A Bitcoin transaction is a highly complex topic for many people, but not anymore. Here we unpacked all the parts of bitcoin payments for you to understand, once and for all, how they work.
For a long time, investors resorted to banks and brokerage houses to decide how to allocate their resources. Therefore, they could not imagine that the internet will become the most advantageous option to consolidate their wealth. Then, Bitcoin transactions appeared on the horizon.
Many people purchased Bitcoins in 2017 when this currency started to become well valued. However, in 2018 its value decreased slightly, causing many people to keep their virtual currencies because they could not sell. Allied to this, other people are still confident in this form of investment and converting their income into cryptocurrencies.
Therefore, it is crucial to know how it is possible to make payments with Bitcoin since many people have cryptocurrencies and want to use them.
If you, like them, are looking to put your Bitcoins into fair use, we have gathered here everything about Bitcoin transactions that an investor needs to know. Enjoy your reading!
What is Bitcoin?
Bitcoin is a digital currency that is independent of the government of any country. A process that is known as mining, just like all other cryptocurrencies, creates it.
Another term that is widely used in the world of digital currencies is blockchain. A kind of online ledger that stores information about cryptocurrency transactions. However, because it is decentralized and uses cryptography to record transactions, Bitcoins cannot be defrauded or copied, and transactions cannot be traced.
In the second half of 2017, Bitcoin became very well known worldwide, as its value increased significantly. Since then, some companies and stores have started using Bitcoin to sell and buy products and services because of its fame and use cases.
What is a Bitcoin transaction?
For those who like historical dates, the first recorded Bitcoin transaction occurred on January 12, 2009, between Nakamoto Satoshi and Hal Finney, one of the possible creators of Bitcoin and another developer and activist of cryptography in the world.
Bitcoin’s protocol allows transactions to be carried out between two individuals without an entity for intermediation; it is called peer-to-peer. In other words, it works exactly like the
use of physical bills of fiat currency, for example. Therefore, one can say that Bitcoin is the virtual equivalent of a cash transaction, but it also has its peculiarities, and we will explain all of them in this post.
What are its main uses and transactions?
There are a limited number of these cryptocurrencies. Its origin code established that only 21 million Bitcoins could be created and mined by 2040.
After that date, only those that are already on the market can be traded. Therefore, like gold, it is valuable because of its restricted supply and access.
The difficulty lies in mining Bitcoins, just like precious metals and stones, and not in the process of acquiring them. Some of the most prominent digital platforms for transactions offer an uncomplicated investor registration process.
Therefore, for those looking for a vital asset with great potential for appreciation, this is an exciting option. It cannot be considered a conservative investment, as Bitcoin has a higher volatility than conventional currencies, i.e., a higher price variation.
This oscillation, however, is not due to government intervention, such as issuing new currencies to balance inflation, for example. Like the Stock Exchange, its variation is related to supply, demand, and events that can affect its market, and for this reason, it can be used strategically to leverage investments.
From both the customer’s and the seller’s point of view, Bitcoin transactions bring several benefits.
In some cases, they may be fee-free, but even eventual commissions paid to intermediation services and the network fee we will talk about below do not compare with the bank charges currently charged.
As a bank or government does not manage them, they are excellent options for transferring money between countries, and their virtual model even ensures that this process is fast.
Claim back protection
For service providers and businesses, cryptocurrency transactions are guaranteed to be received as they cannot be undone. This is not the case with credit card transactions, for example, which the cardholder can reverse.
One must remember that due to their characteristics, transactions with Bitcoins can support several applications, such as anonymous donations or simple payments, from buying a pizza to graduate school tuition, for example.
However, it is to be expected that they will be used more regularly for investments, transactions between users, or purchases of technology or high-value items.
How do I get paid in Bitcoins?
If you want to receive Bitcoins for your service or product, you need to create an account on a digital currency management site such as Cryptografic. After registration, you need to choose the currency into which you want the Bitcoins to be converted when they go into your bank account. Usually, fees are charged for this transaction. So it is worth researching what the prices are on each site and choosing the one that offers the best rates for your pocket.
Now that your account is created and set up, you can start receiving payments in Bitcoins. To do this, send an email to your customer with a link to the charge. Or, if your site allows it, send a QR code for your customers to pay through
How to pay bills with Bitcoins?
If you intend to use your Bitcoins to pay your bills, know that it is entirely possible. After all, many of the accounts that are produced today are in the form of statements.
Go to a site that allows the payment of the bills using cryptocurrencies. Then copy the invoice code and deposit your Bitcoins. Within a day, it will be paid. If you want, you can also recharge your cell phone through these sites.
Example of purchasing with Bitcoin
Imagine you want to buy a property with Bitcoin. After agreeing on the trade value, the seller would enter his or her address to receive the input, and the buyer would execute the Bitcoin transfer command.
In a hypothetical sale of 80 BTCs, the blockchain would direct the seller’s portfolio so that the lowest network fee would be charged. Once the transaction is sent to the blockchain, miners would validate the code and confirm it.
More sensitive data and the traders’ documents would be dispensable for the transfer; only the inputs and outputs and the security key to validate the result will be needed. From that moment on, the whole process would be virtual until the receipt is completed.
Cryptografic is a payment solutions provider based in Estonia for international e-commerce companies. We provide wallet and cryptocurrency exchange services to implement on our
clients’ websites as payment solutions. Our company serves as a gateway between card providers and merchants since our entire approach is based on online sales, and we only work with electronic payments. We also provide consulting services for companies in the e-commerce sector on compliance with AML, IT requirements, as well as national and international regulations.