How Do Bitcoin Debit Cards Work, and Is it Easy to Use in Daily Life?
You may be wondering what Bitcoin debit cards are. But first things first, let’s start from the beginning. Bitcoin is a massive technological innovation that helped spark interest in cryptocurrencies and brings blockchain technology to consumers across the globe.
From its historic highs of $20,000 per coin to its lows of $900, Bitcoin has been a unique investment opportunity for savvy crypto experts and the building block for thousands of cryptocurrency copycats. But, it’s always had a utilization problem. People don’t buy Bitcoin to spend it; they buy it to invest.
Research shows that only around 1% of Bitcoin transactions are for merchant payments. The vast majority of Bitcoin transactions are based solely on-exchange trading. Since Bitcoin isn’t backed by any government and its value is particularly volatile, using Bitcoin for payment is unfeasible for many consumers.
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How Bitcoin Debit Cards Work?
Here’s how Bitcoin debit cards work. First, you’ll need to open a Bitcoin wallet. Connect your Bitcoin debit card to your Bitcoin wallet. Then, you can use your credit card anywhere that networks cards are accepted. For example, if you have a Visa Bitcoin debit card, you can use it anywhere Visa credit and debit cards are accepted. Backed by a major processing network would give purchases the same zero fraud liability as regular credit card purchases when the card is used as credit.
There may be fees associated with Bitcoin debit cards similar to what you’d pay with a prepaid card. For example, you may pay withdrawal, transaction, or monthly account fees with a Bitcoin debit card. Keep in mind also, that since the price of Bitcoin fluctuates, the amount of Bitcoin needed to complete a transaction can fluctuate, even within a single day.
It’s important to keep track of the amount of currency you have in your Bitcoin wallet in Bitcoin and U.S. Dollars, so you know whether you have enough to complete the transaction. Carrying a backup payment method is a good idea as well in case the merchant doesn’t accept Bitcoin debit card, or you don’t have enough funds to complete your transaction.
Unfortunately, Bitcoin debit cards may be shortlived. Earlier in 2018, Visa told BitPay, one of the most popular Bitcoin debit card to close its accounts. Other crypto debit card cards have also closed and are returning funds to consumers. Bitcoin debit and credit cards available in other countries may not be available in the United States. Finding a Bitcoin debit card may be more difficult, especially considering the Bitcoin is currently unregulated by Federal agencies.
Here is the standard Bitcoin debit card utilization flow:-
- You create a Bitcoin wallet.
- You buy Bitcoin from your preferred exchange.
- Next, you apply for a Bitcoin debit card.
- Once you’re approved, you will connect your Bitcoin wallet to the application or desktop interface that your Bitcoin debit card service provides.
- Then, you will use your Bitcoin wallet to fund your prepaid card.
- Finally, after fees are applied, your prepaid card will instantly be topped up with fiat currency like USD or Euros.
- You can now use your prepaid card wherever credit cards are accepted!
There are two distinct types of Bitcoin debit cards:-
Physical cards are for use both online and in-store at any retailer, restaurant, or any other merchant that accepts credit card transactions. Virtual cards only give you a credit card number and security pin, and they are only for use online.
Where Can You Get a Bitcoin Debit Card?
Applying for a Bitcoin debit card is similar to applying for other credit cards. The primary differences are that Bitcoin debit cards typically do not leverage your credit history (since they are prepaid) and Bitcoin credit cards will require your Bitcoin wallet information.
There are also fees to take into account. Each Bitcoin debit card provider will have a unique fee structure. And, you should always shop around for the best possible deal. You should also think about app availability. Some Bitcoin debit cards have apps, while others do not. If you want the option to top-off your card on-the-go, you should look for one that provides a functional app that’s compatible with your smartphone’s operating system.
Bitcoin Debit Cards Safe-to-use?
Yes! Like regular debit cards, Bitcoin debit cards are safe-to-use. Make sure that you are using a reputable card issuer since you will be linking to your Wallet. Also, it’s vital that you carefully read all Terms of Service and pay attention to all of the small fees associated with use.
If you’re looking to find a way to spend your Bitcoin, then Bitcoin debit cards may be a fantastic option for you. Once you buy Bitcoin, it can seem intimidating trying to spend it. With volatile market shifts and constant bear and bull runs, Bitcoin can feel more like an investment than a currency. But, with new services like Bitcoin ATMs, debit cards, and instant exchanges popping up, spending your coins has never been easier.
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