By Jamie McKane10 October 2017
According to MyBroadband’s 2017 Cryptocurrency Survey, many South Africans have not purchased cryptocurrency because they do not know which coins to buy, or how to buy them.
The biggest and most stable cryptocurrencies are Bitcoin (BTC) and Ethereum (ETH), and these are used as a store of value due to their relative stability.
If you are interested in buying Bitcoin and Ethereum, we have provided a simple guide below.
Buying Bitcoin
The easiest way to buy Bitcoin is with rand through a reliable local exchange, like Luno.com.
Register an account on the Luno website and verify your email address to get started. The next step is to transfer rand to your Luno account.
Select the “Deposit Money” option on the account dashboard and follow the on-screen steps – choosing your bank and the amount of money you want to deposit.
Luno will then provide you with its banking details for your deposit and a unique reference number.
Visit your online banking profile and transfer the amount you specified to the Luno account, including the Luno reference number.
The funds will appear in your Luno account after one to two business days.
When the rand deposit is received by Luno, it will reflect in your Luno account. You can then buy Bitcoin by selecting the “Buy” option from the Luno dashboard.
The purchased Bitcoin will be credited to your Luno Bitcoin wallet and the rand cost will be deducted from your Luno rand balance.
Buying Ethereum
The name of the cryptocurrency used on the Ethereum blockchain is Ether, but is often referred to as Ethereum.
To buy Ethereum, you must create an account on an exchange which supports it.
Popular exchanges include Poloniex, Kraken, and ShapeShift – which allow you to purchase Ethereum using your Bitcoin.
Once you have created your account on the cryptocurrency exchange, you need to transfer your Bitcoin from Luno to the exchange.
This can be done by selecting the “deposit” option from the exchange’s dashboard and choosing the Bitcoin (BTC) option. Make sure not to select a different coin for a deposit, like Bitcoin Cash (BCH).
Selecting deposit on Bitcoin will display an address. You will need to send your Bitcoin from your Luno account to this address.
Ensure that you copy and paste the correct exchange deposit address into Luno before sending your Bitcoin. Once you hit send, the Bitcoin may take several hours to send.
Once your Bitcoin is in your exchange account, select the BTC/ETH trading pair to buy Ethereum.
Choose the amount of Ethereum you wish to buy, and your price, and select “buy”. Your Ethereum is then stored in your exchange account.
Storing cryptocurrency
Many South Africans use Luno to store their Bitcoin, which means the company controls your wallet and your private key.
More advanced methods of holding your Bitcoin include storing it in an online wallet where you control your private key, or on a hardware wallet where you control the physical wallet and key.
Ethereum storage functions in a similar manner, and users can move it from their exchange account to an individual wallet.
MyEtherWallet is a popular choice to store Ethereum, as you retain control of your private key.
Bitcoin holders wanting to move their cryptocurrency can use a service like GreenAddress.
Once you have created an Ethereum or Bitcoin wallet, you must access its address – which you use to send your cryptocurrency to it.
The most secure way to store these currencies is to download and run a node on each respective blockchain, using your own hardware. This can be complex for newcomers, however.
We also recommend that new investors read up on cryptocurrencies and understand how they work before selecting a coin.
This article is not intended as investment advice. Always thoroughly research a cryptocurrency before purchasing it.