So you’ve been hodling and now you want to spend your coins. We know, the number one problem most of us have is what to do with all this money? Don’t worry, we’re here to help. Assuming that you care about privacy and have CoinJoined all those coins, let’s map out all the different ways to spend your sats without turning it into cold hard cash.

Keeping it BTC:

The first and easiest way to do so is to keep it in Bitcoin. There is a long list of companies that accept Bitcoin, but as is always the case, read the fine print. Many of them only accept Bitcoin in specific countries or at specific locations so it’s typically not as easy as just walking into your local supermarket with your Bitcoin wallet.

There’s a lot of talk about Paypal and Square enabling Bitcoin transactions. Although this is promising and certainly indicates its mass adoption, if you already own some Bitcoin, you can’t use these services (yet). The value these companies offer is that they make it easier for people new to Bitcoin to easily purchase and even spend Bitcoin. It’s just that they’re not exactly letting you own the Bitcoin you purchase. Yes, it’s in your account and it’s super unlikely that they will steal it from you, but for the purposes of what we’re wanting to accomplish, you cannot deposit your CoinJoined coins into these types of services...yet (elbow nudge @Jack Dorsey).

Bitcoin Friendly Banks:

There are many Bitcoin friendly banks to choose from. Each of them offer different perks and charge slightly different fees for using their services. The most important things to consider are overall cost, insurability and ease of use.

Ease of Use: Using a Bitcoin friendly bank is one of the simplest methods to buy things with your CoinJoined coins. Almost everyone uses a bank issued debit card to purchase just about everything in their life. And almost all of these debit cards enable the account holder to purchase things in any currency at the instant exchange rate with minimal fees. So if you open an account with banks that accept Bitcoin like Ally or Wirex, you can easily transfer your Bitcoin into fiat currency and then spend this money through your debit card.

Insurability: Although most people assume that almost all banks are backed by the government of the country they are based, the main reason Bitcoin began was because of a lack of trust in governments, banks and the other financial institutions that make up our current monetary system. Additionally, Bitcoin is a borderless digital currency. The potential for an ambitious and tech savvy web developer to set up a very convincing online bank based out of a very unregulated 3rd world country is real. Banks can and have failed. This is why insurability is an important factor to consider.

Some banks, like Revolut offer refunds on purchases or returns on items bought which stores don’t accept. They even have travel and purchase insurance available to their customers, but this comes at a cost in the form of monthly fees.

Fees: If there’s anything banks and lawyers are known for, it’s their fine print. This is why you should consider not just the up front fees banks charge, but the additional fees they might tack on to each deposit, transfer or withdrawal.

Source: https://www.changeinvest.com/legal#fees-and-limits
Example of the many fees in banking and finance

The possible fees are endless and very creatively labeled, but despite all the euphemisms the end result is that your hard earned sats are being slowly bled from your account into theirs. Especially in the case with Bitcoin friendly banks, the fees can add up very quickly.

Remember, when trying to spend Bitcoin, you’re exchanging a currency and there are many sneaky fees involved in that process (read on to learn more about these fees).

In the end, do your research and see which account is best for you. Some accounts reward international travelers more, some reward shoppers more, while others reward money hoarders more. The key is knowing how you’re going to use the account and then finding the account that you can utilize in the most economical way.

Currency Exchanges:

Assuming you already have a bank account, you may want to just use an exchange like Kraken or Coinbase to convert your money into fiat and then deposit it into your bank account. The benefits to doing this is that you can probably save more money than if you went with a Bitcoin friendly bank. The drawback is that there will be more steps involved and the process could take a bit longer.

You also need to check which currency these exchanges are willing to transfer your currency into. If you’re looking to spend money in Euros or Dollars, then you shouldn’t have any problems, but if you’re wanting to convert your money into Georgian Lari or Albanian Lek, you may have to add another expensive step.

Many exchanges charge a commission or a flat fee, but they also have a spread, or the difference between the amount an exchange or bank pays you to buy your currency and the amount it’s selling your desired currency for. The spread can vary significantly from one exchange or bank to the other and that’s why you should do your research. The best rate is the interbank exchange rate. This is the spread offered to banks when exchanging currencies and as is always the case, banks get the best rates. The spread still exists here, but it’s the cheapest you will find. This is why if you’re exchanging currencies, pay attention to all of the ways they might charge you. Whereas some exchanges don’t charge a fee or a commission, their spread may be grossly inaccurate/exaggerated. In the end, you could be paying much more than if you went with an exchange that has a flat fee, but a much smaller spread.

Photo by Marga Santoso on Unsplash
Currency exchange rates

Fortunately, some exchanges allow you to determine the buy/sell rate you’d like to exchange your currency for. Much like trading stocks, you can determine the price that you’d like to offer your BTC for ____ fiat currency and just wait until someone is willing to pay that price. The drawback is that you can’t determine how long it will take to find a buyer for your BTC. So if you’re on a deadline to make that Ebay bid, you probably don’t want to go this route.

Other:

Lastly, there are some non-custodial exchanges for the privacy focused individual who; let’s be honest, is probably you if you’re reading this blog. Bisq is the most popular decentralized exchange, but it’s a little more expensive than the centralized exchanges. You can also use a peer to peer exchange to transfer money directly into your bank account, but as mentioned in the previous article, there are risks involved with this.

Bitcoin adoption is advancing at an ever increasing rate and now that all this has been written out, more and more channels will open up in the future. As advancements continue to be made like the Lightning Network and Taproot, Bitcoin’s fungibility should only improve. Although the timing is impossible to predict, it’s not unrealistic to think that paying with Bitcoin will be as simple as paying with your card or phone today. Until then, all we can do is to continue demanding these services to perpetuate their need.