Bitcoin is a digital currency increasingly accepted as a medium of exchange. Many businesses, including some leading global brands like Microsoft, are already accepting Bitcoin, which is driving the trend toward increased digital transactions. However, you cannot use Bitcoin everywhere since not all businesses take it.
The Bitcoin debit card came to provide a more convenient solution. A Bitcoin debit card lets you purchase goods and services even in places that do not accept Bitcoin. That’s because the Bitcoin debit card will automatically convert Bitcoin to fiat currency. And this sounds very simplistic. But you need to understand some essential details about the card.
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What is a Bitcoin Debit Card?
A Bitcoin debit card is simply a debit card for Bitcoin. It is just like any other debit or credit card you know. It is a prepaid debit card that requires you to have topped it up with some Bitcoin before using it. However, unlike conventional debit cards, the Bitcoin debit card will also include fees for converting Bitcoin to fiat currencies. Depending on your Bitcoin debit card provider, you may incur an annual and a small conversion fee every time you use the card.
You will get a Bitcoin debit card from a provider of your choice. There are many Bitcoin debit card providers, just like many credit card providers. Often, debit card providers operate in specific regions. So, you must first check which ones are available in your area.
Getting a Bitcoin debit card requires you to provide identity documents. And this may sound strange, considering that Bitcoin offers anonymity. Bitcoin debit card providers are registered businesses and must comply with anti-money laundering regulations. So, if you are uncomfortable providing your identity details, the Bitcoin debit card may not be for you.
Types of Bitcoin Debit Cards
Currently, the world has two types of Bitcoin debit cards. The first one is the virtual card. And this is for those who only spend their Bitcoin online. For example, if you are only going to use your Bitcoin in online trading, online games, and e-commerce platforms, then the Bitcoin virtual card is good for you. However, you cannot withdraw cash with it.
The plastic Bitcoin debit card is also a physical card with a chip and pin. You can use the plastic card in your physical and online transactions. For example, you can quickly swipe your card in a retail store to pay for your purchases. An additional advantage of the plastic card is that you can use it to withdraw cash from an ATM.
How It Works
If you have used a credit or debit card before, you already have a rough idea of how the Bitcoin debit card works. Like using your credit card to pay for items in a retail store, you do the same with the Bitcoin debit card. You can choose to swipe or provide your card details to make a payment.
For example, paying with your Bitcoin debit card converts your Bitcoin to fiat currency. So, the retail store will receive payment in cash. Your Bitcoin debit card connects to your Bitcoin wallet. So, whenever funds are low, you can load quickly.
The Bitcoin debit card bridges Bitcoin and the traditional financial system. The card automatically converts Bitcoin to fiat currency.