What is Bitcoin Hosting?
Cryptocurrency is often a preferred method of payment amongst enthusiasts, technologists, and early adopters.
Bitcoin hosting is often presented as a solution for those seeking a degree of privacy and anonymity on the web.
On this page, you can compare hosts that accept Bitcoin as payment for their services.
Setting Up a Bitcoin-Related Site
You do not need Bitcoin-specific hosting to set-up a Bitcoin-related site.
But if the majority of your income is in bitcoin, it may make sense for you to pay your hosting provider in bitcoin as well.
You’ll find that you have fewer providers to choose from, but if you have a strong preference for paying in bitcoin, there are certainly solutions out there.
With a variety of third-parties available, as well as Bitcoin-specific payment providers, you can transact Bitcoin seamlessly.
Attractive Simplicity of Bitcoin
Some bitcoin hosting customers are attracted by the simplicity of bitcoin as a payment method.
Not needing a credit card or PayPal account to settle their hosting invoices is also a bonus.
And some Bitcoin hosts provide simpler integration for Bitcoin payments for your website.
But integrating Bitcoin payments is incredibly simple, so this shouldn’t be your primary motivation for choosing a bitcoin web host.
Bitcoin: A Brief Introduction
Bitcoin was developed and released in 2009 by an anonymous developer, or group of developers, using the alias Satoshi Nakamoto.
The real identity of the individuals involved remains unknown.
Transactions on a Decentralized Network
Bitcoin was designed as a cryptographic peer-to-peer network as a way of decentralizing trust among network participants.
Not having a central authority means the participants of the network are entirely responsible.
All bitcoin transactions are stored in a public ledger, the bitcoin blockchain.
While the transactions are public, the recipient and sender are not named on the blockchain.
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Privacy and Anonymity
Bitcoin is, therefore, more private than some payment methods, but it is not totally anonymous.
The blockchain can also be employed for a number of different applications.
Many developers are working on so-called bitcoin 2.0 or bitcoin 3.0 projects.
Some of these second and third-generation blockchains are a threat to Bitcoin’s reign of power.
Bitcoin’s Competition
In the past two years, Bitcoin hasn’t been the only name in the cryptocurrency space.
The likes of Ethereum gathered rightful attention, which is a second-generation cryptocurrency.
Even Ethereum has made similar infrastructural mistakes which are unavoidable with new technologies.
As a result, the rise of the third generation will be significant. Some names to keep an eye out for are Cardano, NEM, Ripple, NEO, and IOTA.
Do bear in mind, most blockchain specializes in an area, creating a whole new ecosystem around new forms of web hosting.
These aren’t only currencies, they are platforms.
How To Buy Bitcoin
There are various ways to buy bitcoin. As the general mainstream popularity of the king of cryptocurrencies increased, so did the number of services to support adapting to it.
Variety of Methods to Buy Bitcoin
Overall, the industry is booming with services ranging from platforms adapting to peer-to-peer trading to full-fledged exchanges supporting FIAT currencies.
A handful of popular cryptocurrency exchanges support in excess of 100+ coins, providing a brilliant platform to buy, sell or simply trade.
So let’s take a look at the different ways you can turn your cash into Bitcoin.
- Directly via Exchanges
- Peer-to-Peer
- Tether
- Cash Buy
- Bitcoin ATM
- Exchange other Cryptocurrencies
Directly via Exchanges
Perhaps the quickest and simplest form of all is buying Bitcoin directly. This can be done via exchanges, such as Coinbase or Kraken.
Users are required to register and undergo an intense verification process, requiring more than just a name and e-mail address.
Typically, buyers and vendors must verify themselves with proofs of address, nationality and driving license/passports.
Following this, these exchange accounts require funding, either via direct deposits via your bank, or a wire transfer.
Exchanges such as Coinbase may be simple to use, although you do pay for your user-interface and simplicity with a hefty fee of up to almost 4%. Direct-buy exchanges also support
Peer-to-Peer
At times the cheapest option to purchase Bitcoin is peer-to-peer trading, directly via an escrow service.
For this method, LocalBitcoins is a prime example of a functional platform.
Users have reviews, ratings and trade history, along with preferred payment methods.
Vendors and buyers are also able to set bidding prices, depending on how much of a rush they are in, alternatively what form of payment they’re deciding on using.
While LocalBitcoins is a great site, you must be cautious when selecting your vendors to buy from.
Tether
Tether is now a globally recognized cryptocurrency, which was created for a sole purpose — simple purchase of other cryptocurrencies.
As a result, the price of a Tether coin is always floating within a 3% margin of $1.
Most prime cryptocurrency exchanges support Tether, such as Bittrex, Binance, and Bitfinex.
For this reason, Tether is a convenient cryptocurrency to hold, should you want the instant exchange to Bitcoin at competitive rates.
Cash Buy
While the riskiest of all, as another form of peer-to-peer trading, cash buying is often the cheapest.
Depending on your location, there may be an imbalance of supply and demand.
This is something you can take advantage of and get more bang for your buck.
Be aware of scammers and cash buys. Always check the balance of the proposed account you’re buying from and ensure you meet in a safe public place, such as a busy cafe.
Bitcoin ATM
Thanks to its simple usability, Bitcoin ATMs are becoming a popular way for the conventional consumer to buy Bitcoin.
With multiple large cities hosting hundreds of them, even random locations around the US, UK, and other major economies are integrating ATMs.
The process is simple – buy Bitcoin with cash or your credit card.
Saying that ATM prices are entirely dependent on the owner/company of the machine, often resulting in ridiculous margins. It’s surely convenient for emergencies.
Exchange Other Cryptocurrencies
Last but not least, exchanging alternative cryptocurrencies for Bitcoin is dead simple.
To link to a previous example in the form of Coinbase, let’s say you buy some Ethers.
The transactions fees are marginally cheaper to do so. It makes sense to store your funds as Ethers, should you require moving it around from wallet-to-wallet.
Once you understand various cryptocurrencies and their functionalities, you’ll realize which ones are most convenient for you to use on a regular basis.
Once you need Bitcoin, simply head over to one of the aforementioned exchanges and you’re ready to get your BTC in less than 2 minutes.
7 Types of Bitcoin Wallets — Fund Safety
Before buying bitcoin, or selling products for bitcoin on your website, learn about storing your coins safely.
As a primary rule of thumb, storing Bitcoin on an exchange can be a risky decision to make.
I recommend selecting a convenient wallet — highlighting the word ‘convenient’.
Moving Your Bitcoin Safely
The reason wallet convenience is equally as important as safety is due to moving funds.
Should you decide to want to move your funds, the ability to be able to do so instantly is key. Many users of Bitcoin under-rate this quality when selecting a wallet.
Moreover, there are 7 main wallet types to consider.
- Hot Wallet
- Cold Wallet
- Desktop Wallet
- Mobile Wallet
- Hardware Wallet
- Digital Wallet
Do bear in mind, these wallet types overlap, since they act as wallet ‘qualities’.
Hot Wallet
A hot wallet is a wallet that is online and directly connected to the internet. While convenient, being hooked to the internet can mean more associated risks.
Cold Wallet
Cold wallets are offline wallets, as opposed to hot wallets.
They can come in form of a paper wallet, which simply consists of your private key and public key, alternatively hardware or desktop.
As a long-term method of storage, cold wallets are your best shot.
Desktop Wallet
In terms of compatibility, many desktop users still prefer software which runs smooth and is easily accessible from the comfort of your home. Desktop wallets are however slowly getting out of date.
Mobile Wallet
Back to the word convenience, mobile wallets are the fastest to use. Even though they’re usually fast and handy, safety isn’t their strength and neither is their user-interface.
Many mobile wallets still suffer from bugs and glitches. Mobile wallets are great if you’re looking for shifts from funds extremely frequently.
Hardware Wallet
Perhaps the safest option of all is a hardware wallet. They come in forms of usually USB compatible gadgets, with extreme security measures. Good examples you can take a look at are Ledger and Trezor.
As cold wallets, they are highly recommended for long-term storage.
Digital Wallet
Digital wallets mostly come in the shape of a web wallet. These can be accessed via a URL, alternatively as a browser plugin.
Similarly to mobile wallets, do not use digital wallets for long-term storage. They do however do the job for paying your hosting bill from.
What is Bitcoin Mining?
The bitcoin network is maintained by ‘miners’. Individuals and companies employing specialized bitcoin mining equipment, based on application-specific integrated circuits.
The Role of Bitcoin Miners
Miners resolve complex crypto puzzles to verify transactions. It takes several confirmations to finalize each transaction.
Miners are rewarded with blocks of new bitcoins, currently 25 bitcoins (or BTC) per block, which is mined every ten minutes. Miner rewards are halved every 4 years, so is the supply.
How Does Bitcoin Mining Work?
In the early days, bitcoin could be mined using standard CPUs and GPUs, but, due to the “hash rate,” this is no longer the case.
Due to the amount of processing power required, premium Bitcoin mining hardware is essential. This, along with the cost of electricity, means that few hobbyists will make money mining bitcoin now.
Instead, much of the ‘hashing power’ now comes from industrial-scale mining operations, rather than a decentralized P2P network supported by enthusiasts.
While you can create your own mining environment, perhaps to mine another currency, technical knowledge is vital.
What is Cloud Mining?
If you want to try mining bitcoin without the risk of purchasing hardware, you can sign up for cloud mining.
On a basic level, you buy a contract that funds a large, remote mining company who will then pay a small dividend back.
Currently, there are two main forms of bitcoin cloud mining:
- Hosted Bitcoin mining, where you lease a bitcoin miner hosted by a third party, usually in a data center with access to cheap electricity and cooling.
- Leased hashing power, where you lease a certain amount of hashing power, not a dedicated miner.
Word of Advice
Remember: the best way of making money in a gold rush is selling shovels, not digging for gold. Do your homework prior to signing a contract with a mining company.
Understanding Fractionate Bitcoin Values
The number of bitcoins is finite, just under 21 million. Coins are highly divisible. T
he table below shows some of the units that are often used when discussion bitcoin pricing:
| Unit | Name | Value | Description |
|---|---|---|---|
| BTC | Bitcoin | 1 | One bitcoin |
| mBTC | Milli-bitcoin | 0.001 | One-thousandth of a bitcoin |
| uBTC | Micro-bitcoin | 0.000001 | One-millionth of a bitcoin |
| Sat | Satoshi | 0.00000001 | One hundred millionth of a bitcoin |
Other Practical Uses of Cryptocurrencies
Bitcoin was a geeky curiosity for years but has recently attracted mainstream merchants and venture capitalists.
As such, it’s become more than a currency.
But what can you use it for, apart from paying for web hosting?
Cryptocurrencies for Crowdfunding
Cryptocurrencies are now a popular source of crowdfunding in the form of Initial Coin Offerings (ICOs), creating a sense of competition with venture capitalists.
There are currently more than 1,400 cryptocurrencies. Each represents a unique product, aside from also providing a form of payment.
Bitcoin and cryptocurrencies allow the funding process to be simplified compared to traditional methods.
Due to decentralized consensus, contributors get a proportionate chunk of the voting rights and tokens when participating in an ICO.
Birth of an Initial Coin Offering
Setting up an ICO is a three-step process:
- The business publishes a whitepaper on the technical aspects of the proposed product, usually with a light beta version to present
- The ICO is marketed to gain traction for network-wide adoption
- The business launches the currency, collects funds, and distributes tokens to investors.
Yes, it’s simple – although regulation can be expected very soon, due to the rising amounts of Ponzi schemes.
Cryptocurrencies for Payment
Cryptocurrencies like bitcoin include facilitating online transactions, particularly micro-transactions in games and apps.
Many cryptocurrencies can be used for this purpose.
Bitcoin is arguably the most widely adopted, however, it is not necessarily the fastest or cheapest for business use.
Value and Exposure of Bitcoin
As bitcoin has increased in value and exposure, its transaction fees have risen, and confirmation times have slowed.
Often, a speedy transaction is only possible if the sender pays a high fee.
This is an obstacle for some businesses that require near-instant confirmation to sell goods or services.
How to Take Bitcoin Payments on a Website
If you want to create an e-commerce site with support for bitcoin payments, the whole process can be outsourced to payment processors such as BitPay or Coinbase.
This means your business can accept bitcoins without actually holding any of its own.
Third-Party vs Direct Payments
Using a third-party payment processor incurs fees, but this will provide a degree of security and fraud protection. The process is very similar to using a traditional payment processor.
If you want to be paid directly in bitcoin, without a third party being involved, you will need to choose a suitable wallet and list the payment address on your site.
This option, of course, takes extra administrative work to keep track of fund flow.
Security, Law, and Tax When Handling Bitcoin
Any time you accept bitcoin payments, you should invest in security.
Bitcoin is a huge target for hackers. Popular exploits include primitive DDoS attacks, allowing hackers to ransom unprepared Bitcoin-friendly businesses for large sums.
Hacker Incentives for Attacks
Often, these hackers are more interested in your bitcoin than your website. They may also be hoping to exploit or blackmail you.
Beware of phishing attacks, and use cold wallets if you need to store bitcoins long-term.
Possible Legal Issues
Some bitcoin-related activities can also result in legal ambiguities, depending on your jurisdiction. Taxation isn’t always clear-cut, for example.
It is best to consult professional accountants and lawyers that understand cryptocurrencies.
Forums such as bitcointalk.org are a brilliant source of fresh information but don’t mistake amateur advice for professional guidance.
Is Bitcoin the Right Choice for Your Business?
Cryptocurrencies, including bitcoin, are grabbing headlines around the world.
Before choosing a bitcoin web hosting company, consider whether it will offer you tangible benefits.
Bitcoin has struggled to handle the large influx of new users, hence why the average transaction fee is now sky-high.
You need to ensure that your plan offers you comparable benefits to a traditional, non-bitcoin hosting provider.
If you understand the basics of hosting, you should be safe.
Selecting the Right Host for the Right Reasons
But bear in mind that this is a niche market, and you won’t find many well-known providers using cryptocurrencies yet.
In terms of wider business use, consider whether the benefits of bitcoin outweigh the risks.
In particular, slow transactions and high fees have caused some businesses to pause their bitcoin implementations, or row them back.
Small businesses need to weigh up the number of customers likely to use bitcoin vs. the resources required to implement it.
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Pros and Cons of Bitcoin Web Hosting
Bitcoin hosting can be a useful alternative to conventional website hosting. You will find big brands and small providers in this space.
Pros:
- Payment efficiency: You may find that payments are simpler than they would be when using a payment card.
- Privacy: While some companies will require your details to set up a web hosting account, you may enjoy increased privacy when paying with bitcoin. Remember, though, that bitcoin is never completely anonymous.
- Enthusiasm: If you enjoy using bitcoin, you may want to support the businesses that are using it in the real world.
Cons:
- Complexity: Bitcoin isn’t an easy concept to understand at first, and it’s easy to send payments to the wrong place. Unlike traditional payments, bitcoin has no regulator or refund mechanism. If you’re new to the technology, it isn’t wise to start sending large amounts of money through the network, particularly if you don’t know and trust your hosting provider.
- Accounting: Depending on your jurisdiction, you may be able to account for hosting costs under expenses. But your use of Bitcoin payments may make it more difficult to provide proof, and some accounting software won’t provide any way to record your transactions in bitcoin.
- Currency fluctuation: Unless your provider converts your invoices on the fly, you may pay more than you’d pay when using traditional currencies.
Best Hosting Providers Who Accept Bitcoin
For now, there are a limited number of hosting providers that accept Bitcoin, although the number of adapters is expected to grow rapidly. In fact, they are!
Namecheap
Namecheap is one of my favorite bitcoin hosting providers. It has the clout of a big brand, a seamless user interface, and the simplicity of bitcoin payments for web hosting.
You can pay for most of its packages with bitcoin, as well as host add-ons.
Plans are inexpensive, and Namecheap has a good track record in the industry.
Krystal Hosting
Krystal Hosting is a newer entrant to the market. It was rebranded from Smart Hosting, and since that point, Krystal has become a prominent bitcoin web host.
It offers most of the features that you’ll likely need, including a one-click installation of WordPress, and easy-to-use webmail.
Krystal is slightly more pricey than Namecheap.
Awardspace
If you’re on a budget, consider our last option: Awardspace.
Its shared hosting option is priced to compete with some of the cheapest providers on the market.
With a great support team, Awardspace offers guaranteed uptime as well as a solid range of features for new and experienced webmasters.
Should you want to try the product first, there is also a free hosting option that you can use to sample its service.
Other features in Payments
Bitcoin Frequently Asked Questions
- I am thinking about accepting bitcoin payments on my site. How complicated would this be?
Accepting bitcoin is a straightforward affair if you choose to use a payment processor like Bitpay or Coinbase.
They offer ready-made solutions that are easily implemented. You could also accept bitcoins simply by listing your bitcoin wallet on your site (for donations, tips and so on).
- Is bitcoin secure and stable?
If you are using a bitcoin payment processor, you should be okay on both fronts. By using such services, you would not be holding any bitcoin, as the processor would exchange every transaction and you would get the payment in dollars or another currency.
However, if you just use your bitcoin wallet, you need to make sure it is secure. What’s more, you open yourself up to the volatility of the bitcoin value.
- Who is bitcoin meant to be used by?
Bitcoin has a mixed reputation because it enabled the creation of sites involved in illegal activities like Silk Road. The currency is pseudo-anonymous and can be used for illicit trades. However, many legitimate businesses have started accepting bitcoin as well.
- How anonymous is bitcoin? Does this mean nobody can trace transactions?
Not really. All transactions are recorded in the bitcoin blockchain, which is essentially an open ledger. Every transaction is visible, but can be easily anonymized. Like all currencies, bitcoin can also be laundered.
- Who controls bitcoin?
The short answer would be nobody. It is a decentralized, open-source currency. However, some groups involved in promoting bitcoin and blockchain technologies have a lot of influence. But bitcoin is not regulated.
- Can someone seize my server for hosting a bitcoin site?
Yes, this is possible if your visitors become involved in illicit activities. Many central banks have issued warnings along those lines. Even if you run an entirely legitimate business and if your services are taken advantage of by criminals, you could be investigated.
- Should I worry about bitcoin heists?
If you are just dealing with a hobbyist site or community site, you can probably use just industry standard security.
However, if you plan to host a bitcoin exchange or other service, you will need top-notch security, as you will be a prime target for cyber criminals.
Take every precaution you can — regardless of what level you are working at.
- Why are hackers drawn to bitcoin?
There is no logical explanation. Hackers may waste days of work and weeks of research just to steal tiny amounts of bitcoin that clearly aren’t worth the trouble.
A bigger issue is that bitcoin is often used as a currency on the dark web, to hire hackers. It is also used as the currency of choice for most ransomware.
- How complicated is it to buy a few dozen miners and resell them in cloud mining packages?
You should have no trouble finding hardware and a datacenter willing to install it for you, but this is hardly a safe investment at this point. Many people have lost money on bitcoin mining.
- If I accept bitcoin payments, is there a chance I could be breaking the law?
Bitcoin is not regulated, but in some jurisdictions it can be very problematic.
You need to consult legal experts and your local bitcoin community prior to making any decisions that could lead to an investigation by tax authorities.
In addition, a lot of banks simply don’t want to do business with bitcoin companies due to reputational risk.
- Is it worth the trouble to add a bitcoin donation button on my site, or even accept bitcoin payments for promotional value?
Possibly. If you want to accept bitcoin as a publicity stunt, as a way of getting coverage on bitcoin news sites, or as part of a wider SEO strategy, it might be worth a try in some niches.
If you do so, your best option is to choose a payment processor to handle everything.
- Who accepts bitcoin? Can I use bitcoin to pay my hosting bill?
A lot of merchants have started accepting bitcoin over the past couple of years, but adoption remains very low.
There are a number of hosting companies that currently accept bitcoin, along with some software firms and individual developers. However, most don’t – they prefer traditional currency instead.
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