Buy Gold and Silver With Bitcoin in Israel
How to Buy Gold with Bitcoin in Israel
Like any payment method, though, there are both advantages and drawbacks to using bitcoin to buy gold and silver.
Advantages of Bitcoin
There are 3 distinct advantages of using bitcoin to buy gold and silver.
1. Convenience. If you have some bitcoin and are making an online purchase of gold, it can be quick and easy. No worries about when a dealer is open, if it’s a holiday, or even if you’re away on vacation and spot a buying opportunity.
2. Outside the banking system. For those that would prefer to sidestep the banking system—which is understandable after what happened in 2008/09—then Bitcoin will allow you to do that. Don’t want to involve credit card companies? Ditto. That’s because payments are cleared through the Bitcoin system, which does not use banks or credit card companies.
3. Singular currency. Bitcoin is an “international” currency and can be used anywhere in the world that has internet access. Once you have some bitcoin, you don’t have to convert to any other currency or payment system, or worry about currency exchange rates.
Some investors will also say that bitcoin is cheaper. When compared to credit card and PayPal processing fees, this is largely true. However, Bitcoin does charge a small fee for each transaction, so those paying cash could purchase gold and silver at a lower cost than bitcoin.
Drawbacks of Bitcoin
Despite its popularity and growing use, there are currently several disadvantages to using the Bitcoin system.
1. Lack of privacy. This surprises most people, because everyone assumes that a bitcoin transaction is private. It has a degree of privacy, but it is not completely anonymous. When you use bitcoin to make a purchase, the transaction itself, along with your digital address, are recorded on the Bitcoin network. This record is both public and permanent.
2. Risk of loss. You’ve probably seen a chart that shows just how volatile the price of bitcoin can be. That level of price volatility is so extreme that in some circumstances you could be told to submit more bitcoin before your transaction is approved (if the price is falling, or that you are being refunded in bitcoin if it’s rising). At a minimum, it could make it difficult to know exactly the amount of bitcoin you need to buy the amount of gold and silver you want, or even if you have sufficient funds.
The other risk is that while crypto-currencies are growing, there is no guarantee of Bitcoin’s future. You have no assurance that it will continue in its present state, or even be around.
3. No buyer protection. Bitcoin has not yet instituted some of the safety protocols that other payment services have. For example, transactions made with Bitcoin are instant and irreversible, making fraud easier to commit—and Bitcoin currently offers no “money-back” policy. Further, it can take 1 to as many as 4 days for a bitcoin transaction to clear, which could be frustrating as a consumer. Last, a skilled operator could double-spend the same bitcoin.
As you can see, Bitcoin is still evolving and is not risk free. The system has not yet achieved full security and privacy.
Want to minimize your risk?
• Your greatest protection when buying gold with bitcoin is to use a trusted dealer.
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