A Beginner's Guide to Bitcoin Payments: How to Shop with Bitcoin On-Chain and Lightning
In today's digital age, the world of online commerce is continually evolving. One of the most notable advancements in recent years is the widespread adoption of cryptocurrencies like Bitcoin as a new payment method. Bitcoin offers a secure, efficient, and decentralized way to conduct transactions, and it's becoming increasingly popular among both merchants and consumers. In this article, we'll provide beginners with a step-by-step guide on how to use Bitcoin for purchasing products on websites, covering both Bitcoin On-Chain and Bitcoin Lightning options.
What is Bitcoin?
Bitcoin is a digital cryptocurrency that operates on a decentralized ledger called the blockchain. It enables peer-to-peer transactions without the need for intermediaries like banks. Bitcoin has gained immense popularity due to its potential for financial privacy, security, and its ability to facilitate borderless transactions.
Setting Up a Bitcoin Wallet
Before you can make purchases with Bitcoin, you need a Bitcoin wallet. Think of it as a digital equivalent of your physical wallet, but designed for bitcoin. Here are a few popular wallet options for beginners:
Trezor - this is the hardware physical wallet. One of the most secure ways to hold and spend your bitcoin.
Phoenix for iPhone or Phoenix for Android - this is software lightning bitcoin wallet. This is great and fast option for smaller transactions (let's say up to 500EUR) .
Once you've chosen a wallet, follow the wallet provider's instructions to set up your account and secure your private keys!!!. These keys are crucial for accessing and managing your Bitcoin. Be sure you have your private keys (in form of seed - 12 or 24 words stored in secure place).
Making Payments with Bitcoin On-Chain
Bitcoin On-Chain transactions are the traditional way of sending and receiving Bitcoin. Here's a step-by-step guide on how to use it for online shopping:
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Select Your Products: Visit the website where you want to make a purchase. Add the desired items to your shopping cart.
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Checkout: When you're ready to pay, proceed to the checkout page. Look for the option to pay with Bitcoin BTCpay Server.
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Generate an Invoice: The website will provide you with an invoice that includes the payment amount in Bitcoin and a unique payment address (a long string of letters and numbers). This is where you'll send your Bitcoin.
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Open Your Wallet: Open your Bitcoin wallet (we offer bitcoin lightning option for orders up to 50EUR, both on-chain and lightning options for orders between 50 - 500EUR and over 500EUR only on-chain bitcoin) and select the option to send Bitcoin.
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Enter Payment Details: Copy and paste the payment address from the invoice into your wallet's "recipient" field.
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Confirm and Send: Review the transaction details carefully to ensure accuracy. Once you're satisfied, confirm the payment. Your wallet will sign the transaction and send it to the Bitcoin network.
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Wait for Confirmation: Bitcoin on-chain transactions require confirmation from the network, which may take a few minutes to an hour depending on a miners fee you will select. Once confirmed, your purchase is complete. In case of paying via bitcoin lightning the payment will be processed within seconds the same way as credit cards do.
Making Payments with Bitcoin Lightning
Bitcoin Lightning is a second-layer scaling solution that enables faster and cheaper transactions. Here's how to use it for online shopping:
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Set Up a Lightning Wallet: Some wallets, like Phoenix, Wallet of Satoshi (custodial wallet), support Lightning payments. Install one of these wallets.
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Fund Your Lightning Wallet: Transfer some Bitcoin from your On-Chain wallet to your Lightning wallet to fund it.
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Choose Lightning at Checkout: When you're ready to pay, select the Lightning option at checkout.BTCPay Server will offer you this option up to value of 500EUR.
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Scan the QR Code: The website will generate a Lightning invoice with a QR code. Open your Lightning wallet and use its QR code scanner to scan the invoice.
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Confirm and Pay: Review the payment details, and if everything looks correct, confirm the payment. Lightning transactions are nearly instant.
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Transaction Complete: Once the payment is confirmed, the merchant will receive it, and your purchase is complete.
Using Bitcoin for online shopping can be a secure and convenient way to make payments, and with options like Bitcoin On-Chain and Lightning, you can choose the method that suits your needs best. As you gain more experience, you'll become more comfortable with the process. Happy shopping!