Bitcoin was designed to be a type of online virtual currency. As such, its place is supposed to rival that of the fiat, or cash markets. For example, when you go to a game room, you may have to purchase tokens in order to play the games. Those tokens are, for that game room, the equivalent of bitcoin on the Internet: they are all a store of value and a way to transfer wealth.
The difference here comes in the fact that while the tokens can only be used at a certain game room, bitcoin can be accepted by any merchant that is willing to do so. The result of this is an immense market that is growing by the day. Some examples of great businesses that accept bitcoin are as follows:
- Newegg – this is a site that just recently started accepting bitcoin for purchases. It’s one that was highly sought after for a long time due to being the premier source for computer parts and accessories
- Overstock – Overstock has gained a lot of recognition due to being one of the first major retailers to accept bitcoin for purchases. They also get a lot of credit for not immediately dumping coins back on the market to return to fiat; instead, they are holding a large portion of them long-term. The theory is that this reduces liquidity a small bit, but decreases the amount available on the market (at least at the market value) and therefore helps to raise the value of the coins as a whole
- Namecheap – this is a site that accept bitcoin for domains, shared web hosting, VPSs, dedicated servers and many more things related to hosting websites. While they were already a trusted and well-known domain provider prior to the acceptance of bitcoin, this really boosted up their recognition in the bitcoin community
- Dish Network – this is a well-known company that provides satellite television. Now, bitcoin can be used for their services to cover the monthly costs
- Expedia – Expedia started accepting bitcoin for hotel reservations. As of yet only hotels are included in their bitcoin acceptance, but they have also announced that they are planning to accept them for flights, activities, car rentals and more
- Campaign contributions – the FEC has already stated that bitcoin is okay to use as a form of campaign contributions, allowing those that are running for office to accept the currency to convert to fiat to help raise awareness. This has a double benefit: it helps let the person running accept more contributions (by offering choices) and helps raise awareness of bitcoin
Along with the different businesses listed above (of which there are many, many more), there are a lot of opportunities that have been popping up in the area of proxy services. This is where someone pays bitcoin for a service or product that only accepts fiat, and an intermediary person (the proxy service) will take those bitcoins and pay for the product or service for a fee. As an example, these exist for Amazon, where, despite Amazon not accepting bitcoin right now, customers can pay the service in bitcoin and the service will make the purchase on Amazon using fiat.
This type of service has really opened the doors to a lot of new ways to use bitcoin. In essence, even when a business or individual doesn’t accept bitcoin, customers can still use it; just not directly. This was actually seen in the case of the Tesla Model S that was bought using bitcoin. The trick to this was that the Lamborghini dealership that accepted the bitcoins was not doing so directly. Instead, they were using a proxy service like BitPay, which allows merchants to accept bitcoin but have it converted to fiat and then deposited into their account.
The Expansion of Services
Bitcoin has been constantly gaining more and more traction in the world, with new businesses starting to accept it and others being formed solely around it. This has two major benefits: as more businesses accept bitcoin the more legitimate it becomes as a currency, and it decreases the need for conversion back into fiat right after making sales (or prior to making purchases). For example, the way most businesses that sell products have to work is:
- Accept bitcoin for the purchase
- Convert bitcoin back to fiat
- Use fiat to purchase more products to sell
The reason for this is that unless every supplier were to accept bitcoin, at some point a business has to cash in if they want to continue running (and obtaining more products). This creates liquidity but in most cases businesses will just dump the coins at the current market value, as they would otherwise have to wait an unknown amount of time before they can purchase new products.
If they were waiting and the value of bitcoin decreased in that time, they may not be able to afford new items, which means they would cease to be able to continue their operations. Many people think that the conversion to fiat is a negative thing and should be avoided, but at this moment in time it is a necessity in most cases. With the expansion of businesses accepting the cryptocurrency, however, things are quickly changing to where this won’t be true anymore.
Helping Bitcoin Spread
While there are many businesses and opportunities to spend bitcoin on products and services, there is always more room to expand. This is something anyone and everyone can help with, as well, by simply accepting bitcoins for your own products and services and by making requests to others to do the same. For example, if you visit a small shop every now and then, you can make a request that they accept it. The same goes for major retailers as well; simply write a letter or other request to let them know you’re interested. While a single person doing this will not make a huge difference, it starts to add up as many others from the community do the same thing. And the more businesses pick up bitcoin, the more it will grow as others will follow suit.