Without doubt, Bitcoin is a hugely disruptive force within the financial services sector. However, although many potential users may have an awareness of the innovations behind cryptocurrencies, the real-world feasibility of Bitcoin in everyday scenarios is little known by the average consumer.
From gaining an in-store presence on the high street to emerging as an online payment alternative, Bitcoin is accepted in more places than you might expect.
However, from the unique constraints as you make your online purchases and transfer times that the average consumer may not expect, Bitcoin may not yet be a complete replacement to fiat currency for everyday use cases, but its temporary issues could be a worthwhile compromise for advantages just around the corner.
Digging beneath the surface
When Bitcoin entered the scene in 2009, the concept could not have been more appealing: based on a new self-regulating blockchain ledger, the bureaucracy of centralised banking was no more.
However, this new form of currency is not without challenges of its own. On the one hand, the same benefit of decentralisation that removes central manipulation and unnecessary bureaucracy from the capital-raising process may introduce the same dilemma it seeks to address. As ICOs for investment and start-up applications lack the same regulatory oversight as traditional IPOs, the line between token and equity share is blurred. On the other hand, despite the potential risks for large-scale, crypto-based crowding, its unprecedented growth in value since 2015 makes this oversight and its known volatility a small price to pay for consumers simply seeking a second option. So where can you buy with Bitcoin?
Can I make everyday purchases with Bitcoin?
In practical terms, Bitcoin stands as a strong ‘plan B’ currency for the everyday user. From small purchases at your local shop to purchases online, the concept of a rapidly growing currency for low-risk, everyday purchases appears tempting on the surface.
As we take a look at the real-world acceptance of Bitcoin in 2018, although this promising alternative has yet to fully achieve such market demand, more online payment gateways and store brands are beginning to accept it than you might expect. So, in short, the answer is yes, you can buy with Bitcoin; but you will need to know where to look.
Currently, you can use Bitcoin to make online purchases using select payment gateways, and also in select stores in both the UK and the United States. However, as we take a look at the options currently available to users, it appears that the ‘how’ might be just as important as the ‘where.’
Can I buy with Bitcoin online: It’s about the when, not just the where
From being introduced as a futuristic payment alternative for blockchain enthusiasts in 2009, a variety of large online stores have allowed shoppers to buy with Bitcoin as a payment alternative. This is not only a sign that payment gateways incorporating it have matured technologically but, as Andreas Antonopoulos suggests, it indicates that Bitcoin is increasingly becoming a trusted alternative by their everyday consumers.
“On the one hand, increased adoption by mainstream brands does speak a lot to how the technology behind payment gateways and Bitcoin has matured in their reliability since 2010, but more importantly indicates that official brands are beginning to trust this payment technology to their existing customers.”
– Andreas Antonopoulos, tech entrepreneur and Bitcoin advocate
Furthermore, with gift card purchase solutions such as Gyft and eGifter, Bitcoin is becoming recognised for a broad range of trusted payment scenarios, but these same payment gateways are yet to filter down to the larger consumer brands in countries like the UK as they have in the United States.
Although this technology has been embraced by US brands such as Dunkin’ Donuts and Best Buy, this cannot be said about their counterparts in the UK. As with any new payment technology, we expect other major players to catch on eventually; and once they do, awareness and adoption is an upward spiral from there.
But, according to Sheba Karamat, this difference in availability of Bitcoin for merchants between the US and the UK might not be a question of compatibility and awareness, but instead an anticipation of real-life consumer behaviour:
“Ultimately, we all recognise that widespread adoption of an online technology or payment method developed in the United States does take time to cross over to the United Kingdom, but the difference in Bitcoin adoption for online merchants may be more an anticipation of consumer behaviour. Online buyers are impatient, which may mean – for select purchase scenarios – the 10-minute window to beat the exchange rate and make your Bitcoin purchase might not cut the mustard. However, for less time-constrained purchases, the buyer may lean towards Bitcoin’s unique advantages.”
– Sheba Karamat, Chief Executive Officer, Coin Rivet
Therefore, when considering how broadly accepted Bitcoin may be by online stores for your everyday purchases, these time limitations and constraints may still lead many consumers to revert back to traditional payment options.
Bitcoin enters the store: Speedy scan, speedy purchase?
Despite the relatively widespread availability of Bitcoin online, this same availability has yet to reach many of the offline stores of these same brands and organisations. However, many of these brands in the UK have begun to slowly incorporate Bitcoin payments into their online customer experience; sufficient demand online should eventually carry over to in-store environments .
Yet, although the number of stores accepting Bitcoin may be sparse, the technology is relatively simple to integrate. Mobile apps can be used for the scanning of QR codes and wallet keys, which can save time and energy for both the consumer and the store owner when making payments. This kind of transaction is also arguably more secure than smartphone-enabled contactless payments. However, there is one dilemma that remains: transfer time.
Take purchasing a car: when making a payment in this scenario, a potentially longer transfer time may just be the same as if you had chosen to pay by the time your delivered car arrives. However, when we picture crowded customers rushing towards the Starbucks counter, time is no longer a luxury for the average consumer.
For Bitcoin, this is still a barrier: the process is not slow, it’s just not as instantaneous as using standard fiat combined with contactless payment. This means that, whilst scanning your QR code may be lightning fast, the actual transfer of your cryptocurrency may be a different story.
Time for change
When we consider the overall compatibility of Bitcoin as an alternative for everyday purchases and the opportunity to buy with Bitcoin, both adoption and availability have increased significantly since the technology first entered the scene in 2009. Moreover, given that consumers are also reported to factor in their preferred choice of payment method when considering an online store or provider, you could argue that Bitcoin is available for the majority of basic purchase categories.
As we observe a rapidly changing landscape, there are still several details and barriers that may deter certain purchase scenarios: whether rushed coffee-buyers or vendors looking to carefully contemplate throughout the payment process, the limited purchase window and transfer duration is still a barrier to wider adoption.
However, when considering these factors, the initial signs of future widespread adoption may be right at our doorstep. As larger brands are incorporating it into their online payment gateways in spite of serving predominantly fast-purchase buyers, this might well position Bitcoin as a true contender to conventional payment methods.
Sources
Jamali, R. (2016). Cryptocurrency: digital asset class of the future – Bitcoin vs Ethereum?. The economist | kraken bitcoin exchange.
Müller, M. (2017). CIO Insights Reflections: Cryptocurrencies and blockchains – their importance in the future. Deutche Bank.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.