Bitcoin, the first cryptocurrency ever created, was developed to challenge dominant fiat currencies like the US dollar, euro, and pound sterling. The idea was to have a fully decentralized currency whose supply was not influenced by a single person or organization. Over the years, the number of cryptocurrencies has grown to over 20,000, and their market cap soared to over $3 trillion at its peak.
Shopping with cryptocurrencies
The role of cryptocurrencies in commerce has been relatively limited in the past decade because of their volatility. Many companies are afraid of accepting a digital coin that could lose value within a few seconds. For example, after soaring to $67,000 in November 2021, Bitcoin crashed to $15,000 by November 2021. Stablecoins solve the volatility problem by being pegged to a fiat currency.
Cost is another challenge. At times, the cost to send and manage crypto transactions tends to be higher than fiat currencies. These transaction costs can narrow a company’s margins. Some different cryptos like Bitgert and Avalanche, have solved the fee challenge by dramatically reducing transaction costs.
Further, many companies have security concerns regarding crypto. These fears became real after the collapse of FTX, Celsius, and Voyager Digital. However, many players in the crypto industry have introduced features to boost their security.
What can you buy with crypto?
Some companies have started accepting cryptocurrencies. Some of the top items you can buy with crypto are:
Elon Musk, the richest person on earth, has been one of the biggest advocates for cryptocurrencies. In 2021, he supported Tesla’s $1 billion purchase of Bitcoin. He has also been a big supporter of Dogecoin, the biggest meme coin in the world. In January 2022, Tesla announced that it would start accepting Dogecoin in its merchandise store.
Non-Fungible Tokens (NFTs)
Non-fungible tokens are digital assets that are secured by blockchain technology. It uses a unique identifier that cannot be altered. Most of these assets are pieces of art that can only be bought using cryptocurrencies like ETH, SOL, and AVAX. Some of the biggest NFT platforms where you can buy NFTs are OpenSea, LooksRare, and Magic Eden.
Flight tickets and hotels
It is possible to book hotels and flights using cryptocurrencies. Several mainstream companies have started accepting popular coins like BTC and ETH. These firms do this by partnering with payment processors like Alchemy Pay. Expedia and Travala are some of the most popular booking sites that accept cryptocurrencies. Travala has even launched its own crypto, AVA, which people can use to pay for hotels and earn rewards.
General retail items
Many companies have partnered with payment processors to enable people to shop using digital coins. Overstock, a leading home goods e-commerce store, was one of the first companies to accept BTC. Other popular retailers that accept digital coins are Etsy and Rakuten. Most importantly, many Shopify sellers have enabled crypto transactions.
Some car dealerships, especially those that deal with luxury car brands, accept cryptocurrencies like BTC and ETH. Most of these firms accept digital coins to target young people who have made a fortune in the crypto industry. Similarly, many real estate agents have started accepting cryptocurrencies as a way of attracting affluent shoppers. Some property companies, like Cryto Real Estate, accept both fiat and crypto.
Cryptocurrencies have some advantages over fiat currencies. For example, coins like Monero, Dash, and Zcash have advanced privacy features that make transactions anonymous. It is also convenient to use cryptocurrencies in countries where inflation is rampant. Additionally, using some cryptocurrencies can be much cheaper than using fiat currencies. Finally, cryptocurrencies can be easier to use when making cross-border payments.