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In this article, you will learn how Bitcoin works, how to pay with Bitcoin, and how you can do it from your StashWave wallet. People's ongoing preference for bitcoin shows that they are eager to exchange their fiat currency for digital money. All of this is due to the fact that Bitcoin has a far lower transaction cost than bank transactions. Bitcoins are politically independent thus there are no government-imposed laws and restrictions. As a result, transaction costs are significantly lower. Bitcoins have a limited supply, making them scarce. It indicates that the value of bitcoins will remain stable for the foreseeable future. Bitcoin's value is increasing with time, making it the most rewarding.
When it comes to making payments using bitcoins, there are several options. These options have different pricing, speeds, transaction confirmation procedures, and so on. This post will go through two of the payment ways that Stashwave accepts. Moreover, it will show you how one can make payments using these channels.
What Are The Advantages of Paying With Bitcoin?
Before we go through the steps on how to pay with Bitcoin, lets go through its pro and cons. There are various advantages to adopting bitcoins as a payment method versus fiat currencies. Some of them are as follows:
- When compared to other digital payment methods, shopping with Bitcoin is a low-cost option. Because of the cheap transaction charge.
- When some consumers attempt to use their credit or debit cards to make online payments. They need to supply important information to the firm whose services they use. As a result, users' data may be vulnerable to cyber theft. Purchases done using bitcoins, on the other hand, maintain the user's privacy and anonymity. This also implies that no record of bitcoin-related transactions is retained.
- There is no central power that can influence or control the value and price of bitcoins, such as the government, finance ministry, or central bank. As a result, bitcoins are not at risk of depreciation due to the government's economic policies. Furthermore, no government can confiscate your funds in the form of Bitcoins.
- The barter system was abandoned long ago due to portability concerns. And the fiat currency was introduced. The portability has now been simplified even further. You do not even need to carry your wallets or be concerned about thefts. Bitcoins enable you to execute transactions on your phone in as few as two or three clicks.
Bitcoin Payment Channels
The transaction involves buying and selling bitcoins. This buying and selling are done when a bitcoin owner finds the value of the bitcoins is falling. He sells them so that he faces no loss. But when the value is rising, people buy bitcoins with the hope that the value would rise even further and would give high profits in the future. Starting with listing some of the common bitcoin payment channels, they include the following:
- Main chain
- The Lightning Network (LN)
- Liquid Network
- Hash Time Lock Contracts (HTLC)
Main Chain Method
The blockchain is a public record that records all bitcoin transactions. All activities that occur at the same time are grouped into blocks. These information-storing blocks connect to create chains. The chains are decentralized online recordings of every transaction. The main chain, which is black, has the longest chain of blocks, beginning with the genesis block, which is green, and ending with the current block.
Image Source en.bitcoin.it/wiki/Block_chain
Any bitcoin transfer is only recognised as valid if it is properly recorded in the blockchain. For a transaction to be regarded as valid, the whole network must accept it. Any transaction made is initially classified under three main categories: unconfirmed or pending, confirmed, and canceled. Someone verifies the transaction. And for that, someone must be paid. The transaction fee is therefore paid to the miners, who are high-powered computers that authenticate these transactions. The larger the transaction cost, the faster a transaction is verified.
If a low transaction fee is paid, the transaction will take longer to confirm. Furthermore, the cost is affected by how busy a network is at the time. The transaction charge would be significant if the network was experiencing high traffic at the moment. As a result, the party prepared to pay this high price will get a transaction confirmed quickly.
If the fee given is too low and undesirable to the miner, the transaction will be refused immediately. When a transaction is canceled, no funds are transferred from a crypto investor's wallet.
Steps to Pay Through Main Chain Method
Owners and potential owners of bitcoins can conduct transactions thanks to the main chain in blockchain technology. A person can transfer or receive money without using a bank or credit card company. So, if a bitcoin owner wishes to pay for whatever they want to buy, follow these simple steps:
- The first and most important step is to obtain a bitcoin wallet. A Bitcoin wallet functions similarly to a bank account in terms of storing this cryptocurrency. The first thing you need to use bitcoin is a bitcoin wallet. You cannot use bitcoins until you have a wallet.
- Following the purchase of a crypto wallet. You will need to make an investment in order to purchase bitcoins. They are simply obtained through a variety of exchanges that provide their services.
- Now you must check whether the web store you wish to pay accepts bitcoins as a method of payment. After you have chosen your purchases and added them to your cart, proceed to the checkout page. You may select "Pay with Bitcoin" as a payment method on this page. You will be given information on the bitcoin equivalent price.
- There are now two ways to pay with bitcoins: manually or by scanning a QR code.
- Let’s first understand the payments made by scanning the QR code. QR code scanning is also known as the offline bitcoin transaction method. You will use your mobile phone to scan the QR code given, this will automatically enter the wallet address of the business you want to make the payments to. All you have to do is enter the number of bitcoins you need to pay and confirm the transaction.
- In the case of manual bitcoins, you do not need to supply the seller with any personal information like your credit card number, name, or any other identifying details. Instead, the company will provide you with the address of their wallet. You should copy the Bitcoin address. Then paste it into your wallet's "send to" box. Now enter the number of bitcoins you need to pay the company. Then, press the send button. You will get confirmation shortly. This marks the manual completion of your transaction!
- It may take a few minutes for the recipient to determine whether or not the payment has been made. To authenticate a transaction, bitcoin requires a total of 6 confirmations. The validation might take up to 10-20 minutes or more.
Lightning Network Method (LND)
A blockchain is divided into three main tiers, layer 1, layer 2, and layer 3. Layer 2 has become more popular than ever. As they have the ability to boost scalability by eliminating base layer interactions.
The Lightning Network is a layer 2 solution. It is a bitcoin payment channel that operates on top of the blockchain. This approach requires two parties to agree on the use of bitcoin as a payment method. Both parties can purchase and sell products and services from each other as long as the bitcoins keep their value and the transaction time limit is not exceeded.
The LND method being the newer technology as compared to the main chain offers several advantages over the latter. This protocol offers a quick micro payments platform. Using the LND approach, payments may be done instantaneously, without the user needing to wait 10-20 minutes. As the user no longer has to wait for the block confirmation. In fact, payments may be made in a couple of milliseconds. It may take a few seconds longer, but the transaction will be verified in less than a minute.
Bitcoins are no longer just the buzz of the town. They are in fact being used. As a result, several bitcoin transactions are taking place in various regions of the world at the same time. The LND method facilitates millions and billions of transactions to be completed without any sort of delay. This suggests that the LND approach has considerably enhanced the scalability of bitcoin transactions.
Another important feature of this system is the low cost of its facilities. Transactions are no longer carried out on the blockchain or its main chain. As a result, the consumer is not required to pay a fee to the miner in order for their transaction to be validated. This implies that the Lightning Network enables transactions to be completed at extremely cheap rates. Transactions are faster since they no longer rely on third-party validation.
Steps For Paying With The LND Method
It is simple to pay for products and services with bitcoins using the LND technique. Here is a step-by-step tutorial for novices.
- The LND approach, like the Main Chain technique, would need users to set up a wallet that supports the lightning network in order to pay with bitcoins. These are some of the greatest Best Lightning Network Wallets: StashWave - a custodial wallet - Perform both LND and main chain transactions WalletOfSatosh: is a custodial wallet that can be downloaded on iOS and Android smartphones. Breez: is a non-custodial open source mobile wallet available for iOS and Android. Bitcoin Lightning Wallet (BLW): is a non-custodial wallet solely available for Android.
- The wallet must then contain some bitcoins in order to purchase something. As a result, you'll need to deposit some bitcoins in it. To add bitcoins to your wallet, go to the 'your bitcoin address' tab. There would be a QR code for the address of your wallet. Scan the code to add funds to your wallet.
- To profit from the LND approach, a user must first initiate a lightning channel. This is done by selecting the 'lightning channels' option. This page displays the number of active channels you have created. There would be no active channel for first-timers.
- You must choose the "SCAN NODE URI" option to establish a lightning channel. Scan the node link from our invoices. You may also pick "ACINQ NODE" or "RANDOM NODE" to open payment channels to third parties.
- Several confirmations will be made and a lightning channel will be established.
- To pay using bitcoin, go to the "Transaction History" page and click the "Pay with Bitcoin" button. The "Scan a Payment Request" option is situated in the upper right corner of the screen in this section.
- You may now enter the number of bitcoins that must be paid and confirm the payment.
What Makes Lnd Better Than The Main Chain Method?
The foregoing description may be enough for the reader to understand what the two approaches are and how they work. But now the real question is whether LND is a superior transaction method to Main Chain.
Around 70% of customers worldwide abandon online shopping at the checkout pages, primarily due to a lack of preferred payment alternatives or because the checkout page needs extensive information. The LND approach is expected to decrease the number of individuals who leave the checkout page since it allows the user to finish a transaction in a matter of milliseconds or some seconds at most. Transactions carried out using Main Chain methods can take anything from 10 minutes to over half an hour. In some cases, even after many days, all 6 confirmations fail to arrive. For over these years, no attempts have been taken to minimize transaction time.
Furthermore, the rates at which the LND method provides services to clients are very less in comparison to the cost of carrying out transactions using the main chain technique. On LND, the lowest transaction permitted is 0.00000001 BTC, which is equivalent to $0.00068. Whereas, the smallest amount that may be sent through the Main Chain method is around 0.00000546 BTC, which is equal to $0.37. This indicates that the comparison between the least amount transacted on the main chain is 550 times bigger than the amount over the LND technique.
In case of a large volume of transactions happening at the same time, the Lightning network can easily handle the load. The LND technique has the ability to clear all transactions without any delays. The Main chain technique, on the other hand, is incapable of accepting huge volume payments.
Where Can You Pay With Bitcoin?
With the increasing technological innovation and the decline of many economies throughout the world, a considerable number of businesses, both online and offline, have begun to accept bitcoins as a method of payment. On the check-out page, you now have 3 options: cash on delivery, digital payment through credit or debit card, and now bitcoins. Some well-known brand names and top corporations in the world have begun to provide this service, to mention a few:
- Home Depot
- Virgin Galactic
- Wikimedia Foundation
- University of Cumbria (UK)
- King’s College (New York)
- Star Jets International
Is It Possible To Make Bitcoin Payments Without A Wallet?
The procedures to pay with bitcoins in both payment channels necessitate the possession of a crypto wallet. But it is possible that a person can pay with bitcoins without having to own a crypto wallet. However, if you believe that such methods will be less expensive than creating a wallet, you are mistaken. It will cost you additional cents to pay with bitcoins if you do not have a wallet. One way is that a third party dealer intervention will be required in that case. The merchant will be compensated in fiat money and will then make the payments on your behalf. This is not something the person would do for free. The amount paid by the user will be more than the real amount due to the business from whom an item or service is purchased. PayPal and CashApp are another option for paying with bitcoins without having a wallet. The cash in your account can be converted into bitcoins. This method as well comes with higher charges. Some bitcoin holders will occasionally sell bitcoins to someone in exchange for money. This procedure is quite expensive. This, in most circumstances, can be time consuming. Most significantly, this strategy is dangerous since you cannot verify the seller's credibility.
According to experts, bitcoins will not be able to entirely replace fiat money as long as governments retain central control. However, it can be increasingly used alongside fiat money. The purpose of the preceding discussion was to clarify the distinctions between two payment methods via which users might use bitcoins. The Main Chain method and the LND Method are quite distinct, with their own set of advantages and disadvantages.
To recap the topic, the LND approach outperforms the Main Chain method. The LND approach saves customers time by allowing for rapid and easy payments, whereas the Main Chain needs time for confirmations. Furthermore, the LND approach is less expensive than the Main Chain method. As a result, it saves the user from making large purchases. Finally, the LND method's scalability is impressive.
Get your StashWave account today to get started. With StashWave you'll be able to buy Bitcoin using your card, settle invoices, and receive Bitcoin payments. StashWave also enables instant conversion of Bitcoin to USD that you can settle to your bank account.