How to buy Bitcoin in South Africa: a guide • Benzinga

Since the publication of "Bitcoin: a peer-to-peer electronic payment system" in 2008, cryptocurrencies have revolutionized our concept of money. Today you can use bitcoins for pay for goods and services all over the world.

Bitcoin, the original cryptocurrency and the current standard for them, has led the market. Many experts considered it the best cryptocurrency exchange because of its greater liquidity.

Once you have decided to buy and sell bitcoins, you need a unique bitcoin address or cryptographic portfolio where you can keep your bitcoins. A bitcoin wallet address works like an email address and can be used to pay for goods and services and receive payments and gifts.

The software keeps your wallet on your computer, tablet or mobile device and / or a web-based portfolio can be used. However, you may want to avoid keeping your bitcoins in an exchange, as they may be vulnerable to hacking.

Overview: Bitcoin purchase in South Africa

Various countries in Africa have started to develop a market in cryptocurrencies and blockchain technology. Furthermore, South Africa's main regional economic hub currently leads the rest of the continent in the adoption of cryptocurrency and in the development of blockchain.

Besides being a medium of exchange, Bitcoins have become an alternative vehicle for trading and investments in South Africa. While buying bitcoins in South Africa is relatively easy, finding a suitable broker or exchange to buy can present more than one challenge.

Not all brokers will hire South African customers, but the award-winning forex broker, ETF and XTB cryptocurrency currently accepts clients from the country.

With regard to taxation, South African services (SARS) do not define the word "currency" in the Income Tax Act. This basically means the cryptocurrencies themselves are not subject to taxation.

Sars states: "Cryptocurrencies are neither official South African offerings nor widely used and accepted in South Africa as a means of payment or exchange. As such, cryptocurrencies are not considered by SARS to be a currency for tax purposes. on income or capital gains tax Instead, cryptocurrencies are considered by SARS to be intangible assets. "

However, the value of any given amount of cryptocurrency can be determined in South African Rand (ZAR) based on the exchange rate. This means that any income or income deriving from cryptocurrency trading may be subject to taxation according to the gross income law. Basically, any South African deal in cryptocurrencies may be subject to tax on income derived from trading.

Despite the mistaken perception of the complexity of cryptocurrency trading, the process can be very simple for anyone with a bank account. The rest of the article will provide detailed instructions on how to proceed with the purchase of bitcoins in South Africa.

Step 1: Open an account for a cryptocurrency exchange

Before you dive into Bitcoin trading, you should be fully aware of the risks and have some knowledge how to exchange cryptocurrency. To start, it is necessary have a bank account with money be able to upload or deposit money in an exchange, even if some exchanges accept payments with PayPal, credit cards and electronic funds transfers (EFT).

So, it is necessary open an account for a cryptocurrency exchange accepting users from South Africa to start buying and selling bitcoins. South Africans generally use two crypto-trades for trading: iceCUBED (ice3X) and Luno.

Both exchanges accept deposits from bank accounts that, once deleted, allow to exchange bitcoins. Exchanges are the safest and safest way to buy bitcoins for people just starting out.

IceCUBED allows its customers to buy and exchange bitcoins, as well as many other alternative cryptocurrencies known as altcoins. Other scrambles available for sale include: Litecoin, Etherium, Dogecoin, Bitcoin Cash, Ada, Dash, Neo and Montero. IceCUBED also offers a & # 39; mobile trading app for iOS and Android devices and its desktop trading platform is illustrated below.

Currently the Luno exchange only offers exchanges in Ethereum and bitcoin and includes a & # 39; mobile trading app. After opening and using your account with an exchange, you can withdraw your bitcoins from the exchange in your personal bitcoin wallet. In the picture below is Luno's bitcoin trading interface.

In addition to using the two local exchanges, South Africans can buy and trade bitcoins through:

• LocalBitcoins.com: This website specializes in networking of local people who are looking to buy and sell bitcoins. The site allows you to advertise if you want to buy or sell bitcoins and allows you to trade using the localbitcoins.com website. Negotiations generally take place with bank transfers and escrow accounts, but it is possible to make arrangements to meet other bitcoin traders in person and exchange money.
• Purchases by credit or debit card: If you plan to use your credit or debit card to buy bitcoins, you can visit CEX.IO. After registering and inserting the credit card into the system, you can deposit funds and finally buy bitcoins. Bitcoin transactions must be in EUR or USD on the CEX.IO bag, which charges a 3.5% credit card fee plus a commission of $ 0.25 for deposits.
• Buy and sell bitcoins at a Bitcoin ATM: The first bitcoin vending machine appeared in Sandton City, in the north of Johannesburg. The BTM can be used to buy and sell bitcoins in exchange for cash during normal business hours. However, in order to use the bitcoin distributor, you need a bitcoin wallet installed on your smartphone, which has the QR code that can be read by the BTM and used to deposit or withdraw the bitcoins that have been exchanged. BTM also buys and sells Bitcoin Cash, Ether, Dash, Litecoin, Zcash, Monero and Dogecoin.

Step 2: Get a Bitcoin wallet

If you want to keep full control over your bitcoins, you must withdraw them from the exchange or other source in which they were purchased in a personal bitcoin wallet. Basically, a bitcoin wallet consists of software that allows you to communicate with the bitcoin network.

The wallet software gives you the ability to notify the network when you want to send and receive transactions. Could be installed on a desktop, tablet or smartphone. Alternatively, you can use a Web-based portfolio that does not require download. For an extremely secure bitcoin memory, you can purchase a hardware portfolio, which consists of a peripheral device connected to a network.

Each portfolio account consists of two elements: your public address, which is like an email address used to receive bitcoins, and your private key, which would be the equivalent of your password in an email account. Your private key allows you to make payments and purchases with your bitcoin and, just like your email password, must be kept secret.

If a person gets the private key of your bitcoin wallet, he or she can clear your account. The only way to get your bitcoins back once the transaction has been made is if the person with your private key decides to return them voluntarily.

In South Africa, the following types of wallets can be downloaded:

• Desk wallets: These portfolios include Armory, Wallet Atomic and Bitcoin Core Wallet and require you to install them on your desktop. In the end, you are responsible for protecting your resources and making backups. The desktop must be protected and protected by antivirus software.
• Mobile wallets: This type of wallet allows you to carry your bitcoins in your pocket and includes Bitcoin Wallet, Conoimi Wallet and Green Address. If merchants accept bitcoins, you can pay in brick and mortar stores by scanning a QR code or using an NFC touch to pay for the option.
• Web based portfolios: You can access these portfolios from anywhere with an Internet connection and include BitGo and Blockchain.info. You must be particularly careful not to lose your password with this type of wallet. Wallets do not keep your private keys, so even if they are violated, your bitcoins remain safe.

Step 3: Get paid in Bitcoin

Once you have started working in bitcoins, you can accept them as payment on your website or business. For online purchases, you can use a payment system like BitPay, which facilitates payment for buyers with bitcoins.

In addition, you can download the blockchain.info merchant application, an app that keeps your wallet on your Android phone or tablet. This app allows you to accept payments in any amount of bitcoin ZAR using the latest exchange rate. Payfast.co.za, another South African gateway provider, offers users the ability to pay in bitcoins by converting it to ZAR.

Final thoughts

The purchase of bitcoins in South Africa can be as simple as using a credit or debit card at an ATM, thanks to the BTM in Johannesburg. By following the steps described above, you can start trading with bitcoins in a few hours once approved by an exchange broker or bitcoin like XTB.

The two local exchanges of South African cryptocurrencies, Luno and iceCUBED, could serve most, if not all, the demands of bitcoin and cryptocurrency. You can also easily exchange bitcoins with credit cards, the Johannesburg BTM or a cryptocurrency broker.