Are you interested in buying Bitcoin in South Africa? It’s normal to feel a bit clueless when you are starting out, which is probably why you have stumbled upon this piece. The world of cryptocurrencies often takes time to understand so, sit tight, and we will guide you on the nuances of buying Bitcoin in South Africa.
This has been put together as a beginner’s guide on how to buy Bitcoin without the jargon so you can easily grasp the fundamental methods to buy Bitcoins.
What is Bitcoin?
Bitcoin is one of the most popular cryptocurrencies. It is a digital asset, a kind of digital currency. Bitcoin operates on a decentralized system without the need of a central bank or an admin for that matter. Bitcoin can be sent between users via a peer-to-peer blockchain network without any intermediaries in between.
Transactions happening within the Bitcoin network are verified via cryptography and posted on a publicly distributed ledger. It was invented anonymously by a person or a group who went by the name Satoshi Nakamoto in the year 2008. New Bitcoins are produced through a process called mining, which is essentially a form of reward for verifying transactions and keeping the network secure.
The coin supply, however, has been limited to 21 million but you can purchase even small fractions of a Bitcoin.
5 things you should know before you buy Bitcoin
As the world becomes more reliant on internet and digital assets, Bitcoin has become an unavoidable topic and it has garnered a lot of attention in the last decade. Bitcoin is publicly available and global, which essentially makes it more accessible as opposed to traditional banks which is why investors are intent on investing in Bitcoin.
Here are a few things you’d want to know before you settle on buying or investing in Bitcoin.
- Price of Bitcoin
Bitcoin doesn’t have a fixed price. It is set by market forces of demand and supply. The price of Bitcoin in rands is 1,25,945.30 at the time of writing.
Bitcoin has been known for its ability to touch sky high prices.
- When to invest or buy Bitcoin?
With the market being so volatile, to begin with, it’d be hard to locate the right time of investment, although Bitcoin has increased in value progressively with downfalls before it stabilizes again. There are tools like Cryptowatch or Bitcoin Wisdom which help you analyze price charts. It would also give you an idea of what to expect.
Bitcoin is a global currency and is not regulated by any government or agency and global chaos is somehow seen as a form of a silver lining for Bitcoin pricing since it is outside the direct influence of any government, so an ideal time to invest would be when the price slides down.
- How to invest and where to invest?
The mechanism for buying cryptocurrency would vary depending on the country. For instance, In Africa, you can either choose to exchange on global platforms like Bitfinex, CoinSwitch, Griffex, Binance, and Coindirect.
- Securing Bitcoins
There are several ways to secure your Bitcoin assets. Like most valuable assets, Bitcoin is also an easy target for thieves, scammers, and hackers. You should always take proper measures to safeguard your investment.
Like for instance, you can opt for Bitcoin cold wallets. They are the most secure ones amongst Bitcoin wallets. There are hardware wallets which are cold wallet variants. Examples being, Trezor and Ledger Nano X, where the former is a hardware wallet which helps you store Bitcoin keys offline. The latter, however, is also a secure wallet that offers offline storage for your private Bitcoin keys.
Just like you can’t trust anyone with your gold assets, Bitcoin is also a valuable asset which needs safekeeping from any intrusion. Even though Bitcoin is secure in itself, better safe than sorry, right?
- Should you invest?
The mining industry for Bitcoin has also garnered a lot of traction as of late. Mining which used to happen on personal computers can be done on specialized hardware or centers dedicated to mining.
These data centers are filled with machines capable of mining extensively but it takes a lot of capital to start off with mining. Therefore, it is not a profitable venture for beginners. For mining, you’d fundamentally need a lot of time, capital and physical space.
Before you move to the next step for investment, understand what Bitcoin is and the way it works. Once you are done with your basics, you’d relatively be more ready for an investment.
3 ways you can buy Bitcoin in South Africa
- Use a Bitcoin Exchange or Platform
A Bitcoin exchange will be acting as an intermediary between you and the seller. It is essentially a brokerage platform where you can transfer your funds via your preferred payment method such as bank transfer, fiat payment, wire transfer et al. You will often have to pay a service charge associated with the platform. If you find a trader who will be trading between other cryptocurrencies, then you’d have to pay a conversion fee as well. This is quite similar to traditional banking methods where you have to pay a conversion fee when trading in money from different countries.
Pros of Bitcoin Exchanges or Platform
There are several benefits to using exchanges such as these. They are as follows:
- You can trade Bitcoin any time of the day, all around the week. It adds dynamicity to the way you perform trades and transactions.
- Due to its deflationary nature, Bitcoin is a well-suited for long term investments.
- You can transfer your BTC asset to anyone in any corner of the world.
- Maintains security protocols and regulations.
How to choose a Bitcoin exchange in South Africa?
With so many Bitcoin exchange platforms at hand, you can easily be confused. There are a few things you’d need to remember before choosing a Bitcoin exchange in South Africa. They are as follows:
- Make sure that the platform is compatible with South Africa. If so, then read up on regulations if any. SARB or the South African Reserve Bank doesn’t have any regulatory structure to accommodate or monitor virtual currencies. However, what an individual does is at their own volition and risk. But following these steps would keep you as safe as possible.
- Have a look at the security protocols followed by that platform such as PGP encryption and 2-factor authentication. Lookup for instances of that platform getting hacked or any suspicious activities linked with that platform.
- Always have a look at the fine print to see the transaction cost. Trading and transaction fees differ depending on the platform.
- Check if there are any limitations to the number of transactions or amount of Bitcoin you can buy. Some exchanges have a 24-hour period window for withdrawal along with other nuances as well.
- Check the number of currencies they support.
- Make sure that the platform you are choosing has a credible after-sale and customer support that will quickly respond and resolve issues. Look up for the customer response time of exchanges or for user reviews of that platform.
- Scour through Bitcoin groups and online forums to check out the reviews of various platforms.
Popular exchanges in South Africa:
These are some of the popular Bitcoin exchanges and platforms to buy Bitcoin in South Africa.
- Quick transaction
- You can track trader footprint
- You can chat online
- CySEC regulated site
- The deposit has to be in USD
- Deposit amount is $50
- Higher withdrawal fee
- They are active in over 180 countries
- They allow cash deposits
- Quick transaction within minutes
- Fees can be as high as 12%
- Low transaction fees
- Fast KYC
- Rewards for transactions
- Secure Wallet
- Credit/Debit Cards and Wire Transfers
- Not many cryptocurrencies supported
- You can find sellers in your area
- You can pay with fiat if you wish to
- Exchange rates are fair
- Seller rate will vary
- It’s Bitcoin only
- You can trade using ZAR
- It is reputed
- You can trade while learning at the same time
- You have to make a minimum amount of deposit amounting to $250 either with a debit card or a credit card.
- Fees are applied to trades and payments.
- Easy to use interface
- Quick transactions
- Low transaction fees
- You can only use digital currencies
A step-by-step guide to buying Bitcoin South Africa
- Choose a Bitcoin wallet
Before you decide on investing in Bitcoin, you will need a Bitcoin wallet to begin. These wallets will help you store your private keys which give you access to the Bitcoin addresses.
There are any number of wallets out there, here are a few which you can choose from:
- Hardware wallets like Ledger Nano X or Trezor can effectively keep your Bitcoin private keys secured in a way that it’s away from any malicious entities because these hardware wallets store these keys offline, away from internet connectivity.
- Desktop wallets like Exodus or Electrum are software applications which can be downloaded on your PC. They will store your private keys on your system hard drive.
- There are mobile wallets too. Coinomi and Jaxx are two popular ones which help you manage Bitcoin on your mobile device platforms like iOS and Android.
- Griffex Wallets, Blockchain Wallet and Green Address are three examples of web wallets. These web wallets are ideal if you need to use them for daily transactions.
- Paper wallets will allow you to print your BTC private and public keys. You can keep the paper wallet stored somewhere safe and access them when you need to.
- Choose a cryptocurrency exchange or platform
This would determine the place you will be dealing with most of your Bitcoin assets. There are hundreds of platforms but choose the ones globally recommended and compatible with your country’s currency.
There are three primary kinds of platforms for Bitcoin or buying other cryptocurrencies:
- Bitcoin Brokers: They are often the easiest and quickest way to buy and sell Bitcoins. They allow various payment methods for your purchases. You can either offer Fiat (crypto enthusiasts call paper money fiat) or other conventional methods of payment. Brokers with their user-friendly platforms allow familiar payment methods for users to help them transfer their assets. They have a higher fee for their services. CoinSpot and Coinbase are two of the best-known broker platforms for cryptocurrencies like Bitcoin.
- Trading Platform: Binance is a trading platform where the users can buy Bitcoin via other cryptocurrencies. Their service fee is low as opposed to brokerage platforms. They also give you access you to a varied range of coins but you’d be required to own other cryptocurrencies to use an exchange such as this. So, naturally, it is not the best option for beginners.
- Peer-to-peer or P2P exchanges: These exchanges simply remove the intermediaries and allow users to trade with one another. The seller can also exercise their freedom by specifying the price they are looking for, their payment method et al. These exchanges will also allow you to trade with an added layer of privacy. However, users might have to settle for higher prices as opposed to the market evaluation or exchange rate. Paxful and Local Bitcoins are two such examples of P2P exchanges for Bitcoin.
- Buy Bitcoin
This step would entail the finalization of your order which you will be placing on your preferred platform. For first time users, Bitcoin brokers are the most convenient of all options. First of all, you’d need to sign-up for an account irrespective of the website you choose. There are specific sets of regulations that each of these platforms have, so be sure to read them up. For some platforms, you’d be asked for your email address to sign-up or even asked for ID proof along with contact information. This is a fundamental step you’d have to comply with in order to access their services.
Once you are through with your verification, you will need to specify the amount of Bitcoin you’d like to purchase along with the payment method you are going to choose. Review the total cost and fees of the transaction before placing your order.
The steps that will follow will depend on the payment method you have chosen and the platform you are using. Keep reading the steps and confirm your purchase accordingly.
How can I pay for Bitcoin in South Africa?
There are various ways to buy Bitcoin in Africa. Here are two such methods which will be further described below.
- Browse a P2P Directory
What is P2P directory and how it works?
P2P directory is a platform where you can connect with other buyers and sellers without intermediaries. In that both parties set the terms and conditions of the trade they want to do and is agreed upon by these two parties only without any intrusion from a third party, It uses Peer to peer technology. Peer-to-peer (P2P) computing or networking is a distributed application architecture that partitions tasks or workloads between peers. Peers are equally privileged, equipotent participants in the application. They are said to form a peer-to-peer network of nodes.
How to buy Bitcoin with P2P in South Africa?
You can avail of Paxful which is a famous p2p marketplace for buying and selling cryptocurrency in South Africa. Users can choose from various payment methods. The vendors usually accept various payment options which can be over 300+ including PayPal, gift cards and even bank transfers.
List of P2P platforms:
These are some of the best-known P2P Bitcoin platforms:
Local finder for sellers with private links.
You can find local sellers to buy your Bitcoin from.
No KYC required. It maintains absolute privacy and relatively new since it was launched in the summer of 2019.
Globalized P2P trading platform which requires no KYC OR AML.
You can make purchases with Fiat and buy Bitcoin quickly which often takes up to 10 minutes.
Payment method for p2p
There is a range of payment methods which largely depends on the seller or platform you are choosing.
- Use a Bitcoin ATM
What is Bitcoin ATM directory and how it works?
A BTC ATM is essentially a kiosk which helps a person buy Bitcoin, either by using fiat or debit card. Some ATMs offer functionalities that are bi-directional that enables sale and purchase of Bitcoin at the same place.
There are two primary kinds of BTC ATM: ATMs and cash kiosks. Both of these two types are linked with the internet allowing you to process payments. The Bitcoins are given in the form of a receipt or by moving it to an address.
How to buy Bitcoin with Bitcoin ATM in South Africa
Cape Town, Johannesburg, Pretoria, and Nelspruit are the major cities that have BTC ATM installed. You can simply locate them using a BTC ATM finder online and use debit or fiat to get your BTC assets. This ATM often looks like the traditional ones which connect you to your bank account to enable cashless purchase.
Payment method for Bitcoin ATM
Debit, Bank Transfer and Fiat are the preferred methods of payment for BTC ATMs.
What can you do with your Bitcoin?
You can convert your BTC assets to any other cryptocurrencies of your choice or even turn them into fiat.
You can use Bitcoin for services and products that accept it as a payment method or you can continue trading or invest in Bitcoin-based start-ups.
You can transfer BTC over to anyone who uses Bitcoin.
You can even send BTC as a form of gift to people or to build a new partnership.
Other ways to get Bitcoin
If you want alternative methods of getting Bitcoin, these are the options you can go for:
- Mine Bitcoin: It can be very hard and mostly requires a lot of capital and resources. If you have both, then you can start earning Bitcoin through mining them.
- Charge Bitcoin in exchange of services and goods: You can ask or request for payment in Bitcoin.
- Free Bitcoin: There are several credible ways to earn small amounts of free BTC overtime via online games and BTC faucets. It can be time-consuming.
- OTC: Over the counter, brokers can offer good rates at times.
What is the next step?
If you are looking to buy Bitcoin in South Africa, you can do so by following the steps and pieces of advice written in this piece. Although the research and price comparisons should be done at your own volition, once you are done checking out the factors, choose a platform, sign-up and start trading right away. You will know when you are ready.