Check it out!

When it comes to shopping – and let’s face it, these last few years have been all about online shopping – we all want to maximise our dollar value. Healthy competition in the market place offers many incentives to users to forgo their time and/or personal details to receive a discount. This could be in the form of signing up to a program, promoting products, entering competitions, promo codes or registration to receive “cash back”. The discounts are wide and varied, from elaborate tiered store credits to a simple percentage discount at specific stores. Shoppers are also bombarded with emails, DMs and advertisements as part of such “deals” – sometimes for the better, in helping one stay across latest products or services – but more so at the cost of personal data often being shared with an ever-growing syndicate of third parties.

What if all of the above could be replaced simply by paying in a particular currency and receiving a meaningful discount? That is, no signing up, no sharing of personal information, no spam and no elaborate rules on when and how to spend store credit? This is actually a trend taking hold in front of our very eyes – for those who decide to see. Which currency you ask?

Bitcoin (₿).

Hang with me for a minute. I’m not going to take you through any technical, philosophical nor complicated explanations of what Bitcoin is – that’s all readily available with a simple google. You may not even be interested in Bitcoin as an investment at all – which is absolutely fine.

I’m just going to show you in 4 easy steps how to be ahead and get shopping discounts 🙂

Once completed, you will be able to pay for products and services instantly in Bitcoin through Lightning Payments. You can think of Lightning Payments as the same as the “tap and go” experience – and there are a growing number of businesses offering this payment method. In fact did you know Bitcoin is legal tender in the nation of El Salvador with millions of people holding the digital currency and starting to transact via Lightning payments?

Once you learn the basic steps, repeating it will be even more straightforward. I will now take you through a hands-on approach where on completion, if you so choose, you can send me a 1 cent transaction to see how easy and instantly it works.

Two points of caution before we start:

1. This process is intended for small to medium, ad-hoc spending. You can think if this conceptually as the cash in your wallet – for safety reasons and in case you lose it – you never walk around holding too much for too long.

2. It is also not intended for converting significant amounts of dollars and holding the bitcoin long term on a third party platform (i.e. a bitcoin exchange site). This becomes a whole other topic on securing your bitcoin which is not part of this article.

Shopping Discount Example: From Dollars to Bitcoin to Lightning Payment

Imagine you can receive 20% off a $50 item by paying $40 with a Bitcoin Lightning payment.

The image below is a high-level, end-to-end flow we will go through in detail.

_{(Note: The figures you will see on the screenshots to follow are not exact for security reasons, however a final summary at the end provides accurate overall figures).}

Step 1 – Get Bitcoin

Unless someone is willing to give you some, generally you will need to do the following:

• Sign up at a Bitcoin exchange website,
• Link your bank account (for depositing and withdrawing cash) and;
• Send funds through (Debit/Credit Card/Bpay etc) to be converted to Bitcoin.

Sign Up

The sign up process might feel a bit clunky as you will need to verify your identity (eg upload an image of your passport or driver’s licence and then have it compared to a selfie). ID verification is usually completed within 10 minutes.

There are many international and local Bitcoin exchanges you can choose from. Personally, I’ve used Coinjar for a number of years with no issues. That said, do your own research, Google and ask around to see what works for you (in fact if you are based in the US you may be able to use Strike which looks to make the process below even more streamlined).

Before your first cash deposit to the exchange be aware there may be up to a 1% fee for buying Bitcoin (this may be considered expensive by today’s standards, so you may find cheaper options – noting there will always be a balancing act between convenience, quality and price.). Also note the “Buy” bitcoin price is higher than the “Sell” bitcoin price, so if you mistakenly convert into bitcoin and decide to convert back you will see a noticeable loss, depending on the Exchange.

Your First Cash Deposit to convert to Bitcoin

The time for your first deposit to appear in your Exchange Cash Account can be instant with debit/credit card or take up to 1 business day (e.g. with BPay, PayID, Faster Payments). You should purchase $5-$10 more to account for some fees in the process (generally under $5 total). Once you have made your purchase you will see your Bitcoin Balance. For this example, I converted $50 into 0.000718 Bitcoin. Note: After you have gone through this process once, future deposits and bitcoin purchases can be carried out in a matter of minutes.

Bitcoin appears in “Everyday Bitcoin” Account

Now it’s time to send this Bitcoin to your Lightning Wallet.

Step 2 – Download a Lightning Wallet

There are a number Lightning Wallets available – essentially mobile phone apps – you can store bitcoin in. For the purposes of ease, my suggestion would be to use “Wallet of Satoshi” (WoS) – available on both Android and Apple phones.

Once you have installed the app, you will need to think of it as managing two “accounts”. The first is an “On-Chain” account – you can consider it as an equivalent to a Deposit or Savings Account.

Secondly, your “Lightning” account – which behaves as your day-to-day transactional account.

You can see both account types when you click the “Receive” button when you first open the app.

Wallet of Satoshi (WoS) app – On-Chain Account Receive Address

Wallet of Satoshi (WoS) app – Lightning Account Receive Address

There is only one transaction list combining both “accounts”. Swipe up on the home screen to see the list and click on a transaction for more details. Example below (obviously you won’t have any transactions just yet).

^{Hint: You should also register an email address with WoS by clicking on the three dots “…” in the top right corner of the app. This will ensure you can recover the app and funds in it if you need to reinstall it on any device.}

Ok let’s get your Lightning Wallet loaded.

Step 3 – Load up your lightning Wallet

Unless someone is willing to send you a lightning transaction directly or you have a lightning balance on another device, when starting from zero, you will usually need to load up with an On-Chain transaction (i.e. like Depositing to your Savings/Debit account). This means sending the bitcoin in your Exchange Bitcoin Account to your Lightning On-Chain Account.

To do this:

1. Go to your Wallet of Satoshi app and select “Receive” and then “On-Chain”.

Fees are incurred here so be prepared – you won’t receive the full amount of bitcoin sitting in your exchange wallet if you choose to transfer all of it.

Fees to be noted:

• Coinjar Exchange withdrawal/network fee – a few dollars (normally ranges are from under a dollar to about $5 max and is independent of how much you are transferring)

• 0.3% of the value you are transferring charged by Wallet of Satoshi on receipt of the bitcoin deposit

2. Copy the QR code from WoS. This is your deposit address (and it changes for each transaction).

Now in your Exchange Bitcoin Account you should see an option to “withdraw” or “send” bitcoin. There should be a “to” address/recipient. Paste the deposit address there and click next.

Enter the amount you wish to withdraw (i.e. send to your wallet of Satoshi “On-Chain” Account) and select “Next”. Below, I entered $45.00 AUD which brought me to the “Review and send” screen to check the amount and fee (of about $2.80 AUD). I hit “confirm” to send the bitcoin.

Confirming amounts

Send complete

The payment will be on its way within a few minutes and you will see your deposit appear in the transaction listing in your Wallet of Satoshi app shortly afterwards. It may take a few more minutes until the app confirms the transaction is complete.

Step 4 – Instant Pay

Once the transaction is confirmed, you will now notice a balance denominated in “sats” – which may sound strange. Underneath that however you will see the dollar amount. There are 100 million “Satoshi” (Sats for short) in 1 Bitcoin. So the 0.00056 bitcoin I sent is now denominated as 55,942 Sats (the difference is about $0.15 AUD in fees).

In this example I will pay $40 AUD ($29.55 USD) via a Lightning payment to my Hasoforsoundmoney.com site to simulate the payment for the product in our initial example. To do this, I click the “Pay with BTCPAY” button below which generates an invoice/QR code to be paid.

Now, in your Lightning wallet all you need to do is select the “Send” button to enable your phone’s camera to scan the invoice/QR Code and then hit “pay”. If you are unable to scan you can select the paste icon while the camera is enabled (after copying it from the store site). If you are shopping on the same device as your WoS app is on, then you can press the “Open in wallet” button to skip to your wallet’s pay screen.

After Scanning the QR code WoS automatically shows you the amount to be paid.

In just a few seconds you will see the invoice change to a green tick to confirm the payment went through. You will also see the successful transaction in your Lightning wallet.

Notice the transaction fee of 6 Satoshi (48305 – 48299) or about $0.0002 AUD

That’s it.

Learnings and Conclusion

Here is a summary of the Fees and Total Saving for the complete process:

The outcome of our walkthrough is a 13% saving on an originally 20% discounted item priced at $50. The reason for the hypothetical and significant discount was to incentivise the use of Lightning Payments so the online store can receive Bitcoin. This is a trend that is already starting to take place. The most expensive fee in the process was when we sent through the On-Chain deposit from the Coinjar Exchange to our Lightning Wallet (Wallet of Satoshi), which was $2.79 AUD. This fee can be greatly reduced as a percentage of items purchased. That is, 1 On-Chain transaction could be used for multiple Lightning Payments (i.e. deposit more Bitcoin in your lightning wallet in readiness for future spending). In this example we have only carried out a single Lightning Payment. Finally, it is worth noting many credit cards charge fees generally ranging from 1% to 2%, which is another deciding factor for both consumer and merchant when considering adopting Lightning payments.

Recap

So as a quick summary the steps are:

1. Get Bitcoin

Sign up at an exchange and convert $’s to Bitcoin (cost may be up to 1% in fees)

2 & 3. Install and Load up your Lightning Wallet

Download Wallet of Satoshi and hit “receive” for the On-Chain account, copy the address/QR code and paste it in your exchange withdraw/send screen and send it through (takes 10-15mins for verification and may cost a few dollars in fees).

4. Spend away

Choose “Send” and then “Lightning” to send by either scanning or pasting the address from the invoice of the product/service you want to buy and hit “pay”. If you are shopping on the same device as your WoS, then you can press the “Open in wallet” button to skip to your wallet’s pay screen without scanning the QR code/address.

If you have come this far without actually making a payment, you might want to do complete the walkthrough by sending me a small 1c transaction (about 15-30 sats at the time of writing). Enter an amount in USD below to make your very first Lightning payment 🙂

You Can Start Getting a Discount Using Lightning Now

If you are looking for somewhere spend your Bitcoin through Lightning, you can check out Lightning Bazaar. They offer over 20% off for a few items (mainly for Australian locals).

For almost everything else there is Bitrefill. They offer 1%-5% in rewards (in Satoshi) when you purchase from a range of over 1600 online gift cards spanning 170 countries. Simply choose the gift card and enter the amount of funds you wish to add to it, select to pay with Lightning and receive your code for use.

Happy Lightning spending and congratulations – you are now ahead of the curve!

What do you think?

Turned out to be an interesting social experiment. I thought I’d share a rational argument for Sound Money with the Dan Carlin Reddit group – whose members should be renowned as open-minded and able to discuss nuance etc. I didn’t mention the “B” word mind you – I figured that may be too much to chew. It obviously didn’t go down very well, so I sought some reassurance in the Bitcoin sub – and well – see for yourself the stark contrast in reception

Full talk here —> Simon Dixon’s Public Commitment Day 81 talk “Surviving a #Bitcoin crash”