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January 04, 2014, 11:04:18 PM |
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News is abound with large companies gearing up to accept Bitcoin. As supporters and consumers we should also gear up for actaully making purchases with Bitcoin. Probably one of the biggest things stopping BTC holders from paying for purchases with Bitcoin is that they don't want to lower the amount of bitcoin they hold and thus they hord their bitcoin. Well now is the time to put into action a simple solution so that you can pay with Bitcoin without having to lower the amount you are "investing." I will use Coin Base for my personal example but you can use any similar method that works well for you.
With Coin Base I have setup an automatic debit from my checking account to buy Bitcoins. The coin being purchsed are for bitcoin spending. To date I have mostly purchased gift cards with Gyft and then used those at checkout time. I now have a routine of checking to see if Gyft has giftcards for any purchases I need to make and I have come to establish an amount that I know I will spend monthly. To reduce risk of price flucuations to a degree I have setup the recurring purchase to take place weekly and for the most part I no longer worry about BTC price changes. The combination of gift cards and weekly BTC purchases really smooths things along. Now I hear that Net Flix may start to accept bitcoin and as an avid user of their services I am excited because if they do that will be a recurring transaction that I can divert to Bitcoin.
Anyone who looks into the process I am doing may realize that there are some "fees" involved with getting money into BitCoin and transaction fees and BTC price changes in the short term you may have a bit lower "spending" power then just paing with your "card" or cash... but as I said above it really does start to even out..
As I have progressed a more risky approach that I have taken is to move some of my monthly bills and recurring payments into BTC for a month at a time. Essentailly when it comes time to pay those items I simply transfer the funds back into my checking account. I do this simply as a way to boost BTC holdings and realize any price increases in the short term. Bear in mind though that should you implement this idea be cautious.. should BTC drop you may wind up loosing money. Don't do this if you cant weather the swings and accept the risk. Since I always pay more than the minimum due on credit card transaction I simply move the minimum credit card payment amounts into BTC each month and then back out when it is time to pay them.
On the side of non-bill items that are recurring I have, for example Net Flix, to date I have simply added subscription type services to the credit card minimum that I mentioned above because those items are currently being paid by credit card. However, If the rumor that Net Flix is preparing to accept BitCoin it may just be a matter of time before I transtition that subscription to a direct BitCoin payment. In the end it has taken a bit effort on my part to ensure that I maintain a minimum of 1 months worth of BitCoins to cover 1 month worth of "obigations" and I am now working to get to 2 months worth. In the end my goal is to have 6 monts worth of all monthly spending and obligations in bitcoins just like how they say you should have 6 months of your monthly income in saveings. Right now though that 1 month buffer feels pretty good. So good in fact that I dont even worry about BTC prices. Sure there may be another BTC crash but if that happens the worst case scenario is that I can just transtition to paying all those items traditionally until the price rebounds.
Bit Coin is now just a cog in my overal spending process and is allowing me to let my money work for me. Essentailly I have been able to up my BTC holdings quite a bit by cycleing as much as I have been conforatble with into BTC for a period of time. I am not confident enough to put my mortgage and car payments into BTC each month but once I hit that 6 months range you can be sure that those will go into the mix as well.
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