Still few establishments accept cryptocurrencies as a means of payment in France. This is explained in particular by the high volatility of these assets.
Have you recently invested in cryptocurrencies? What purchases can we make with these virtual currencies? In what type of establishment are they accepted? Answers.
What is a cryptocurrency?
A cryptocurrency or crypto-asset is a virtual digital asset based on Blockchain technology. Its value is determined solely by supply and demand.
Unlike traditional currencies, cryptocurrencies do not rely on a trusted third party such as a central bank.
The main cryptocurrencies
Today there are thousands of cryptocurrencies created by a community of Internet users using an algorithm that generates tokens. These are then allocated to “miners” as a reward for their participation in the operation of the system.
Once created, tokens are stored in an electronic vault on the user’s computer, tablet or phone. They can also be stored remotely, in the cloud.
Bitcoin, Ether and Ripple are some of the best-known cryptocurrencies. You can consult the list of crypto-assets offered on the website coinmarketcap.com.
Proof of Work and Proof of Stake
To understand how cryptocurrencies work, we must discuss proof of work and stake.
Blockchain relies on a tamper-proof mechanism to validate cryptocurrency transactions. This mining process works with proof of work which is used to validate transactions and mine new tokens. It requires significant computing power and is increasingly criticized for its environmental impact but guarantees the integrity of transactions without the intervention of a trusted third party.
Faced with these criticisms, many cryptocurrencies have abandoned it in favor of proof of stake. Its principle is to assign the validation of each block randomly to a user according to a probability which is not proportional to calculation capacity. Proof of stake covers proof of stake (allocation of blocks based on the quantity of cryptocurrencies owned by a node).
Even though proof of stake represents an alternative to proof of work, its deployment remains slow among the largest blockchains.
Where to buy cryptocurrencies?
To buy cryptocurrencies, you can turn to an online broker or go to a specialized platform.
While the broker offers many financial products such as stocks, ETFs, currencies, commodities, an exchange (or platform) is dedicated to the purchase and sale of cryptocurrencies and does not provide the possibility of diversifying one’s investments. .
Therefore, if you want to focus on cryptoassets and have access to a large number of virtual currencies, it is best to go to an online platform. Kraken and Binance are the most used.
How to buy cryptocurrencies?
First, find out about the different players specializing in cryptocurrencies. To help you see things more clearly and avoid scams, the PACTE law has put in place a specific regime governing digital asset service providers (PSAN). PSANs must be registered with the Financial Markets Authority (AMF) to be able to offer in France: crypto-asset custody services or access to crypto-assets, the purchase and sale of crypto-assets, assets for legal tender currencies, the exchange of crypto-assets for other crypto-assets, the operation of a cryptocurrency trading platform.
Before opening an online account with a platform, it is strongly recommended to consult the blacklist of unauthorized companies and sites regularly updated by the financial policeman.
Account opening is subject to verification. Most platforms require proof of identity to be able to trade cryptocurrencies. The account opening procedures vary depending on the actor chosen.
Know the pitfalls and risks of cryptocurrencies
Have you decided to invest part of your savings in cryptocurrencies? Do not rush ! Take the time to train yourself in financial techniques and tools. It may be interesting to look into how Blockchain works before getting started.
Another recommendation: do not buy when the value of a cryptocurrency rises. The best strategy is to keep your virtual currencies for a relatively long time before reselling them. This helps avoid large transaction fees.
While bitcoin has the largest market capitalization, many other cryptocurrencies have great potential. It is possible to compare them on the coinmarketcap.com website.
Finally, you should know that regulations around cryptocurrencies are increasingly strict. In France, it is obligatory to declare accounts held abroad. On the other hand, profits from the sale of crypto-assets are taxable. The single flat-rate levy (PFU) applies to capital gains made.
In general, it is important to remember that cryptocurrencies are not regulated and do not have official prices. Investors must remain vigilant when choosing their platform by favoring secure sites. While such investments can make a lot of money in a short time, the opposite is true because these currencies are speculative and volatile.
To limit the risks, ask yourself the right questions: can you afford to lose the money invested? Do you understand the characteristics of the virtual currency you want to invest in? Is the company you are contacting registered on a blacklist maintained by a competent authority? Do you know the features of the platform in question? Are you able to purchase, store or transfer cryptoassets securely?
What can you buy with cryptocurrencies?
In some European countries, for example, it is possible to pay for a taxi ride in bitcoin. This is particularly the case in Italy, Hungary and Estonia.
In France, bitcoin is not recognized as an official currency and professionals are not required to accept it as a means of payment. However, some stores and merchant sites accept cryptocurrencies. It is thus possible to purchase various goods and services such as travel, games, leisure activities, clothing or software.
If you plan to make purchases in cryptocurrencies, don’t forget to create a digital wallet, then scan the merchant’s QR code. You can also hold a physical wallet to store, send and receive cryptocurrencies, or have a payment card designed to pay in bitcoin or other cryptocurrencies.
Who to contact in case of a problem ?
Are you having a problem following a payment in cryptocurrencies? You can contact the “Epargne Info Service” service of the Financial Markets Authority to report a dispute or fraud of which you may have been a victim.
In the event of fraud, immediately file a complaint with the nearby gendarmerie or police. Finally, report your dispute to the Departmental Directorate for Population Protection (DDPP) which represents the General Directorate for Competition, Consumer Affairs and Fraud Repression (DGCCRF) at the regional level.
Author Bio
A connoisseur of the digital marketplace and a master of the written word, this 30-year-old English expert brings to the table a wealth of knowledge rooted in the sale of digital products and a passion for blogging that resonates with an audience seeking expertise and insight in the online realm.
Their insights are drawn from hands-on experience navigating the intricacies of e-commerce and content creation—leading the forefront of digital innovation and communication. Whether it’s breaking down complex marketing strategies or sharing tips on how to captivate an online audience, their work stands as a testament to a career built upon successful digital engagement and savvy business acumen.
Stay tuned to absorb compelling content from a voice that not only understands the digital landscape but also shapes its future through every blog post and digital strategy.
