For a large part of its existence, the Bitcoin (BTC) community placed a lot of faith in the cryptocurrency becoming a viable alternative to many centralized payment systems existing in the market. However, BTC currently is mostly used as a long-term investment - an asset much like gold or stocks.
How and why did this happen? On close inspection, it seems that Bitcoin as a payment service was doomed from the very beginning, as its underlying blockchain technology simply can’t scale to compete with industry giants such as Visa, MasterCard and PayPal.
The main problem is the amount of transactions that the network is able to process. Bitcoin’s absolute maximum capacity is a mere 7 transactions per second (tps), while Visa easily handles an average of 150 mln transactions every day, and is capable of facilitating 24,000 tps.
As more and more people started using Bitcoin and sending transactions, the network became bloated. Along with the amount of transactions, the waiting times and, most importantly, transaction fees have skyrocketed.
According to blockchain.info's data, the average waiting time in winter 2018 was in the region of hours, in some extreme cases - hundreds, sometimes even thousands of hours. The graph peaked on Jan. 23 at an astronomical number of 11,453 minutes - almost 20 days.
It is worth noting that such excessive waiting times were most likely associated with microscopic transactions sent through with tiny transaction fees, if any at all. So, miners simply avoided confirming such transactions as it would be a waste of time and resources for them.
Still, for the transaction to go through as quickly as possible, users had to pay massive amounts of fees so that miners will actually confirm them. According to BitInfoCharts, at one point during the winter period users had to pay an average of $55 to see their transaction go through.
Quite obviously, no one is going to use Bitcoin to buy a $3 dollar cup of coffee and have to pay 15 times that amount in fees and wait for a couple of hours until transaction is confirmed. But still, stating that ‘we accept Bitcoin’ is still a very useful PR stunt for businesses.
However, as of now Bitcoin seems to have gone over its winter crisis. The waiting times returned to a 10-30 minutes mark and the transaction fees dropped back to around $1. For now.
The two graphs mentioned above correlate exactly with Bitcoin’s price. As you all remember, it managed to climb over a $20,000 mark this winter and everyone went into a frenzy. Now that its price is back below a $10,000 mark, the general public seems to have calmed down a bit and, as a result, the network is back to its normal service.
Moreover, the Lightning Network, which is hailed to be the solution to Bitcoin’s scalability problem is being actively and successfully tested at the moment. Once fully implemented, it might make the community’s dreams of Bitcoin competing with Visa a reality.
But the damage was done. As a result of the winter crisis, several high-profile service providers and retails stopped accepting Bitcoin as a form of payment. Here’s a small example of the largest companies:
However, there are still a lot of services what you can spend your Bitcoins on:
Most major online retailers are still not accepting Bitcoins as a form of payment, but there is a way of buying products from them using only digital currency. See the Gift Cards section below.
Bitcoin’s acceptance as a payment option depends on a particular company’s decision. Hence, there are no specific markets where BTC is universally accepted. Instead, there are various companies in different sectors of services looking to expand their client bases by introducing digital currencies as a new payment option.
Back in the day, you had to visit a physical store to purchase a video game. These days, most gamers shop online. Video games are becoming a digital possession, much like digital currencies themselves. So it is only natural that more and more leading game-selling platforms are accepting Bitcoins.
There are a lot of competing travel-related services and most of them offer very similar toolkits. Offering alternative ways of payment is a great way to attract new customers. Here are some services where you can book your dream holiday and pay for it with your Bitcoins:
Donating money to charity often incurs huge fees. Moreover, some people would prefer to keep their donations anonymous, for one reason or another. Donating money in Bitcoins is a perfect way of avoiding those fees and keeping the donation anonymous.
Unfortunately, there are very few major offline retailers that are accepting direct Bitcoin payments. However, it is possible to buy goods from most major shops using BTC, see the Gift Cards section below.
There are several taxi dispatch services as well as airport transportation services in various parts of the world that accept Bitcoin payment. Here’s a mappable list of such companies.
A very big part of Bitcoin-related transactions are purchases of gift cards. It is by far the easiest way of buying products from both massive worldwide companies and small local businesses with the cryptocurrency, online and offline.
Several websites allow users to buy gift cards of pretty much any value with Bitcoins, among them are:
In the beginning of 2017, Recruit Lifestyle Co., Ltd partnered with Japanese Bitcoin exchange Coincheck to create a point-of-sale app called ‘Mobile Payment for AirREGI.’ The tablet-based app-enabled merchants all over Japan to easily accept Bitcoin payment.
The first rollout saw a chain of 334 eyeglasses store across Japan to begin accepting Bitcoins. Currently, there are around 260,000 commercial facilities, food establishments, drugstores and other retail locations all over the country accepting BTC.
The latest additions to the ever-growing list of merchants accepting Bitcoins include famous capsule hotels such as Comicap and Anshin Oyado, a major consumer electronics retail chain Bic Camera and Kai Corporation, which owns five unique restaurants in Japan.
For those who prefer to store their funds in a heavy, physical form there are companies such as BitGold, which specializes in utilizing gold for payments and savings, including Bitcoin. There is also a company called Amagi Metals, which has been trading Bitcoins for precious metals since 2012.
In 2013, The University of Nicosia, a private school in Cyprus, became the first university to offer a program called “Master of Science in Digital Currency.” Of course, if you wish to study this program, you can pay your tuition fees in Bitcoins.
Meltdown Comic Shop in Los Angeles recently became the first-ever comic book store to accept Bitcoins.
For those who have made their fortune with Bitcoin, there is a luxury BTC marketplace BitPremier, where you could buy a villa in Bali or an $11 mln yacht. Moreover, a US luxury jewelry chain Reeds has recently started accepting Bitcoins as well.
If you’re feeling adventurous, you can try your luck on one of the numerous Bitcoin online casinos and gambling sites.
Lastly, the mysterious dark web is filled with websites and marketplaces, where Bitcoins are accepted for a variety of goods and services, yet they are completely illegal in most countries.
Do you have a few extra Ether tokens lying around? Here’s a list of places where you can spend them:
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