Buying Gold and Silver with Bitcoin
Since it was established in 2008, Bitcoin has provided consumers with another way to pay for various purchases. Although Bitcoin may not be considered “mainstream” at this point, the digital currency has gained significant popularity in recent years and is becoming accepted by more retailers and merchants.
Bitcoin may be attractive to users due to its convenience, increasing acceptance rate and low transaction fees. The Bitcoin network also eliminates the need for currency exchange rates and is quickly becoming a preferred method for sending money anywhere in the world.
Bitcoin can now even be used to purchase precious metals like gold and silver, and Silver.com is proud to accept the digital currency as a form of payment.
Getting Started with Bitcoin
There are a few simple steps that must be taken prior to completing a transaction using Bitcoin. The two key steps are to first obtain a “wallet” for your bitcoins and then to purchase bitcoins to add to your wallet. A Bitcoin wallet is like an electronic bank account. The wallet enables the user to send, receive or simply store bitcoins.
There are two types of Bitcoin wallet. The first is called a software wallet. This type is software that is installed on your computer or mobile device. The second type of wallet is known as a hosted wallet, or web wallet. These wallets are hosted by a third party and some may find them easier to use. (Obviously you will want to research providers and consider security and other issues).
Once your Bitcoin wallet has been properly set up, you will receive a Bitcoin address and a corresponding security key or password.
Once your wallet has been properly established, it’s time to fill it with some bitcoins. There are several ways you can obtain bitcoins which include purchasing, providing a service or receiving them as a form of payment. Bitcoins can be purchased through a reputable bitcoin exchange website, and you can compare associated fees between providers.
Bitcoins may take a few days to show up in your wallet, so please keep this in mind if you are looking to make a purchase using the digital currency.
Making your Purchase Using Bitcoins
Once the bitcoins you have purchased show up in your wallet, you can begin using them to transact. Not all precious metals dealers accept Bitcoin as a form of payment, so you will want to make sure your preferred dealer accepts the digital currency before proceeding.
Once you have verified that the dealer accepts Bitcoin, shop as you normally would. Add items that you would like to purchase to the shopping cart and proceed to checkout once you have finished. When it comes time to select payment method, simply choose the Bitcoin option and follow the instructions.
Once you have completed these steps, the dealer will produce an invoice with a Bitcoin address for you to send payment to. This address would be used in the field titled “recipient.” Below the payment address will be a box for specifying the payment amount. You may also be required to pay a transaction fee in addition to your purchase amount.
Once you have completed all fields and reviewed for accuracy, hit the send button to transmit payment. Then wait for receipt of funds confirmation. Keep in mind that payments made using bitcoins must clear numerous “blocks” before acceptance, and final clearance of payment may take up to an hour or so.
Why Use Bitcoin?
The primary advantage of using Bitcoin is convenience. Bitcoin is being accepted by more and more online retailers and merchants. This means you can shop whatever products you like, including precious metals, from online retailers that accept the digital currency. Bitcoins can be used for purchases right from the comfort of your own home or office.
Silver.com also offers a discount on purchases made using the digital currency in the same way that purchases made using a check or bank wire are discounted. This is due to the second primary advantage of using Bitcoin: Lower transaction fees.
Because Bitcoin carries lower transaction fees for merchants than PayPal or credit/debit cards, merchants are able to offer lower prices. In the case of precious metals, this equates to lower dealer premiums on coins, rounds and bars.
Bitcoin also eliminates the need for currency exchange rates. Because the value of bitcoins is not determined by a single government or central bank, the value of a bitcoin is the same anywhere in the world. This makes transacting across country or continental lines even easier, regardless of what is being bought or sold.
Bitcoin payments are also instant, so there is no need to wait several days for clearance like with a check. The Bitcoin network may sound complicated, but it’s really rather simple when broken down.
Potential Disadvantages of Bitcoin
Although Bitcoin has some distinct potential advantages, it does not come without some potential disadvantages as well. If privacy is extremely important to you, for example, then Bitcoin may not be the best method of payment. It is important to remember that when using Bitcoin, details of the transaction and address are permanently recorded on the Bitcoin network. Although a Bitcoin address may be considered anonymous, an address could potentially be tied to the identity of the user if the address if used with the holder’s identity in some way. The bottom line is this: The system is far from ‘airtight.” You should do your due diligence on the digital currency and potential privacy issues before using it.
Another major potential issue with Bitcoin is market volatility. The value of bitcoins has seen some wild fluctuations, and although many seem to feel that prices are likely to continue rising, there is simply no telling what prices may do in the future. If Bitcoin values see a sudden and significant decline, the bitcoins in your wallet could potentially not hold enough value to complete a desired purchase.
The future of the digital currency is also far from certain. If Bitcoin was one day rendered valueless or unusable, significant investor value could potentially be lost. There could potentially be government action to attempt to regulate or centralize the digital currency in some way, or there could be other potential legal issues that could drastically affect the viability of the digital currency.
All transactions made using the Bitcoin network are instant and irreversible. This means that Bitcoin could be sued as a vehicle for fraud. The security of your wallet is extremely important, as there essentially is little in the way of recourse for people who are hacked or have bitcoins stolen.
Until the system and network has proven reliable and becomes more “mainstream,” it may be best to only fill your wallet with money for immediate purchases and to only use small or incremental amounts to help minimize risk of theft or loss.
Bitcoin has taken the world by storm, and has seen a sharp rise in its value in a relatively short period of time. Due to the digital currency’s success, other forms of cryptocurrency have also begun gaining some momentum. Dogecoin is another form of peer-to-peer digital currency that is decentralized. One of the most popular uses of Dogecoin is for “tipping” other internet users for posting great content.
Litecoin is another form of peer-to-peer digital currency that is decentralized and uses blockchain technology.
As the overall appeal of these digital currencies grows, more and more networks are likely to be created. The age of digital currency could be just in its infancy, and these monetary networks could potentially one day become the preferred method of making and receiving payments for individuals and merchants alike.
Buying Other Metals using Bitcoin
In addition to purchasing physical gold and silver, investors can also utilize Bitcoin to purchase other metals as well. Platinum and palladium can both also be purchased using bitcoins, and offer the same dealer discount for using the digital currency. If you are interested in base metals, you can purchase copper rounds or bars using the Bitcoin network as well.
One of the easiest ways to get started using Bitcoin is to start small with a single purchase. As you make more purchases using bitcoins, you will become comfortable with the process and may decide Bitcoin is your preferred method of payment. Due to the fact Bitcoin and other digital currencies may become more and more widely accepted and more “mainstream,” it may be a good time to become familiar with the digital currency. Some of the keys to keep in mind when getting started are:
● Research different wallet providers
● Research different vendors for purchasing bitcoins
● Research potential security issues
● Keep in mind the fact that the value of bitcoins has the potential for significant fluctuations
● Only keep small amounts of money in your wallet
Used properly and with the appropriate precautions, Bitcoin and other digital currencies may provide an extremely convenient and inexpensive alternative to credit cards and other payment methods. This technology is likely to grow at a rapid pace, and before long you could be buying your morning latte with bitcoins instead of cash.