Get Your Bitcoin Discount!

You probably know that a growing number of merchants accept bitcoin, whether in person or online. However, did you know you can sometimes get a discount for using bitcoin to complete your transaction?

Just last week, I was buying some silver rounds online to add to my collection. Yes, I’m a bit of a prepper. However, silver is a fantastic investment right now whether you prep or not. It’s quite low in its ratio to gold, nearly 70-to-1 in price, where gold is 70 times more valuable than silver. However, the historical average is closer to 16-to-1. So, either gold is too high (no, I don’t think so), or silver is really low.

So, what does this have to do with bitcoin? The answer is two-fold. First, I like both bitcoin and silver. Secondly, I like a bargain.

Buying Silver with Bitcoin

One of the places I buy gold, specifically Provident Metals, allows you to pay for gold and silver in numerous ways. You can pay by wire transfer, PayPal, credit and debit cards, or even by personal check. They have recently added bitcoin as a payment method. And, you get a discount for using it!

As I have written before, merchants can afford to give you a break when you use bitcoin, especially versus credit and debit cards which are used for over 90% of all online purchases. PayPal (so-called “new money” in their ads) transactions can be expensive for the merchant too, especially if you pay with credit cards. They basically wrap the old money in a new service. It’s really not that “new”. Bitcoin is the “true new money”.

Getting back to my story…

Specifically, there were three options for me to buy my silver:

  1. Credit cards, debit cards, and PayPal: I would pay $18.78 per 1 troy ounce silver round.
  2. Bitcoin: I would pay $18.22 per round.
  3. Cash: I would pay $18.03 per round.

Yes, paying by cash, that is by bank wire or check was still a bit less expensive. However, wire transfers can easily cost you $25 to $50 for each transfer! As you can see, bitcoin was 3% less expensive than paying by credit.

Bitcoin as a Preferred Payment Method

I believe that bitcoin will become the preferred method of payment for companies such as Provident in the years ahead, even ahead of cash. That’s true especially if the volatility of cash increases and that of bitcoin decreases. When that happens, I suspect that the bitcoin price for my silver would be about $18.00 per round, in my example above.

Bitcoin transaction fees are small for the sender, typically a few cents to maybe 50 cents. And, receiving bitcoin is free for the recipient, including merchants! Although the merchant pays nothing to receive the bitcoin, they will need to exchange some or all of it into their local currency. Why? They have their own merchants and suppliers that they need to pay, and very few B2B companies accept bitcoin. (There are a growing number of B2C, or business-to-consumer, companies that accept bitcoin today.)

Remember that credit cards can easily cost the merchant 2% to 3% on the value of the entire transaction. For a small order of 20 silver rounds, valued at about $365 at today’s price, the merchant could be on the hook for about $10. That’s a big percentage to release when a merchant’s margins are often quite small.

Want to save money? Look for the bitcoin discounts in your everyday shopping. You’ll be glad you did!

Disclaimer: I am not endorsing nor am I receiving any compensation from Provident Metals for this blog. It’s simply a great example of using bitcoin to buy gold and silver, our “historical money”.