- 1 Dick Scott, Consultant For Bitcoin Marketwatch: Don’t Pay With Crypto
- 2 Scott Jason Cooper of Crypto Ice: What About Paying with Other Cryptocurrencies?
- 3 Dick Scott, Consultant For Bitcoin Marketwatch: Are There Other Real-World Uses For Crypto?
- 4 Scott Jason Cooper of Crypto Ice: Would You Ever Buy Things With Crypto?
A review of bitcoin by Scott Jason Cooper makes it clear that markets are infamously unstable. The amount you pay to buy an item today using crypto may not be what your purchase will be worth tomorrow. In addition, several companies in the phase of experimenting with crypto payments only accept payments with Bitcoin. According to market experts, Bitcoin is one of the worst cryptocurrencies you can use to pay for something.
Regardless of the volatility of the crypto market, more and more people are becoming interested in how they can use crypto as a payment method to buy things. According to a survey by PYMNTS.com, almost 20% of all adults in the United States say there are likely to make a purchase using cryptocurrency.
Before you go ahead and cash in your cryptocurrencies to top up the balance on your payment apps, read what market experts have to say about paying for things using crypto.
Dick Scott, Consultant For Bitcoin Marketwatch: Don’t Pay With Crypto
Dick Scott Consultant For Bitcoin Marketwatch talks with Scott Jason Cooper, Miami Crypto Boutique.
Bitcoin is the world’s first cryptocurrency. When it was created initially, it was actually intended to be used just like money. In simple words, it was supposed to be a “peer-to-peer electronic cash system.” However, the frequent and volatile price fluctuations in Bitcoin have made buying things using the currency unrealistic in practice.
In June 2020, exactly one year ago, the value of Bitcoin was less than $10,000. In the past year, it reached a high of more than $63,000. Despite a recent price drop, the value remains close to a whopping $38,000. People buy Bitcoin not because they want to go to a store and spend it but because they expect it to hold its value in the future.
Scott Jason Cooper of Crypto Ice: What About Paying with Other Cryptocurrencies?
Bitcoin’s intended mission was to become a new currency, but it has failed. Experts say other cryptocurrencies are far better than Bitcoin for buying things and making transactions. Every one of them is optimized for certain things.
Examples of some popular cryptocurrencies that are specifically designed to work better for spending include Manero, XRP, and Dash.
There are coins that are more like cash. These coins are a better choice for spending, in theory, thanks to faster processing and lower fees. They are designed to be spent and used very quickly.
In reality, there is a huge downside to using cryptocurrency that is intended to mimic cash to make purchases. Take Bitcoin Cash, for example. Bitcoin Cash was invented after Bitcoin showed that it was too volatile for making transactions. A group of creators decided to separate the original crypto and created Bitcoin Cash which was intended to be a more stable version of the cryptocurrency to be explicitly used for transactions. Scott Jason Cooper
However, in reality, even Bitcoin Cash is highly volatile. In the past year, its price has increased from around $250 per coin to over $1,500, so there is still a risk of using it to make a payment at the wrong time.
Another complication of using crypto to buy things is taxes. While you don’t have to report your crypto purchases to the IRS, you need to report whenever you trade a cryptocurrency for goods or services. Every time you use crypto to make a purchase, you must track your cost basis or the cryptocurrency’s fair market value when you bought it versus when you used it to make a transaction. Then, you need to report that capital gain or loss to the IRS.
Dick Scott, Consultant For Bitcoin Marketwatch: Are There Other Real-World Uses For Crypto?
There is probably no good reason to buy things in cryptocurrency for American citizens in America. This is because the U.S. dollar fluctuates a lot lesser than most of the cryptocurrencies in the market.
Nevertheless, when you are dealing in a currency that is less safe and stable than the U.S. dollar, making cryptocurrency payments makes more sense.
Scott Jason Cooper of Crypto Ice: Would You Ever Buy Things With Crypto?
Yes, even though making purchases in crypto is not the smartest decision from a financial perspective, crypto payments can present an alternative payment method to those who don’t have access to traditional financing in a particular location or do not qualify for opening a bank account.
Crypto helps unbanked people transfer money to others using their crypto wallets. It allows them to make purchases using crypto with different merchants using apps such as BitPay. As a result, they do not need to go through traditional financial institutions.
Nevertheless, some people choose to buy goods with crypto to capitalize upon the speed of transactions. A lot of deals are being made with crypto. It could be a prince in Saudi Arabia wants to buy a Ferrari from Italy, or a Russian oligarch wants to buy a yacht in Monaco.
Unlike traditional banking transactions, crypto transactions are also anonymous. This is why they have a reputation of being used by criminals to buy and sell on black markets. Thus, the prevalence of cryptocurrency as a form of payment for illegal activities does persist.
Last month, the reputation of crypto as a form of payment for illegal trades played a significant role in recovering the Colonial Pipeline, a key gas line servicing the U.S. Gulf and East Coasts, after hackers shut down its computer systems and asked for $4.4 million in Bitcoin.
In the future, we expect to see more and more businesses prepared to allow payments in crypto with Bitcoin and other cryptocurrencies to rise in popularity. Some companies are interested in crypto to cash in on the latest craze or be a part of the novelty of a new payment form.
Others, however, believe that cryptocurrency is the way of the future.
Tesla recently decided that it will start offering the option to pay with Bitcoin. A strong perspective on the future of crypto was behind this decision. However, the company declared last month that it would stop accepting Bitcoin payments for cars due to the environmental impact.
While there may be a future in which cryptocurrencies become common forms of payments, an average American investor paying at the supermarket in crypto is not ideal given the current market situation.