How Do I Pay Someone with Bitcoin?
Have you ever wondered how buying Bitcoin works? The original cryptocurrency isn’t only a hot topic in the financial sector but also among friends and family over dinner. People want to know who is buying Bitcoin and whether buying Bitcoin is a safe investment.
However, even if you decide to invest in Bitcoin, there’s a learning curve to the entire process. You have to figure out how to buy Bitcoin and how to pay with it.
These are the most critical steps when starting with a cryptocurrency. In this article, we'll tell you more about Bitcoin transactions and answer the fundamental question: how does buying Bitcoin work?
Understanding Bitcoin Transactions
Is it still worth buying Bitcoin? Some would say that it’s not as the price of Bitcoin transactions has steadily risen. But every time you have to pay someone with Bitcoin, you will need to pay this transaction fee – there is no way around it.
It’s not all black and white, however, and your fee can be lower if you can wait longer for Bitcoin miners to verify it. The Bitcoin transaction fee is in direct correlation with the speed of the transaction.
If the person you’re paying with Bitcoin is not in a hurry to receive the payment, you can choose a lower fee. You’re the one who is buying Bitcoin from the crypto exchanges, setting up a Bitcoin wallet, and transferring the funds to another person’s wallet.
Hence, it's crucial to use a non-custodial wallet instead of a hosted wallet, as it allows you to customise the fee. Finally, it's important to point out that a price that's too low can result in the transaction getting "stuck."
If that happens, your only option is to wait to regain access to your funds when the mempool rejects it. But is Bitcoin a safe investment even if the transactions get stuck? A stuck transaction doesn't make Bitcoin unsafe; it's just one of the features of the Bitcoin blockchain.
How Does Buying Bitcoin Work and How to Send Funds?
To illustrate how to pay someone with Bitcoin, we'll use Coinbase as an example. It's one of the biggest crypto exchanges globally, and it's widely used in the UK.
However, if you’re wondering how does buying Bitcoin work on other platforms, the answer is that all the steps are pretty similar to the following:
- Go to Coinbase and set up your account.
- On your Dashboard, click on the “Pay” button.
- Enter the amount of Bitcoin you’re sending to another wallet.
- Add the Bitcoin address, email, or phone number of the person you’re paying.
- Click on “Continue” followed by “Preview.”
- Click on “Send on the blockchain” and follow the prompts on the screen.
Coinbase offers users a non-custodial wallet where you can choose a slow, normal, or fast transaction fee. Furthermore, it’s crucial to remember that all cryptocurrency transactions are irreversible. If you’re a beginner, make sure to take your time entering all the information when paying.
Bitcoin FAQs
Is Buying Bitcoin Legal?
The heightened presence of Bitcoin in mainstream discourse can make us forget to ask, “Is buying Bitcoin legal?” Cryptocurrencies, including Bitcoin, are not considered legal tender in the UK.
However, they were confirmed as property, and it's perfectly legal to buy or sell them. But who is buying Bitcoin in the UK?
The number of residents rushing to invest in crypto is growing fast. There are over two million crypto investors in the UK, and the majority of them are men aged 35 and older. So, while some ask is it still worth buying Bitcoin, others see it as an investment in the future.
Does Buying Bitcoin Make You Money?
Apart from wondering how does buying Bitcoin work, it's natural to question does buying Bitcoin make you money?
Many in the Bitcoin community believe crypto will change the world, while others are more focused on profits. The most straightforward answer to does buying Bitcoin make you money is that it depends.
It has made a lot of money for many investors, but others have also lost a great deal. Bitcoin's value is volatile so having the right investing strategy is crucial.
Are Banks Buying Bitcoin?
The resistance towards the adoption of Bitcoin in the financial sector has been well documented. But we can get a better measure of Bitcoin's success by asking, "Are the banks buying Bitcoin?” Interestingly, many financial institutions have rushed to get a piece of the booming crypto market.
For example, Standard Chartered, based in London, has invested hundreds of millions in various crypto assets, and many other international financial institutions have done likewise. So, it’s less a matter of are banks buying Bitcoin but more how much of the market they are willing to take over.
Is Buying Bitcoin a Good Investment?
While your initial Bitcoin purchase can be as low as £20, it’s perfectly reasonable to ask if buying Bitcoin is a good investment. Some might argue that it all depends on which day you ask. The volatility of Bitcoin has caused many headaches to investors.
The issue with Bitcoin is that a seemly random occurrence can make the price plummet or skyrocket. For example, when a corporation announces that it won’t receive Bitcoin payments anymore, the price can drop overnight.
That can lead many investors to ask whether buying Bitcoin is a safe investment? For the majority of crypto enthusiasts, holding or lending Bitcoins pays off pretty well.
But the most important factor in determining whether buying Bitcoin is a good investment is, whether you believe in the future of cryptocurrency. Opinions differ on where Bitcoin and crypto are going, but it's almost certain that it's here to stay.
Buying and Paying with Bitcoin
UK crypto investors should enjoy the fact that they're investing in an amiable crypto market. While there are no guarantees when it comes to crypto, and with many left wondering, is it still worth buying Bitcoin, it remains easy to buy and sell the coins.
Setting up a crypto exchange account takes no more than a few minutes, and you could be paying with Bitcoin in no time.
The entire process is legal, as Bitcoin is considered property in the UK. However, whether investing in Bitcoin will pay off depends on many variables, including the stability of the price and your investment strategy.