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Why You Shouldn’t Use Bitcoins for Top Ups

I came across an article and a website the other day that advertised using bitcoins to purchase prepaid minutes at a discount. So, of course, I clicked on it. I mean, I’m all about saving money–that’s half of the reason I am even interested in prepaid phones in the first place.

Turns out there are multiple companies like Bitrefill and Piiko which sell minutes for prepaid phones at a pretty decent per-minute discount. The more you buy, the better your discount is. Top ups can be purchased for quite a few popular companies around the world and in the US.  Sounds good, right? Well, there’s a catch: you have to use bitcoins for all of your Bitrefill purchases, and bitcoins are far from stable.

What are Bitcoins?

First, you have to understand what bitcoins really are. If you haven’t heard about bitcoins, then you’re probably in the majority as they haven’t quite made it mainstream yet. Bitcoins are a form of digital currency (also known as crypto-currency) which can be spent online anonymously, much like cash in a regular brick-and-mortar store. Sounds like a great idea, right? Well, as it turns out, economics are a bit more complicated than that.

Because of its very nature, Bitcoins are not controlled by any one governmental organization or body. On the surface, this sounds like a great idea, but in reality what it means is that there’s absolutely no guarantee that bitcoins actually hold any value. While regular currency will fluctuate in value and price when compared to other currencies, bitcoins tend to swing even faster and harder than regular currency.

Of course, I can’t say I don’t approve of the general idea behind it, and it’d be great to have a global marketplace like they are referring to in all of the advertising materials. The video below explains how it works, as does this FAQ page. Check it out:

Personally, the main thing that worries me is the lack of stability. You can take a look at Bitrefill, one of the companies selling mobile top ups, and right now the currency exchange for bitcoins is not in favor of the USD. In fact, you’d be paying more topping up your phone with bitcoins than if you just used regular currency. With exchanges like that, I’m not sure how long bitcoins are gong to be around. So, unless you’re only using them for one-time, short term finances, I’d be tempted to just stay away entirely for fear of losing money.

But, I admit I’m not an economist and maybe my understanding is flawed. What do you think? Would you use/have you used bitcoins? Share your thoughts with me in the comments!