How to buy gold with Bitcoin

 How to buy gold with bitcoin

Although the concept of a cryptocurrency having no central authority was designed in 1998, it took 11 years to create the first digital currency based on a decentralized payment network – the Bitcoin. Today, you will be surprised what you can buy with bitcoin and how it became an international currency. Since its debut in 2009, over 13 million people started using the new electronic currency to send and receive payments or make purchases. Its numerous advantages made bitcoin a convenient payment method, being adopted by various businesses around the world, including bullion and precious metals dealers. However, you should keep in mind that bitcoin is still in the development phase and there are a lot of things you should know and understand about this payment option before you buy gold with bitcoin. 

What is Bitcoin?

Bitcoin is both a cryptocurrency and an electronic payment system released as open-source software in 2009. Bitcoin is a digital currency governed by cryptography, being generated based on mathematics, computer science, and electrical engineering. The system is P2P (peer-to-peer), and all bitcoin transactions take place directly between two users, with no intermediary, for which is called the first decentralized digital currency. Network nodes verify Bitcoin transactions and are recorded in a blockchain – a public distributed ledger where all business transactions and amounts are kept.

How is Bitcoin created?

Bitcoin is created and given to users as a reward for “mining” – a competition in which the users offer their computing power for verifying and recording bitcoin transactions into a new block in the blockchain. Successful users (miners) are rewarded with newly created bitcoin and transaction fees. 

Pros & Cons of Bitcoin Payments

With an average of about 250,000 daily transactions, bitcoin payments became so attractive that more and more people and businesses start to use it. If you are wondering why bitcoin payments are so popular, take a look at its advantages:

Pros:

  • Convenience – with a bitcoin wallet, you can send payments and make purchases anywhere in the world since all transactions occur online.
  • Freedom – the bitcoin system offers complete money control as the are no restrictions, no limits, and no holidays.
  • Speed – since there are no intermediaries involved, a bitcoin transaction has the fastest settlement compared to other payment methods.
  • Security – bitcoin ensures protection against identity theft since transactions are never associated with the personal identity of the user and can’t be traced back to him. Also, there are additional methods of adding extra protection (encryption and backup).
  • International currency – bitcoin can be accepted and used at any merchant around the globe, so there is no need for an additional conversion when making purchases.
  • Low transaction fees – transactions fees for bitcoin payments or purchases are very low and do not depend on the amount.
  • Divisible currency – when calculating equivalents in bitcoin, you can go up to 8 decimal places (one-hundredth millionth of a bitcoin), being expected to become more in the future.
  • Insurance – the cryptographic infrastructure on which the bitcoin protocol is based, is several times more secure than the technology used by banks and credit cards.

The list of bitcoin payments advantages is quite impressive. However, as any payment method, there are certain risk and disadvantages associated with it:

Cons:

  • Volatile exchange rate – since its inception, bitcoin’s value has experienced various price fluctuations more frequently and drastic than any other currency form. For this reason, it’s not recommended for now to keep savings with bitcoin, but it’s expected that the volatility will decrease over time.
  • Irreversibility – bitcoin transactions are instant and irreversible hence they can be canceled. However, transactions can be refunded by the person or entity receiving the payment based on their Refund Policy.
  • Transparency – all bitcoin transactions are public, traceable and permanently stored on its network based on the user’s bitcoin address. Therefore, anyone can see all transactions and the balance of any address, and for this reason, it’s advisable to create several addresses or wallets to protect privacy

Set Up your Bitcoin Wallet 

You can use the most secure money for the internet to buy gold and silver at Bullion Exchanges. But before making any purchases using bitcoin, you should:

  • Select a bitcoin wallet
  • Fund it with bitcoin.

Bitcoin Wallet refers to any web or mobile application in which you can manage your bitcoin currency. The wallet is basically the equivalent of a bank account which allows you to receive, hold, spend or send your bitcoin. You can find the official list of bitcoin wallets on bitcoin.org.

Once you’ve installed your selected bitcoin wallet, you will receive your Bitcoin Address along with a Security Key which will be your credentials for sending or accepting bitcoin payments. After you’ve set up your Bitcoin wallet, you can fund it with Bitcoin. There are several ways of acquiring bitcoin, the most common being by:

  • Credit/Debit card –  purchase bitcoin with your credit/debit card and you’ll get them instantly reflected in your wallet.
  • Bank Transfer – buy bitcoin by connecting your US bank account to your wallet. Unlike card transactions, bank transfers have a certain processing period, so funding your bitcoin wallet by using this method may take up to 1-4 days.
  • Incoming Payment – you can receive bitcoin as a payment from other holders of bitcoin wallets.
  • Cash – if you have cash, you may use bitcoin ATMs to instantly fund your bitcoin wallet.
  • Exchange Platforms – you can buy or trade large amounts of bitcoin at the market rate on the existing exchange platforms.

Keep in mind that some methods of purchasing bitcoin are instant while others may take up to a few days. Also, there are exchange and/or transaction fees applied to any bitcoin purchase, so you should take this into account before performing any transactions. 

Buy Gold with Bitcoin

Once your bitcoin currency is reflected in your wallet, you can buy gold with bitcoin. Add your desired bullion items to your shopping cart, select ‘Bitcoin’ among the available payment methods and then proceed to checkout. After you’ve provided all the details about your order, you will be redirected to the BitPay checkout page where you can complete the payment by:

  • Scanning the QR Code (Scan) – the invoice is encoded in a QR code which you must scan with your Bitcoin wallet app. When the invoice is displayed in your app, just approve it, and the amount will be sent to Bullion Exchanges.
  • Sending a payment (Copy) – access your wallet, fill in the displayed Bitcoin address and exact bitcoin amount (BTC), and send the payment to Bullion Exchanges.

The invoice will be active for only 15 minutes to ensure exchange rate accuracy. After your payment is submitted, it will take up to 24 hours for your payment to gain the 6 confirmations on the Bitcoin network

Note: A confirmation represents a new block in the blockchain. Each block represents a set of new unique bitcoin transactions and every time a new block is built it means that the older blocks have been reconfirmed. Six confirmations (blocks) is the general recommendation for being 99.9% sure that a transaction won’t get canceled. 

Buy Precious Metals with Bitcoin at Bullion Exchanges

Bullion Exchanges is committed to offering the most convenient payment methods when purchasing any precious metals on our website. If you choose to buy precious metals with bitcoin, you will receive a 1.5% discount off the credit card price hence you’ll pay a lower premium than choosing to pay with a credit or debit card. For more details about our Payment Options, please read our Terms & Conditions or contact us by phone at 800.852.6884 or email - customerservice@bullionexchanges.com.