How do Bitcoin debit and credit cards work?

Since its appearance, Bitcoin has revolutionized the world! But,what is Bitcoin? It is a type of cryptocurrency that uses digital tokens. It can be used as a means of payment, as an investment method (although it is quite volatile), or to be transferred from one person to another. It could be said that, in the midst of the digital age, Bitcoin works just like the dollar and is used to carry out daily transactions. provided that the receiving person or company accepts Bitcoins as a means of payment. Here we will see what bitcoin debit and credit cards are.

If you have Bitcoins and want to use them in your daily transactions easily and quickly, perhaps the Bitcoin card is for you. Think that, in this way, you can use your card to complete your transactions with the Bitcoins you have in your wallet.

Not sure how Bitcoin debit and credit cards work? Then you have come to the right place! We have prepared a summary of them so that you can easily identify their benefits.

Keep reading: Does Bitcoin pay taxes in the United States?

But first, everything you need to know about Bitcoin

The price of Bitcoin constantly fluctuates in the market. If you check the price of this cryptocurrency (which is very similar to that of stocks traded on the stock exchange, the price of gold or the Forex market of foreign currencies), you will notice that in the month of December 2017, Bitcoin broke the $19,000 barrier.

In February 2018, the price of Bitcoin fell to $7,200 and on May 31, 2020, it stood at 9,553.36. Conclusion? The value of Bitcoin is not stable. In fact, it is one of the most volatile cryptocurrencies on the market.

What makes Bitcoin so coveted is essentially the Bitcoin network. through her, people can transfer cryptocurrency in a safe and decentralized way, that is, without the participation or control of individuals or companies. These transactions are recorded in a log which, in turn, is stored on each user’s computer.

Read on: What are the best Bitcoin debit cards?

In essence, the Bitcoins can be deposited in a digital wallet that, for security measures, has a 100% shielded unique identification. In order to send Bitcoins to another person, the user must send them a unique address that is generated by the currency exchange platform. To finish, the consumer must copy the address on the Bitcoin exchange platform, enter the amount to be transferred and press the “send” button.

Note: Bitcoin transfers can take up to an hour to complete. Take this factor into account before making your payments or accepting them in this way.

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How do Bitcoin debit and credit cards work?

Before starting, it is important that you know that there are currently no Bitcoin credit cards available on the market, but according to the latest statements from Fold (a shopping application that supports Bitcoins as a means of payment), a card could be launched. Bitcoin rewards credit for June 2020.

Blockrize is another of the companies that have raised the possibility of launching a Bitcoin credit card in 2020. In fact, a San Francisco-based entrepreneur claimed that he is working on a credit card that offers cryptocurrencies as a welcome bonus for new cardholders, just like other rewards, points and miles cards available on the market.

In this case, it is expected that the card would pay 1% cryptocurrency rewards instead of 1% cash back. The idea has been well received, so much so that there are already more than 5,000 people on the waiting list to apply for the card.

Tip: Do you want to buy Bitcoins? Well, keep in mind that the ability to buy Bitcoins with a credit card is limited, since most issuers and banks have prohibited the purchase of cryptocurrencies.

What about Bitcoin debit cards?

While there are no Bitcoin credit cards (at least not until the publication of this article) yes there are debit cards. Coinbase offers a Visa-backed Bitcoin debit card. This card allows users to use their Bitcoins as a means of payment for their daily purchases.

To get it, the first thing you have to do is open a Bitcoin wallet. Next, you will need to associate your debit card to the wallet. This will allow you to use the debit card anywhere Visa is accepted as a means of payment. For example, if you have a Visa Bitcoin debit card, you can use it at any business, store, company, bar or restaurant that accepts Visa credit and debit cards.

By being backed by a payment processing network like this one, your purchases would be protected against fraud, just as it would happen with any other Visa credit or debit card in the country.

Keep reading: How to get a Walmart credit card in the United States

What drawbacks does this Bitcoin debit card have?

Bitcoin debit cards may be subject to similar fees and commissions as prepaid cards. For example, if you have one, you may have to pay for making withdrawals, transactions, etc.. Also keep in mind that as the price of Bitcoin fluctuates frequently in the market, the number of Bitcoins you need to complete a transaction could vary, even on the same day.

Tip: It is important that you always check the amount of Bitcoins you have in your wallet and their value in US dollars. This way, you will ensure that you have enough money to complete your transaction. Another way to protect yourself would be to carry an alternative means of payment with you. So, if you don’t have enough money in your wallet or if the company does not accept this card as a means of payment, you can complete your purchase or payment without problems.

Unfortunately, despite its usefulness, Bitcoin debit cards could be quite short-lived. In 2018, Visa told BitPay, one of the most popular Bitcoin debit cards on the market, that it would close its accounts. Other cryptocurrency cards have been suspended, thus forcing the company to transfer the remaining funds to consumers.

Remember: Bitcoin credit and debit cards that are available in other countries may not be accepted in the United States. Also, finding the right one for you may be difficult. Why? Mainly, because Bitcoin is not regulated by federal agencies.

Tip: Whenever you use Bitcoins as a means of payment, whether through a credit or debit card, be careful! This cryptocurrency is a volatile asset and deserves special attention to avoid loss of money, scams or fraud.

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