Buying Gold & Silver With Bitcoin
The online payment system Bitcoin has, since its launch in 2008, allowed millions of people to exchange payments without the involvement of any banks or credit card companies. The allure of Bitcoin stems not just from the ease and convenience of their transactions, but also from the form of currency it employs, the Bitcoin. The Bitcoin is the single, uniform currency within their system, and enables people from all over the world to make purchases without having to give any thought to current exchange rates. Naturally, this makes Bitcoin a popular means of payment for businesses that routinely have international dealings, including precious metal companies.
Using Digital Currency to Buy Precious Metals
However, before you commit to using this online cryptocurrency for Precious Metal purchases, it is important that you understand the potential risks and consequences of using Bitcoin. This is still an extremely new currency, and may be considered as still in the development stage. That means there are many attendant security and privacy issues to be resolved before Bitcoin might be considered a reliable payment format for the layman. As it stands currently, Precious Metals buyers may want to consider more traditional currencies for their Precious Metal purchases.
2-Step Set Up Process
Before you can make any purchases with Bitcoin, you must complete two preparatory steps. First, you’ll need to create a “wallet.” In the lexicon of Bitcoin, “wallets” refer to any website or application where customers hold their currency. There are several wallet choices listed on the Bitcoin Wallet Page. After installing one of these apps, you will be given a Bitcoin address, as well as a security key. That security key is your password and you must keep careful track of it. Bitcoin requires both pieces of information to either send or accept payments. The next step is to acquire some Bitcoin for your account. There are several ways to get Bitcoin—you can receive them in payment, exchange them with another person, or even earn them through “mining.” However, the easiest and most popular method of obtaining Bitcoin is simply to purchase them at a reputable Bitcoin exchange site. Be advised, however, that due to processing it can take as long as four business days for purchased Bitcoin to arrive in your wallet. Further, some sites charge an exchange fee based on the amount of money you are changing to Bitcoin.
Learn The Buying Process
Once you actually have Bitcoin in your wallet, you can begin shopping with them. Start by finding a reputable Precious Metal dealer that accepts Bitcoin payment. Shop as usual and proceed to checkout. When prompted to indicate a payment method, select Bitcoin. You’ll want to make sure that you have already logged in to your wallet app and that your wallet is opened to the payment submission page.
At this point of the transaction, the process will differ from previous purchases with traditional currencies. Your Precious Metals retailer will provide you with an invoice bearing a Bitcoin address, which you will indicate as the “recipient” on the payment submission page. In some cases, merchants will offer a QR code that you can scan with your wallet app just to make the transaction easy for you. Also on the form is a space where you must specify the payment amount. Note that you will be charged a transaction fee in addition to the cost of your merchandise. When you’ve completed the form, simply press, “send” and wait for a confirmation indicating the receipt of funds. It’s as easy as sending an e-mail, and anyone can comfortably use Bitcoin.
It is important that you understand there will be several different verifications, or “blocks,” for your payment to pass in order for the funds to be approved. The number of blocks depends wholly on the seller. Customers are asked to bear in mind that it can take a while for a payment to clear, as there can be as many as 6 blocks in a single transaction, each of which may take as long as 10 minutes to process. The total clearance time can range anywhere from 10 minutes to 60 minutes.
Advantages of Using Bitcoin
Bitcoin’s primary advantage is convenience. Because all transactions are online, customers are not subject to the location or business hours of a brick-and-mortar establishment. They can make their purchases at any time, and from anywhere. Customers also appreciate that Bitcoin is a single currency worldwide; it can be used anywhere around the globe without conversion.
Besides its convenience, many customers prefer Bitcoin due to its affordability. It is less expensive for merchants to process Bitcoin transactions than those made with PayPal or credit and debit cards. Many Precious Metals retailers will pass this savings on to the consumer.
Disadvantages of Using Cryptocurrency
Despite the convenience and affordability of Bitcoin, there are risks associated with using virtual cryptocurrency to purchase Gold and Silver. One such risk is the lack of privacy. Upon completion of a purchase, both the details of the transaction and the address of the individual making it are publicly and permanently recorded on the Bitcoin open ledger for anyone to see. A person’s Bitcoin address is the only form of anonymity that they really have when doing business through Bitcoin. Anonymity has been a selling point of Bitcoin, but its adopters must understand what a thin veil there is between users.
Another risk that customers assume when using Bitcoin is loss potential. Since its introduction, the value of Bitcoin has fluctuated significantly, more drastically and more frequently than any other form of currency. Frankly, it’s explosively volatile. Such volatility may rob customers of confidence and security, leaving them unsure as to what they hold in transactable funds. That can lead to frustration or embarrassment. Furthermore, the future viability of Bitcoin is unknown. Adopters have no real assurance as to what may become of their Bitcoin should the system of currency ever collapse or be disbanded. As a result, all financial experts agree that Bitcoin users should generally refrain from storing any more money in their Bitcoin wallet than they could afford to lose on a given day.
Perhaps the biggest risk factor facing Bitcoin users is the absence of buyer protections. At this time, all transactions made through Bitcoin are instant and totally irreversible, which makes this the payment method of choice for fraudulent purchases. While Bitcoin provides suggestions on how to prevent hackers from accessing your wallet, it unfortunately offers nothing in the way of compensatory action should the preventive suggestions fail. This means that if your account is used for a fraudulent purchase, the only way of even possibly recovering your funds is to contact the merchant directly to ask for a refund. This is particularly problematic if a hacker was doing business with a less-than-reputable merchant. In these cases, there is nothing either Bitcoin or the Bitcoin user can do to retrieve the stolen currency.
Buying Platinum, Palladium and Copper with Bitcoin
Because Bitcoin adopters is an ever-expanding group, many reputable Precious Metals retailers are beginning to accept Bitcoin as payment for Precious Metal purchases, including their offerings in Copper, Platinum and Palladium bullion. The process of buying Platinum, Palladium and Copper with Bitcoin is precisely the same as with any other Precious Metal. Of course, there will be a transaction fee in addition to the cost of the merchandise. Customers are also warned that when using Bitcoin to pay for Platinum or other Precious Metals, they are exposing themselves to the same privacy and security risks attendant to any other Bitcoin transaction.
Buying Gold & Silver with Bitcoin at APMEX
APMEX is excited to offer a Bitcoin payment option to our discerning clients. You will now have a Bitcoin payment option available at checkout. Those who use Bitcoin for their transaction will receive a 4% cash discount, just as those who pay by wire and check do. To learn more about our Bitcoin option as well as our other accepted forms of payment, please visit our Payment Methods page or contact us at 800.375.9006.