work with the concept of money in this digital age.
While there are surely pros and cons to this phenomenon, only time will be able to tell whether this new concept will be accepted as a new monetary medium by the majority of the people who make transactions online.