How To Use Bitcoin?

Lost money to a crypto or trading scam? Read this first:

If your losses exceed £3,000 (in the UK) or $10,000 worldwide The Crypto Adviser can offer advice on recovering your funds. 

>> GET IN TOUCH

One of the questions we often get asked during our Crypto for Beginners training courses is ‘how to use my Bitcoin?’.

Once people have got over the hurdle of understanding how crypto works, setting up a trading account and buying their first Bitcoins they’re keen to know how to actually use it.

This is an interesting question and the answer really depends on why you bought Bitcoin in the first place.

If you’re a ‘hodler’ (someone who plans to hold your coins as a long-term investment and store of value) then the question obviously doesn’t apply.

But if you want to become more actively engaged in crypto and appreciate its disruptive functionality then knowing how to use your coins is crucial.

Using Bitcoin

Here are few of the most common ways you can use your Bitcoin:

1. Global Transactions. The borderless nature of Bitcoin means it’s ideal for global payments. Individuals and businesses can use crypto for sending and receiving funds without the need for a traditional banking intermediary. This can cut costs and transaction processing times.

2. Real-world payments. An increasing number of shops, restaurants and bars are accepting Bitcoin as payment, although it’s fair to say they’re still few and far between. Check out our guide to businesses that accept Bitcoin.

3. Smart contracts and decentralised finance (DeFi). Cryptocurrency and the underlying blockchain technology has opened up a world of seamless financial products which eliminate the need for the involvement of mainstream financial institutions. DeFi is seen as a major disrupter of the industry and is being deployed in many different financial areas.

4. Charitable donations. Many large charities will now accept donations in the form of Bitcoin as transactions are transparent and traceable, despite what many people think.

5. Tokenisation of assets. Bitcoin’s blockchain can be leveraged for tokenisation of real-world assets. This enables valuables such as cars, art and property to be divided into shares which opens up new fractional ownership investment opportunities for individuals who would otherwise be unable to afford the assets outright.

Straightforward process

Using your newly acquired crypto is incredibly easy, whether your coins are held on an exchange or a self-custodial wallet app or hardware wallet.

All you need to do is grab the receive address from the business or individual you want to send coins to and paste this into your app (making sure you’ve used the right address!).

You then agree the transfer fee and click send, confirm the transaction using 2FA in most cases, and voilà – your coins are on their way.

The time it takes for them to reach their destination will depend on how busy the network is and the fee attached to the transaction.

But in most case the crypto will arrive in a matter of minutes and the transaction will be complete and irreversible.

How Bitcoin’s utility has evolved

It’s fair to say that Bitcoin has moved on from its original purpose as a decentralised digital currency.

It still remains a medium of exchange, but its use cases go far beyond this now, with many people also viewing it as ‘digital gold’.

Conceived in 2009, to this day Bitcoin continues to prove its relevance and versatility and as the crypto ecosystem matures the applications for the OG of crypto are likely to expand even further.