The emergence of exchanges has ushered in a new wave of demanding bitcoin enthusiasts who want to buy bitcoin with credit card or debit card.
Many of these buyers don’t know how to conduct a traditional purchase and instead fork over cash to transact via a company like Coinbase or BitPay. While this method offers a money-making opportunity for online-only merchants, it also exposes new users to risks when selecting the technology or interface they use. In order to mitigate this risk you can perform administrative duty by learning everything you need to know about the best exchanges for buying bitcoin with a bank card such as debit or credit card. You can do so by reading this guide. In fact, the newest tech is inherently untrustworthy and has created new anti-marketing risks and liabilities.
Given the potential problem this poses to consumers, I loved the idea behind my CounterParty: Bitcoin fundraising event that recently launched in conjunction with the Index on Censorship & Cyber Crime.
What’s The Problem?
People have seen the headlines. Digital currencies like bitcoin are not mainstream. But instead of discouraging newcomers to digital currency or shunning them, I see them as opportunities to raise cash for good ideas and good causes.
So what’s the problem? The problem is that bitcoin transactions are susceptible to fraud and are made possible only by untrustworthy technology. If this project doesn’t educate the audience, it might succeed in horrifying potential users. People might think that using bitcoin is akin to buying a stolen car, but the reality is that these transactions are made by, for, and about ordinary people through services like Coinbase, BitPay, and GoCoin. As a result, institutional buyers (financially savvy ones) are skimming the opportunities, using these services to move capital quickly and inexpensively.
I think the first step to fixing this is to come clean. Bitcoin’s technology is called blockchain, and it was created and promoted with the express purpose of improving the world’s privacy and security. This technology, more than any other, gives ordinary people the ability to keep transactions safe and private, supporting users’ rights to financial privacy and combating money laundering and terrorist financing.
But crypto entrepreneurs like to promote bitcoin and cryptocurrencies as a quick, easy, and anonymous way to make money. In practice, however, the actual benefits are often outweighed by risks and, as a result, meet only a tiny fraction of real financial need.
How To Protect Your Customer
Choice over privacy is important, but in practice, the benefits aren’t compelling enough for people to opt-in. Instead, those who must choose are forced to make a trade-off. For example, you could agree to accept lesser limits on transactions, but at what cost in your customer service? Options like “zero transaction fees” and “unlimited confirmations” make this trade-off inevitable when people must trade-off higher levels of security for lower levels of convenience.
It’s also likely that people don’t understand the risks and benefits of this type of technology.
This form of investing is not recommended by the SEC and has been criticized by the clearing house industry, which wants bitcoin to be traded and settled by hand rather than electronically. That said, bitcoins can be purchased with credit cards and debit cards.
Many bitcoin debit card users expect to soon be able to use their cards to purchase bitcoin and transfer their funds directly to the sellers of the merchant who accept the bitcoin. However, there are nonetheless stringent laws on debit card users which prevent this. Many bitcoin debit card users are faced with two dilems:
buy with cash: the recipient of the bitcoin may wish to keep the bitcoin or purchases may be taxable.
transact almost instantly: the recipient of the bitcoin may wish to transfer the bitcoin almost instantly and may have insufficient funds or it may be costly to transfer the funds to an exchange.
While it makes sense to utilize a bitcoin debit card on a personal basis such as to load a wallet on a cell phone or carry around for accessing it at coffee shops or events, unfortunately utilizing such a credit card for transaction purposes can be a trap door that results in costly or illegal transactions. It is therefore necessary for bitcoin debit card users to ensure they open up their bank accounts and report all relevant transactions to avoid potentially being accused of illegal activities.
Hint: After filling out the bitcoin transaction form (See below), pay your issuer $1, and scan the QR code on the receipt. Simply submit the information you would have submitted to transfer money directly to an exchange and spend your bitcoin fast.
HOW TO USE BITCOIN DEVICES FOR TRANSACTIONS?
When topping up a bitcoin debit card, most banks are charging very high interest rates. Google the best exchange website to make sure the interest rate you are charged is not more than a 15{cb64ef71a014013af9e5a85b0ad93ca8fb80cf72bf5f18ad91bafbaa457da564} over the credit card rate you are paying.
Examples of bitcoin debit card approved banks include American Express, Bank of America, Chase, Capital One, Discover, JCPenney, Bank of Nova Scotia, municipal banks, and credit union networks. You can walk out of any bank and see dozens if not hundreds of different bitcoin “receipts.” Typically, the bulk of these bitcoin transactions make up the flow of income for the banking institutions. When shopping with bitcoin, be sure to search carefully!
Also, be sure to select the currency that you would like to transfer to before selecting the bitcoin “refund” options. Different options allow for repayment of both initial and accrued charges.
Last, if you have a balance on your bitcoin debit card at the time you make the transaction, be sure to call your bank immediately to alert them that you have initiated the transaction.
