In the last few years, the interest in Bitcoin has skyrocketed nearly as much as its market value. We’ve all heard the stories of the lucky first adopters who bought early and have won big. However, since more and more people have been getting in on cryptocurrency action, there has been a growing demand for an easy way to spend your hard-earned coins. Bitcoin debit cards are a relatively new development and really show how cryptocurrencies have become a legitimate alternative banking choice. This article aims to help you understand what a Bitcoin debit card is and how they work.
A Bitcoin debit card is much like a regular debit card but there are a few key differences. Much like a regular bank account, you will have an amount of money sitting in there, however in this case that amount is linked to the value of the Bitcoins you own. All transfers and exchanges are generally run through an app that is linked to your card. The debit cards are prepaid, so you load up your card with a certain amount of Bitcoins. This amount then sits in your account and the monetary value fluctuates with the market price. You could load your card with what was 100 dollars worth of bitcoin and find the next day it is only worth 50.
As mentioned on hedgewithcrypto, some cards also offer the benefit of being able to have multiple cryptocurrencies linked to your account at once. This is great if you want to pick and choose where you want to cash out or decide to spread the cost across your portfolio. You can also get some nice perks from these debit cards, like a certain percentage of transactions given as cashback. However, these accounts can come with fees for transactions and ATM withdrawals as well. As you can see, a Bitcoin debit card is not much different from a regular card but the amount of money you have available fluctuates with market value.
So, let’s get down to the details - how do these cards actually operate? As mentioned above, these debit cards are linked to an accompanying app. This app is effectively an exchange market where you sell your Bitcoins or other cryptocurrencies to make purchases. Normally, these conversions happen instantly as you purchase something. Given that the value of cryptocurrencies fluctuates, you might want to keep a watchful eye over your balance. You’d be kicking yourself if you bought something with your Bitcoin debit card when they’d just taken a huge dip in value. Although conversely, you might get lucky and be able to afford something big when Bitcoin prices are higher. Given that companies are willing to buy your Bitcoins from you directly just goes to show how stable the market is considered to be and the likelihood of it trending upwards, over time, is high. These are the basics of how Bitcoin debit cards work.
Why might you want to get one of these you ask? Well, there are a few reasons. Firstly, cashing out of cryptocurrencies can be difficult. It is also a very final process, you’re committing to transferring your Bitcoins into actual cash with no take-backs. Whereas, with a Bitcoin debit card, you are just giving yourself the option to instantly spend your Bitcoins. Another benefit is that many cards offer generous cashback offers, with some companies offering up to 8% on transactions. That is pretty substantial in comparison to most conventional bank accounts. It is worth doing a bit of shopping around to find one that looks like it will work for you. As the amount of companies has increased they have all started offering very competitive rates. Having some of your Bitcoins loaded onto one of these debit cards would allow you to take advantage of quick variations in market price. Lastly, and most obviously, many vendors do not accept straight Bitcoin purchases and probably won’t for some time. These are just some of the benefits of having a Bitcoin debit card.
If you’re pretty much set to go ahead and take the plunge, there are a couple of other things worth bearing in mind. Despite these debit cards being linked to an app, they cannot be linked to your Apple pay. This might not sound like a big deal, but if you utilize this feature on your iPhone then it could be a dealbreaker. However, It is possible to get the card linked to your Android payment system. If you do a bit of shopping around, some cards may offer you the ability to take out a loan equivalent to the value of your Bitcoins. What this means is that you can spend money, without actually selling your bitcoins. The loans are backed by the value of the cryptocurrency at the time, which means if the price goes up you’ve effectively just been spending the interest on your bitcoins. Although it does rely on the market value increasing, this is a cool feature of some Bitcoin debit cards.
Bitcoin and cryptocurrencies, in general, have become legitimized in recent years. Not least because you can now get Bitcoin debit cards, meaning that companies are willing to bet on the currency not crashing back down to zero. If you have some Bitcoins or any other cryptocurrency, and you want to start spending some of your profits then a Bitcoin debit card might just be the way to go. They give you flexibility, rewards, and the ability to instantly convert your bitcoins into easily spendable cash. With a bit of shopping around, you’ll be sure to find the right company for you. Remember, Bitcoin debit cards are much like regular debit cards except the amount of money you have in your account depends on the value of your Bitcoins. I hope this article has helped explain what a Bitcoin debit card is and how they work.