How Bitcoin Cards Work – Explained
When a person goes shopping whether it is online or in-person at a store, it is important to know that one’s money is secure. One of the best ways to ensure your money goes to only your account and your purchases is through the use of crypto currency. The most well-known out of the ones currently in existence is Bitcoin.
Bitcoin now has debit and credit cards available for those with funds in the crypto currency. Before we get into that, we should first figure out what they are.
As mentioned above, Bitcoin is a crypto currency that can be transferred (like regular banks funds) from one person’s ‘Bitcoin wallet’ to another. Individuals who possess the crypto currency can purchase goods and services from any online business or company with an online presence who process payments with Bitcoin.
A single Bitcoin can increase in value to as much as $19,000, the highest at the end of 2017. Less than two months later, the price plummeted to only $7,200.
The interesting thing about Bitcoin is how it’s transferred: users trade Bitcoin through a shared network where no one computer acts as a server. The information for all transaction is stored on the computers of those who serve to verify the transaction using the crypto currency.
If you want to get into Bitcoin, you will need a Bitcoin wallet that comes with a unique ID. The only way to transfer your funds to another user is by using a special address given by your chosen exchange platform, such as Coinbase or Square. Using the special address, you enter the amount and hit send. It will be at least an hour before the transfer is reflected in yours or the other user’s Bitcoin wallet.
How do Bitcoin Debit Cards Work
Bitcoin wallets are your ‘bank account’ with the crypto currency. Like accounts opened with banks, you’ll have to link your chosen card to the wallet containing your funds. After completing that step, using anything like a Visa Bitcoin debit card will actually be accepted anywhere the Visa logo is.
Just like the prepaid card I bought from Wal-Mart a few years ago, there might be fees for withdrawal, transaction, and even monthly account fees. Remember how fickle the Bitcoin space is because a transaction that only cost you a few Bitcoins today may cost you dozens tomorrow.
Keep an eye on the amount you have in your Bitcoin wallet as both Bitcoin and USD. That will make it easier to gauge whether or not your funds can cover the costs of a transaction. You do not want to rely solely on your Bitcoin card, so bring a backup card or some cash in case a vendor doesn’t accept your card.
It might be best to get on the bandwagon while you can. Just last year, Visa shut down the most popular of the cards, Bitpay, back in 2018. You might also find that certain cards available in places like France or Indonesia are not available in the United States.
Because Bitcoin is not regulated by Federal agencies, you may have even more trouble finding a card.
The Future of Bitcoin Credit Cards
Sure, there are only a few debit cards available to go towards your wallet but do not expect to find a Bitcoin credit card as none yet exist. U.S. credit cards are restricted in that they only allow their owners purchases in USD.
If you’re looking to pay off your credit card with Bitcoin, you’ll have to look at transferring the corresponding amount to a checking account in your name. The acquisition of Bitcoin using credit cards is also restricted, with many major issuers banning crypto currency altogether.
For those truly wanting both Bitcoin debit and credit cards, there is hope on the horizon. Mastercard is looking to open up by filing a patent that would allow them to manage Bitcoin credit card transactions. So far, though, that’s all the information that has come about from that area.
American Express is looking to change the game up by using Blockchain, the network technology used for Bitcoin, as their digital receipt system.
Blockrize, started by a 25-year-old entrepreneur based in the California bay area, is working on a credit card that functions much like Chase and other major banks’ rewards cards. Those who use this card for their purchases will receive 1% crypto currency rewards.
There are a few thousand people on the waitlist, but it might be best to wait and see if Bitcoin will last for a few more years.