Digital currencies have taken the world by storm. If you are reading this article, then you are one of those people who have felt its impact on your local economies, in the international business world, and in trade. The future is indeed crypto; you can now perform many different tasks and financial transactions using your crypto wallet. With all the different currencies that exist, Bitcoins are the most popular and the oldest form of cryptocurrency that exists. If you are in South Africa and would like to jump on the crypto train, we are here to provide you with a step-by-step guide to buying bitcoins.
What is bitcoin?
As we mentioned earlier, bitcoin is the oldest form of crypto, dating as far back as 2009. Since it was new and many people didn’t quite understand what it was, it took a while for it to gain popularity. Now, it is a recognized payment method, and it is also precious. Let’s say it is digital gold. Or, to put it in another way, bitcoins are money that you cannot see or touch, but you could be super rich if you have.
Is it legal?
Buying and selling crypto assets is permitted in South Africa, subject to applicable tax and financial-services requirements. Bitcoin is not legal tender and is not guaranteed by the Reserve Bank. Check that a service provider has the relevant FSCA authorisation, and understand that you can lose the money invested.
How to buy bitcoins?
To lower your risk of losing, you should invest rightly and check all of your options. You want to make sure that you are carrying out the transactions legally and within a safe and secure framework or system. You need to have a bitcoin wallet. Several mobile applications and websites offer you the chance to buy bitcoins, make payments and check your balances.
One service available for buying bitcoin in South Africa is by using Luno’s services. With them, you can make payments for bitcoin using money from your bank accounts, and when you sell, you can as well transfer the funds to your bank account. You can also store your coins on their website.
How to buy bitcoins using Luno
Step 1: sign up on Luno
If you are an IOs user, you can download the Luno app from the app store or play store for android users. You can also decide to sign up using the web version. You can register using either of their platforms at no cost.
- To register, simply input your email address and password in the corresponding fields. Luno will send you an email to confirm your account.
- Open your mailbox, and open the email from Luno. In it, there will be a ‘confirm email address’ button highlighted.
- Click on the button and you will be redirected to the Luno website.
- To complete your registration, click on continue.
Step 2: Verify your Luno account
Now that you have registered, you will also need to verify your account. This goes as far as verifying your identity to ensure that you are who you say you are. Go to the settings in the menu and click on “upgrade”. This will require that you add your personal information, including bank statements, proof of residence, and as well as identification documents, and upload digital copies of those documents.
Luno’s South African rand limits depend on verification. Level 1 has a R15,000 lifetime deposit and withdrawal limit; Level 2 permits R50,000 per month; fully verified accounts have no standard rand deposit or withdrawal limit. Other transaction and crypto-send limits can still apply. Check your profile and Luno’s current limits before transacting.
Step 3: put money into your account.
After signing up and verifying your account, you will be able to make a deposit into your newly created account. You will then be able to buy coins with the money in your wallet.
- To make your first deposit, click on ‘wallets’
- Once the link opens, choose the ‘deposits’ option
- A list of banks will be displayed, select the bank you use from the list.
- When you have done this, click on next and you will be able to specify the amount of money you want to deposit.
- Use the reference number that appears on your screen to make the payment from your bank account to your wallet.
- It will take approximately 2 days for the transaction to be cleared and transferred to your wallet.
Step 4: make your first purchase.
You can make your first purchase by using either of the methods discussed in these steps. You can not purchase without first making a deposit, so ensure that the bank has cleared your deposit before attempting to buy some coins. Use Luno’s instant pay feature to make your first purchase. You will be required to pay a fee for using this feature.
- Click on the ‘buy/sell’ button and indicate the amount you would like to buy or sell.
- To complete your order, click on ‘buy’.
Step 5: make a purchase using a buy order.
If you don’t want to use the instant pay feature, after reviewing the applicable exchange trading fees, then you can use a buy order to make a purchase.
- Choose the exchange option in the menu bar. Then select ‘buy order’.
- To make a request, select the ‘place order’ option. This order will allow sellers to try to meet your order.
- When you are ready to finalise a purchase, choose the ‘place buy order’ option.
And with those steps, you will be able to conveniently buy and sell bitcoins from your mobile devices and your computer safely and securely.
To make sure your transactions and funds are safely stored, you may want to consider these things:
Store in a wallet
Use wallets such as Luno and others to safely store your coins and perform any transactions online. Wallet safeguards reduce some risks but cannot guarantee against theft, scams, lost access or platform failure.
Do not have direct dealings with friends.
Most of the time, you want to buy or sell your coin with friends and peers. This isn’t very ideal because you are not quite sure you can trust the person you are dealing with. Since there is no regulatory body or a third party system governing the transaction, the only thing you have to fall back on is trust which sometimes may not be enough.
Also Read: How to Claim From the Road Accident Fund in South Africa
Make sure you have a backing.
To ensure that your funds are safe, use brokers that are regulated and backed by reputable banks. You stand a better chance of carrying out your transactions safely if you have proper backing.
Crypto trading can produce losses as well as gains, and no profit is guaranteed. Review the costs, custody risks, volatility and tax consequences before deciding whether it fits your circumstances.
