Laszlo Hanyecz became internet famous for making the first official transaction with Bitcoin when he posted on a forum that he’d give someone 10,000 Bitcoin (worth about $40 at the time) for two large pizzas. A forum user accepted, ordered him pizza from Papa John’s, and May 22, 2010, is now known as Bitcoin pizza day.
At the time, spending Bitcoin on a real-world purchase seemed like a win-win. After all, there wasn’t much use for the strange and new internet money. But crypto investors may be shaking their heads—almost 12 years later in March 2022, the Bitcoin used to buy that pizza were worth over $470 million.
Today, people may hesitate to spend Bitcoin because they worry about its value increasing. However, the increased popularity and general acceptance of Bitcoin has made it easier than ever to use Bitcoin. Even if merchants don’t accept Bitcoin directly, holders may be able to use a debit card that’s tied to their Bitcoin holdings. And for investors who bought Bitcoin while its price was low or believe it will drop again in the future, spending it could be appealing.
The rise of crypto payments
While many Bitcoin investors are “HODLing” (shorthand for buying and holding an investment), some people are ready to spend their Bitcoin. And there’s an ever-growing list of companies that are accepting cryptocurrencies, including Bitcoin.
In part, this is because of the rise in third-party crypto payment services that let companies accept crypto without having to build or manage the behind-the-scenes technology. For example, the crypto exchange Coinbase has a Coinbase Commerce product that can even work with small online retailers that have a Shopify or WooCommerce site. Once integrated, the website can accept Bitcoin, Ethereum, and several other coins as payment. BitPay is another option that works with several well-known brands.
Both buyers and sellers are taking a risk when spending or accepting Bitcoin because the currency’s price can quickly change and by a lot. But as crypto becomes more mainstream, this is a risk more people are willing to take. Some services also let business owners choose whether they want the payments to remain crypto or be automatically converted into dollars.
5 things you can buy with Bitcoin and other cryptocurrencies
Crypto payment services are enabling an ever-growing list of places where you can spend your Bitcoin and other types of crypto for goods and services. Here are five things you can buy with Bitcoin—some of which may be surprising.
It’s not just hipster cafes that are accepting cryptocurrency. Starbucks now lets people use Bitcoin by going into the Starbucks app, adding Bakkt as a payment option, and using Bakkt to reload a Starbucks card. In turn, Bakkt lets users pay with cryptocurrencies, gaming assets, gift cards, and loyalty or rewards points.
2. Diamonds, precious metals, and jewelry
An investor who has “diamond hands” is someone who holds onto their investment while its price swings. Their nerves are as strong as diamonds, and their investments will hopefully turn into a diamond under the pressure. But for investors who are ready to turn their Bitcoin into literal diamonds, there are several diamond, precious metal, and jewelry stores, including Reeds Jewelers and Birks, that accept Bitcoin as payment.
3. Anything on Overstock.com
Overstock.com is an online retailer that sells a variety of products, including home decor, furniture, jewelry, and pet supplies. In 2014, it became one of the first major retailers to start accepting Bitcoin. However, customers paying with Bitcoin must check out on a desktop computer—they can’t use the mobile website. They also can’t combine Bitcoin with other payment options, except for Overstock.com gift cards, in-store credit, or Club O rewards.
Expedia, one of the largest online travel agencies, accepted Bitcoin for several years. While it hasn’t been a payment method on Expedia since 2018, jet setters can use Travala.com to book travel with Bitcoin and dozens of other cryptos. Travala has a partnership with Expedia, which means users can still get access to exclusive deals and travel packages.
5. Electronics and entertainment
Online electronics and software retailer Newegg also accepts Bitcoin, as do AMC theaters, Dish Network, and Twitch. There are even several major sports teams, such as the Dallas Mavericks and Sacramento Kings, that let fans buy tickets with Bitcoin. Electric carmaker Tesla, run by crypto fan Elon Musk, accepts payment in the cryptocurrency Dogecoin for certain merchandise.
How to buy almost anything with crypto
Rather than relying on a company to set up and offer a crypto as a payment method, Bitcoin holders can take matters into their own hands.
For example, BitPay has a reloadable prepaid Mastercard debit card that can be loaded with Bitcoin and used at merchants that accept Mastercard. However, the Bitcoin is exchanged into dollars when it's loaded onto the card, not when the card is used.
Alternatively, Wirex has a prepaid Visa debit card that converts crypto to dollars when making a purchase or withdrawing cash from an ATM. Coinbase is also planning to launch a Visa debit card.
Electronic payments service PayPal is another option for users who hold cryptos in their PayPal account. They can then use the crypto while checking out with PayPal, but only if they have enough funds in a single crypto to cover the entire transaction.
How do returns work if you pay with crypto?
Cryptocurrency transactions can’t be reversed—that’s one of the features of the blockchain technology that underpins the systems. With this in mind, Bitcoin spenders should check a merchant’s return policy before paying with crypto.
Some merchants may allow returns and send back dollars or Bitcoin. However, the amount may be determined by the conversion rate when the purchase was first made rather than the current price. Other merchants may only offer gift cards for returns to customers who paid with crypto.
The bottom line
While cryptocurrencies may have originated as an alternative form of payment, crypto investors quickly found that they might be best viewed as a long-term investment or as a speculative digital asset. Cryptos’ volatile prices also means spending cryptos can be risky.
But that doesn’t necessarily mean buying and holding them forever. For any investor who wants to spend some of their crypto, there are now a variety of companies and services that make that possible.