One of the primary reasons cryptocurrencies were developed was for them to be used as anonymous payments. This reason is often lost in the hype by media outlets and the financial sector, which are focused on prices going up and down. Prices are important, but it is more important to know how to pay with cryptocurrency because it is gaining so much traction and popularity.
Cryptocurrency is complicated, but using it to pay for something is relatively simple. Here's how and where you can pay with crypto.
Table of Contents
How to Make a Payment with Cryptocurrency
At one time, sending a cryptocurrency involved diving into the command line on your computer and programming a transaction. Now, the complex process of sending and receiving crypto is much more simple, very much like using an app to send or receive money to and from your bank account. How you initiate the payment is specific to the application you choose, but generally speaking, here is how it works.
Acquire a Cryptocurrency
It isn't necessary to have an account with an institution, exchange, company, or other entity to acquire a cryptocurrency. However, it is one of the easier and safer ways to get your hands on some cryptocurrency unless you're familiar with setting up a wallet and sending or receiving crypto.
A regulated cryptocurrency exchange will let you exchange fiat money for cryptocurrency. It will also give you some extra features if you need them, such as storing your private keys for you or helping you with technical issues. A reputable one like Coinbase, Binance.US, Kraken, or Gemini will be able to get you started when you create an account and fund it for your crypto purchases.
To make a payment using cryptocurrency, you'll also need to have a wallet application. Wallets can be installed on your computer or mobile devices, and act as an interface for accessing your crypto.
Your wallet doesn't actually store crypto; it holds the keys you need to access them—these are your private keys. Your wallet has a public key that is used in transactions; it acts like an email address that that's used to send and receive payments.
There are hundreds of wallets available, each with different features. Some are compatible with nearly all cryptocurrencies, while others may only work with a few.
Most cryptocurrency exchanges provide a wallet for their users that lets them transfer funds to other exchange users or make payments using services that are compatible with the exchange's services. Many wallets can use your device's camera to scan QR codes to create unique addresses for sending and receiving crypto. Some even have near-field communication capabilities that let you make touchless payments in cryptocurrency.
Sending and Receiving a Payment
You'll need to use your wallet to send and receive payments. All wallets are different, so the Coinbase wallet is used for this example. In general, to make a payment, you:1
- Open your wallet app
- Click on Send Payment or similar button
- Enter the amount you want to send
- Enter the QR code or wallet address of the recipient
- Click Send or a similar button
To receive a payment, you would:
- Open your wallet app
- Tap Receive Payment or similar button
- Tap Share Address or similar button
- Accept the payment when it appears in your wallet
Where Can You Pay with Cryptocurrency?
Cryptocurrency is still in its infancy, but the list of places you can use it to pay for goods and services is growing. Most businesses that accept cryptocurrency as payment do so through cryptocurrency payment gateways, which are payment service providers that generally guarantee cryptocurrency to fiat conversion at the time of the transaction so that there is no price slippage.
Some notable businesses that accept crypto outright, let you add it to an app for payment, or accept it through a service provider are:
- AMC Theaters
Some brick-and-mortar retailers and stores are beginning to accept cryptocurrency as well. Those who do will generally use point-of-sale hardware linked to one of the payment service providers. You'll often see signs on the doors, windows, or at the cash register announcing which crypto is accepted.
Can I Pay with My Crypto Wallet?
Several online retailers and some brick-and-mortar stores allow users to pay with cryptocurrency wallets.
How Do You Buy and Pay with Cryptocurrency?
The easiest and best way to pay with cryptocurrency is to use your wallet, most of which are compatible with nearly all popular cryptocurrencies.
Where Is Crypto Accepted as Payment?
Many online retailers and some brick-and-mortar stores accept payment in crypto through payment service gateways and providers. Newegg, Overstock, Starbucks, and Twitch are popular retailers.