Paying with crypto

Paying with crypto means settling for goods and services in cryptocurrency: by sending it straight to the seller's address, through a payment processor, or with a crypto card.

How it works

There are three main ways. Direct transfer: the seller shows an address or QR code and you send the coins. Through a crypto payment processor: the service takes crypto from you and often converts it to money for the seller right away. And a crypto card: you pay by card, the issuer sells the crypto for you, and the seller receives regular money.

A blockchain payment cannot be reversed like a card payment. If you got the address or amount wrong, or the seller is a scammer, you only get money back if the receiver chooses to send it. There is also a network fee and a confirmation time that depends on the blockchain.

Stablecoins are used most for payments because their price does not jump. Spending a volatile coin such as BTC is treated in many countries as selling it, and the gain can be taxable.

Example with numbers

You bought 0.001 BTC for $30. A year later you pay for a subscription with that 0.001 BTC when it is worth $60. In many countries the tax office sees this as selling BTC with a $30 gain, even though you never moved anything to a bank.

Common mistake

A mistake is sending a payment without checking the address and network, or paying an unknown seller with no buyer protection. There is no card-style refund. Copy the address only from the payment page, check the first and last characters, pick the right network, and for large purchases from unknown sellers use an escrow or middleman.

Questions and answers

How do you pay with crypto in simple terms?

The seller gives you an address or QR code and you send the exact amount on the stated network. Or you pay with a crypto card wherever cards are accepted.

Can a crypto payment be refunded?

The transfer itself cannot be reversed. A refund is only possible if the seller sends the money back.

Do I pay tax when I pay with crypto?

In many countries spending crypto counts as selling it, and any increase in value can be taxed. The rules depend on the country.

Paying with crypto

How it works

Questions and answers

Related terms

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