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One of the frequently asked questions in cryptocurrency training courses for beginners is ‘How do I use Bitcoin?’
After people understand how cryptocurrencies work, go through the trouble of setting up a trading account and buying their first bitcoin, they want to know how to actually use it.
This is an interesting question, and the answer actually depends on why you bought Bitcoin in the first place.
If you are a ‘hodler’ (someone who plans to hold coins as a long-term investment and store of value), this question obviously does not apply.
However, if you want to become more active in cryptocurrency and understand its destructive capabilities, it is important to know how to use your coins.
Bitcoin usage
The most common ways you can spend Bitcoin are:
One. global transactions. Bitcoin’s borderless nature means it is ideal for global payments. Individuals and businesses can use cryptocurrencies to send and receive funds without the need for traditional banking intermediaries. This reduces costs and transaction processing times.
2. actual payment. More and more stores, restaurants, and bars are accepting Bitcoin as payment, but it’s safe to say that the number is still small. Check out our guide Companies that accept Bitcoin.
three. Smart contracts and decentralized finance (DeFi). Cryptocurrencies and the underlying blockchain technology have opened up a world of seamless financial products that do not require the intervention of mainstream financial institutions. DeFi is considered a major disruptor in the industry and is being deployed across various financial sectors.
4. charity donation. Despite what many people may think, many large charities now accept donations in the form of Bitcoin because transactions are transparent and traceable.
5. Tokenization of Assets. Bitcoin’s blockchain can be used to tokenize real-world assets. This allows valuable items such as cars, art, and real estate to be divided into shares, opening up new fractional ownership investment opportunities for individuals who may not be able to afford the assets outright.
How to use my bitcoin
Spending your newly acquired cryptocurrency is very easy, regardless of whether your coins are stored on an exchange, a self-custodial wallet app, or a hardware wallet.
All you have to do is get the receiving address from the business or individual you want to send coins to and paste it into the app (make sure you use the correct address!).
You then agree to the transfer fee, click send, in most cases confirm the transaction using 2FA, and voila – your coins are on their way.
The time it takes to reach your destination depends on network usage and fees charged for transactions.
However, in most cases the cryptocurrency arrives within minutes and the transaction is complete and irreversible.
How has Bitcoin’s usefulness evolved?
It is fair to say that Bitcoin has strayed from its original purpose of being a decentralized digital currency.
Although it remains a medium of exchange, its use cases have now expanded much further, with many seeing it as ‘digital gold’.
Conceived in 2009, Bitcoin continues to prove its relevance and versatility to this day, and as the cryptocurrency ecosystem matures, applications for the cryptocurrency OG are likely to expand further.