What are Bitcoin debit cards and where all you can use it?

Highlights 

  • Bitcoin debit cards are prepaid debit cards that allow user to top-up their card with bitcoins, which are then converted into fiat currencies to make purchase easier.
  • There are mainly two types of Bitcoin debit cards: Plastic Debit Cards and Virtual debit Cards.

Cryptocurrencies were introduced with the aim of changing the world and to fix the problems of traditional currencies by putting the power and responsibility in the currency holders’ hand rather than fixed authorities.

But they have not yet achieved their original objectives just because of the liquidity issue. Liquidity means how quickly and easily cryptocurrencies can be converted into fiat or other goods and services. Still cryptocurrencies are being traded online and the expectance of them is negligible across the world.

So, the fact is bitcoins and other cryptocurrencies are not similar to fiat currency as you can’t simply walk in a store and buy goods in exchange of cryptocurrency.

To solve all these problems with cryptocurrencies, Bitcoin debit cards were introduced, these cards allow customers to purchase any goods and services for their daily needs in exchange of cryptocurrencies and making them more liquid.

What Are Bitcoin Debit Cards?

Bitcoin debit cards are prepaid debit cards, which allow customers to recharge their cards with their bitcoins, which are then converted into fiat currencies for making transactions easier.

Some Bitcoin cards hold recharge in BTC and convert it into fiat only at the time of a transaction and some other cards convert it into equivalent fiat as soon as you top it up. While others are simply linked to user’s fiat accounts where you can move to and fro between crypto or fiat as much as they like.

Bitcoin debit cards allow user to shop online and offline while using their bitcoin assets in exchange. The market price of the bitcoin at the time of purchase is used to convert them to fiat and then used to settle the transaction.

As most Bitcoin debit cards are linked to Visa or MasterCard, which are prominent payment processors used across the world, making it simple to find merchants and spend with your card. After a user buy Bitcoin and create a wallet, they can simply connect the debit card with your wallet and convert coins on-the-fly.

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What Does A Bitcoin Debit Card Looks Like?

Bitcoin debit cards looks similar to any other debit cards. They consist of following information printed on them:

  • Card Number
  • Cardholder’s name
  • CVV/CVC number
  • Expiry date
  • Processor name- VISA or MasterCard
  • Issuer company name

Types Of Bitcoin Debit Cards

There are mainly two types of Bitcoin debit cards:

  • Plastic debit cards
  • Virtual debit cards

Plastic Debit cards

These cards are used to make payment for both online and offline purchases anywhere VISA or Master Cards are accepted. Through these cards user can withdraw cash from any ATMs across the world, which can makes it easy for people who travel, live or study abroad.

Plastic Bitcoin Debit card has a chip and a PIN number wit help of it users can swipe in a store or withdraw cash from ATMs. User can even enter the relevant information online for making an online purchase.

Virtual Debit cards

These cards are only used to make online payments anywhere VISA or Master Cards are accepted. However, through these cards user can’t withdraw cash from any ATMs and can’t be used by people who travel, live or study abroad.

Virtual Bitcoin Debit card can’t be used offline and it doesn’t have a chip which can be swipe anywhere. However, it can be used for all types of online purchase by entering all relevant information: card number, CVV number, and expiry date.

Each Bitcoin Debit card provider has different services and charges.

ALSO READ: Will current changes at crypto exchanges influence bitcoin prices?

Advantages And Disadvantages of Bitcoin Debit Cards

Advantages

As we know, Bitcoins have a long way to go and currently handful of merchants across the world accepts bitcoins directly. But VISA and Master cards are accepted by all the merchants around the world.

This is the reason why having a VISA or Master Card linked-bitcoin debit cards makes difference and makes it easy to use your Bitcoin assets for purchase.

  1. Allow users to make payments without any hassle
  2. Low to 0% Annual Fees
  3. No foreign exchange fees
  4. Cashback Rewards
  5. Can be carried virtually/ physically
  6. Allow users to access different currencies with one card.
  7. Allow users to withdraw fiat currencies of different countries from ATMs anywhere.
  8. Allow instant money transfers to anyone in the world.

Disadvantages

Though Bitcoin debit cards have many advantages there are also some disadvantages.

The biggest challenge for Bitcoin debit cards is the high price volatility of digital currencies, reducing the users’ purchasing power. When you are topping up your debit card with altcoins, price volatility is even more of an issue. Users could convert your bitcoin into a stablecoin before topping up your card to ensure that volatility will not be an issue.

There is also a degree of centralization risk as users need to store your funds in a company-issued digital wallet, which means you need to trust the company with your money. Therefore, users need to make sure you choose a reputable bitcoin debit card issuer that has taken all the necessary steps to protect your funds.

Depending on user’s jurisdiction and how they acquired digital currency, spending it may result in a taxable event. Therefore, users need to look into the potential tax implications for getting digital currency converted into fiat currency, which depends upon on the country before making bitcoin card purchases.

ALSO READ: Bitcoin vs Ethereum: Their journeys so far

How Bitcoin Debit Cards Work

You can use a Bitcoin debit card in many ways

  1. You create a Bitcoin wallet.
  2. You buy Bitcoin from your preferred exchange.
  3. Next, you apply for a Bitcoin debit card.
  4. Once you’re approved, you will connect your Bitcoin wallet to the application or desktop interface that your Bitcoin debit card service provides.
  5. Then, you will use your Bitcoin wallet to fund your prepaid card.
  6. Finally, after fees are applied, your prepaid card will instantly be topped up with fiat currency like USD or Euros.
  7. You can now use your prepaid card wherever credit cards are accepted!

Some of the best Bitcoin Debit Card in UK

  • ClubSwan
  • Wirex Bitcoin Debit Card
  • MCO Visa Card
  • Coinbase Crypto Debit Card
  • CryptoPay
  • Revolut Bitcoin Debt Card
  • AdvCash
  • Monolith

 

Conclusion

Cryptocurrency credit and debit cards are definitely worth using. They offer exciting possibilities for businesses, cryptocurrency enthusiasts, and for people who are having second thoughts about crypto in general.

While there is a long, long way to go for Bitcoin debit cards, the overall ecosystem will keep on improving as more and more cryptocurrencies are joining the race.

In future, we will witness cheaper fees and easier usability in this space as the competition gets larger every day.

Also, it’s not an exaggeration in saying that with the advent of such debit cards, virtual currencies like bitcoins are finding meaning for everyday users in their everyday lives.

ALSO READ: Which 10 global conglomerates are accepting Bitcoin as payment option?

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