Bitcoin as a Cash Alternative

bitcoin as a cash alternative

Back in 2015, my friend and colleague John rang me up and said “Dave, go to this web address, click on this link, do this, do that … there you go, you’ve got a Bitcoin wallet. Now watch this…” A little while later, 0.1 of a Bitcoin turned up in my new wallet.

I wouldn’t have bought it had John not held my hand and sent it to me. Being gifted the Bitcoin and being guided through the setup phase was crucial for me.

When chatting with friends, family and work colleagues, it became obvious that many of them were similarly challenged by how to get involved in cryptocurrency. And most haven't heard of the best cryptocurrency exchanges either. So, based on my experience and the feedback from others, we’ve introduced Bitcoin Gift Cards. But more on that later.

So here I am in 2015 with 0.1 Bitcoin and my curiosity was piqued. I watched it for a while and wondered about why I might want to buy more of it.

Using Bitcoin as an insurance policy against banks running into trouble

bitcoin as a cash alternative bank failures

At the time, I was sitting on some cash and being a macro minded individual, was contemplating where to put some of that cash in the event of a banking system issue, similar to what occurred in the US in 2008.

There are a couple of things that I considered here.

Firstly, how likely was a banking system issue in Australia? I figured unlikely, although given the inherent risks in banking (borrowing money short term to lend it long term, plus leverage), it was still a risk that bothered me.

Secondly, if there was a banking system issue, would depositors still be in trouble, particularly given the government guarantees that remain in place after the global financial crisis?

Call me a libertarian but backing my financial future with the promise of politicians wasn’t a good bet then and it’s an even worse bet today.

So I thought that it’s probably worth looking at some alternatives to cash as an insurance policy against the banks running into trouble.

Could I put cash under the mattress instead of buying Bitcoin?

So where can you put cash that’s outside the banking system? Sure, you can have a few thousand dollars stuffed in your mattress, but I can’t imagine that stuffing a few hundred thousand dollars in your mattress would help you sleep.

Is gold a cash alternative relative to Bitcoin?

Historically, gold has been a currency, but stuffing your mattress with it would be more uncomfortable than paper money. It’s still good to own some under custody at somewhere secure such as the Perth Mint. But in today’s society, it’s not liquid, so it’s not really a cash alternative.

How about government bonds or treasury notes?

As a retail punter, it’s difficult to hold Australian government bonds or treasury paper without taking on credit risk through a platform or fund. In Australia, short-term paper is typically State government issued and still comes in sizes that are not readily divisible (or traded). As for bonds, they are long-dated, so neither of these options are really a cash alternative either.

Think of Bitcoin as a cash alternative

Having considered all these options, I began to think about Bitcoin as a cash alternative.

It scared me when I first added to my initial 0.1 Bitcoin position.

At the time in 2015, I was able to buy Bitcoin from a web-based agent.

The website I used charged me a massive spread on the current price (6% away from the mid-point) then added another 5% commission onto the transaction and then charged me Goods and Services tax (GST) of 10% on the whole amount (not just on the commission).

So I effectively paid 20% over the asking price.

Crazy stuff but for some reason, I still did it (the GST issue was resolved that year, so not all of my transactions were subject to that gouge).

The price was only one issue. I then had to run down to my bank and withdraw cash to pay for the transaction, run the cash to another bank to deposit into the agent’s bank account within an hour or so of doing the initial deal over the internet.

At each turn, I felt like a sucker. I’m an old forex trader. Trading forex in 2015 meant crossing a 0.0001% spread with no commission and doing it all from the comfort of my study.

This was making me doubt my 20+ years’ experience as a trader and fund manager.

It felt like stuffing hard earned cash into a hole in a wall that might close and disappear at any time. It was a little gut-wrenchingly scary. Yet still, for some reason, I persisted.

I was not completely sold on Bitcoin’s merits, but I had a niggle that it might just do what’s written on the label.

What is written on the Bitcoin label?

Bitcoin is an electronic cash payments system that doesn’t require a trusted third party to intermediate.

It has a low risk of fraud due to the mathematical improbability of altering non-current blocks in the blockchain and has embedded incentives for anyone who wants to hack it; they are financially better off using those same skills to mine it.

It doesn’t promise to be fast or cheap at all times; in fact, the Bitcoin whitepaper tells us that there should be other clip-on nodes for businesses requiring independent security and faster verification (think Lightning network).

Bitcoin is pretty good for me as a cash alternative; I can convert enough of it to cash on any given day or buy goods and services with it online.

It doesn’t need to replace cash. It wasn’t designed to. It might, but it certainly doesn’t have to for me to want to own it.

Our Bitcoin Gift Card

If you’ve never owned Bitcoin and are curious; consider buying a Bitcoin gift card. It’s the easiest way to get started and it’s like having your hand held through the process.

If you’ve been involved in crypto for a while, why not buy one for a friend? They’ll finally understand why you’ve been so enthusiastic about the merits of Bitcoin.


Nakamoto, S. (2009). Bitcoin: A peer-to-peer Electronic Cash System. (Bitcoin Whitepaper).

(Only 9 pages, definitely worth the read. Most other cryptocurrency white papers try to scare you off from reading them, being 50+ pages of gobbledegook. This is elegant in its simplicity.)

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Use Digital Currency – How it works

How our Bitcoin Gift Card works

What is a Bitcoin Gift Card?

A Bitcoin Gift Card is the perfect way for the newcomer to get their first Bitcoin. It comes with a paper wallet and simple instructions to set up a software wallet so that you can transact with Bitcoin over the internet. Bitcoin Gift Cards are available in AU$25, $50, $100 and $500 denominations.

Who should buy a Bitcoin Gift Card?

Anyone new to Bitcoin will find no easier way to get their first Bitcoin.

They can be gifted by an existing cryptocurrency enthusiast, or bought by anyone wanting to get involved for the first time themselves.

How can I pay for my Bitcoin Gift Card?

You can pay with either cryptocurrency through our payment gateway, or you can use Australian Dollars through our POLI Pay facility.

Can I use a Bitcoin Gift Card to top up an existing software wallet?

Yes. When you receive your additional Bitcoin Gift Card, you can simply import the "Secret" wallet identifier from your Bitcoin Gift Card into your existing software wallet. This will move your Bitcoin from your Bitcoin Gift Card into your existing software wallet. 

What does my Bitcoin Gift Card include?

Your Bitcoin Deposit, wallet and key generation and network transfer.

How long does it take to receive my Bitcoin Gift Card?

Going through to checkout takes about 2 minutes. You won't find an easier process anywhere. Once you've placed your order, it can take between 10 and 60 minutes to receive your Bitcoin Gift Card depending on the speed of the Bitcoin network at time of purchase.

How our Flexi eGift Cards work

We have partnered with GiftPay, an aggregator of online deliverable eGift Cards in Australia.

Through our agreement with GiftPay, you are able to purchase a Flexi eGift Card from us, redeemable at a broad range of retailers in Australia.

Watch the Video to see how it works

What is a Flexi eGift Card?

A Flexi eGift Card is an electronic gift card that lets you choose where you'd like to shop! In the past if you were given a gift card for a particular shop but didn't want to buy anything from that shop, you were stuck. But now with a Flexi eGift Card, you get to choose at which shop you spend your gift. 

What's more, you may be able to split your Flexi eGift Card and spend it at different shops! For example, if you have a $30 Flexi eGift Card, you could choose to split it up into a $20 Myer eGift Card and a $10 iTunes eGift Card. 

Where can I spend it?

You can spend your eGift Card at a broad range of Australian retailers. For a full list of our retailers, click here. (page showing full list of retailer logos)

How do I redeem it?

Your Flexi eGift Card will be emailed to you. Click the link in the email to open your Flexi eGift Card.

Then convert your Flexi eGift Card into any combination of gift cards or vouchers up to the total available balance. How you redeem your chosen gift card depends on the card or voucher chosen.

Pay a BPay Bill

What Bills can I pay?

You can pay any bill that has the BPAY logo and Biller Code including credit cards.

Are there any payment limits?

Yes. You can pay a maximum of $1000 per transaction based on regulatory limits. You can however break up a bill into multiple $1000 tranches and enter the same biller and customer reference code.

How does the transaction work?

When you enter the amount you wish to pay, the BPAY biller code and your bill’s customer reference number, you will click through to our checkout.

At checkout, you will be asked to leave your details, which enables us to satisfy our legal requirements under the Anti-Money Laundering and Counter-Terrorism Financing Amendment Act 2017. This sounds ominous, but takes about 2 minutes.

When you proceed to payment, you will be shown the digital currency amount payable and the wallet address to send your digital currency to.

Once you have sent your digital currency to our payment gateway wallet, you will receive an email notifying you that your payment has been received. We then convert your digital currency to AUD and pay your BPAY bill on your behalf.

Are there any fees?

Yes. At checkout you will notice our 3% fee added to your bill amount. This is to help us manage the currency risk of a volatile digital currency market when converting to AUD for us to pay your bill. We use a third party payment gateway to enable the digital currency transaction. Our considerations when choosing a gateway was security, pricing (spread) and speed. You’ll note when at checkout (before proceeding to payment) that the price you receive on your digital currency is very competitive. Other digital currency BPAY facilitators charge up to 6% per transaction on the currency alone, which in our view is akin to highway robbery.


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