An introduction to Bitcoin
It might seem daunting to find out how to buy bitcoin in South Africa, with all the talk of bitcoin being a completely different type of currency. But it’s really not all that complicated. Simply put, bitcoin is just a system of digital only currency, as opposed to the Rand, which is a ‘fiat currency’ – meaning it’s effectively a promise from the government to agree on its value.
Bitcoin was designed to be a secure and transparent cryptocurrency that operates independently from any financial institution or. Instead, Bitcoin is a worldwide system of virtual currency controlled by complex algorithms where Bitcoin miners keep the network secure and process all transactions by adding sets of transactions into a permanent, unalterable, and completely public ledger. This is done by chaining blocks of transactions together in what’s called the blockchain. It’s beyond the scope of this guide to how to buy bitcoin in South Africa to go too deep into bitcoin mining, but see our crypto-mining South Africa guide for more.
All you really need to know is that Bitcoin (the network) and bitcoins (the currency itself) are a safe and secure currency where there’s plenty of opportunities to be found in bitcoin trading South Africa!
Bitcoin trading explained
When it comes to dealing with Bitcoin, you can think of it in two ways. You can simply be interested in how to buy bitcoin in South Africa, either to use online as payment or as an investment in its value or you can get involved in Bitcoin trading South Africa. When you buy and sell bitcoin, it’s just like exchanging your SA Rand to any other currency, but trading bitcoin is the equivalent of any other currency trading or share trading. You can use plenty of simple bitcoin exchanges to buy bitcoin, but you really need a bitcoin trading platform South Africa to carry out trades.
Bitcoin trading South Africa involves trading bitcoins with other buyers and sellers in CFD trading – contract for difference. This involves you setting prices of trades are set in an attempt to get a buy/sell position that’s most favourable to you getting a profit from your trades as the value of bitcoin either rises or falls is known as. Additionally, you can deal in leveraged trading, opening positions way larger than your capital, but that’s really next level bitcoin trading South Africa and should be something you don’t even consider before you really know what you’re doing!
Bitcoin trading in South Africa
Cryptocurrencies, such as bitcoin are not, at the time of writing, overseen or regulated by the South African Reserve Bank (SARB) and bitcoin is not recognised as legal tender. However, cryptocurrencies including bitcoin are not illegal in South Africa.
What this means is that you can certainly use a bitcoin trading platform South Africa, but you do so at your own risk, as the SARB is not involved in its regulation and you won’t be supported by any financial rules. With no official regulatory body in South Africa, it’s necessary to be cautious with who you trade with – which is another reason why our recommendation for the best bitcoin trading app South Africa is well worth looking at!
But things look as though they will be changing very soon, with South Africa’s top financial regulators, including the SARB, releasing a 2020 policy paper with 30 recommendations on crypto regulation. These recommendations include making crypto service providers conduct customer identification and verification, customer due diligence, record keeping, and monitoring for suspicious and unusual activity.
Getting a secure & fair experience with bitcoin trading
The most important consideration when it comes to both the best way to buy bitcoin in South Africa and bitcoin trading South Africa is all about protecting your bitcoins. Or more accurately, you need to protect the private keys for your bitcoins. These private keys are the unique codes that allow you to access and utilise your bitcoin, so protecting them is vital. You store your private keys is a digital wallet and there are plenty of crypto-wallets South Africa to choose from. However, when thinking about wallets, it’s always more secure to store keys on a hardware wallet, a device that must be plugged into a computer or device to access the keys than it is to use software wallets.
With the regulations around bitcoin trading South Africa being in their earliest stages, it’s vital that you ensure that you’re getting a secure and fair experience when using an exchange or bitcoin trading platform South Africa. As you’ll see from our recommendations below, one way to ensure regulation and security is to go beyond the country and choose an international operation that complies with the crypto regulations of other countries. And of course, it’s essential that any bitcoin trading South Africa operation or international operation has a fully secure operation – look for full account and identity verification processes, 2-factor authentication on your account, and SSL secure webpages and complete DDos protection.
Editor’s recommendation – the best trading platform for Bitcoin in South Africa
For us, the best way to buy bitcoin in South Africa is through the Luno exchange. Luno is one of the oldest exchanges in South Africa and specialises in buying and selling bitcoin. It’s a simple and easy to use exchange, perfect for those concerned with how to buy bitcoin in South Africa, with low fees, good transaction speed, but it’s the easy to use layout and support for South Africa that makes it our choice.
But when it comes to the best bitcoin trading platform South Africa, we have to go with an international trading platform – eToro, which is one of the biggest and best trading platforms in the world. As we’ve said, due to the lack of regulation in South Africa, it’s actually of benefit to your bitcoin trading South Africa to go with eToro as they are regulated in various other territories, including the US and UK. eToro offers a first-class trading platform interface, plentiful opportunities to buy, sell, and trade, including leveraged trades with a high leverage of 400:1. We’re also big fans of the eToro social trading aspect, allowing you to see and copy the trades of successful investors.
This is how our experts test trading platforms
In deciding upon the best bitcoin trading platform South Africa, we take an in-depth look at the various exchanges and trading platforms and judge them on several important criteria. The most important of these criteria is security, as already discussed, and there’s no way we’d recommend a platform as the best trading platform or the best way to buy bitcoin in South Africa that didn’t prioritise security.
After security, the next most important criteria are fees, speed, and ease of use. Fees and charges for transactions should be as low as possible, be clearly laid out, and there shouldn’t be any hidden fees or charges applied. Speed of verification and transactions is important of course, as is ease of use of the platform or exchange. When you’re new to bitcoin and looking at how to buy bitcoin in South Africa it’s important to use somewhere that makes things easy for you with a simple, intuitive, and well-designed site.
And after those criteria, we also look at things such as customer service, payment methods, the number of cryptocurrencies offered, and the overall reputation of the exchange and trading platform.
How to buy bitcoin in South Africa for the first time on Luno
No matter whether you’re looking at big time bitcoin trading or simply want to know how to buy bitcoin in South Africa for the first time, it’s never bad to get as much knowledge as possible. With that in mind, here are 5 top tips to getting the most from your bitcoin dealing.
Tip #1: A simple how-to guide to buying bitcoin at Luno
This was our choice for the best, simplest way to buy and sell bitcoin in South Africa, perfect for novice buyers. And here’s just how you do it, from registration to getting your first bitcoins at Luno:
- Firstly, sign up by email address and set your password. You will need to confirm your email address.
- To fully verify your account, you will need to submit digital copies of your ID, proof of residence, and bank statement.
- Upon verification, your account will be set at one of three levels, depending on the deposit and withdrawal level you specify (level 1 limited to R 15,000 deposit and withdrawal, level 2 limited to R 50,000, level 3 has no deposit and withdrawal limit.
- Deposit money into your account using the Luno wallet available. But remember, the best security advice is to only use this wallet as a temporary wallet for deposits.
- Select ‘Deposits’ at the bottom of the wallet link, select preferred bank from the list and enter deposit details.
- A reference number will appear on the screen. You need this reference number as well as the Luno banking details to proceed with making a deposit. Use the Luno banking account and reference number (beneficiary reference) to do an electronic transfer from your regular bank account to your Luno bank account.
- The funds you transfer will appear in your Bitcoin wallet once they have been cleared. This usually takes 2 working days. Once the funds appear in your Bitcoin wallet, you can buy Bitcoin.
- Buy Bitcoin with ‘Instant Buy’: The ‘Instant Buy’ feature on Luno is the fastest and easiest way to buy Bitcoin in South Africa. However, there is a fee for this facility so it does cost you more. A cheaper option is to place a ‘Buy order’ through Luno.
- Select the ‘Buy/Sell’ button on the Luno screen. You are able to switch between Bitcoin (BTC) and Rand to transact. Use BTC to indicate the amount you want to buy; and ZAR to indicate the amount you want to spend.
- Select ‘Buy’ to complete the order.
- Place a ‘Buy Order’ on the exchange to buy Bitcoin
- Select ‘Exchange’ to go through to the ‘Buy Order’ feature.
- Select ‘Place Order’ to activate a ‘Buy Order’ request where your order to buy will be matched by a person’s order to sell.
And that’s it – you’ve just bought your first ever bitcoin! Congratulations and welcome to the exciting worlds of cryptocurrency and bitcoin!
How to buy bitcoin in South Africa? Simple, just follow our simple guide! And now you have, we trust the world of buying, selling, and bitcoin trading South Africa is a lot clearer to you. However, knowing that bitcoin trading and cryptocurrency dealings are complicated and high-risk, we’d like you to keep three most important things in mind for all future crypto dealings:
When you’re a newcomer and just want to know how to buy bitcoin in South Africa, it’s vital that you choose an exchange or trading platform that lays things out simply for you. And when you decide that you want to explore bitcoin trading South Africa, you really need to do extensive research and get as much knowledge as possible to understand the trading process.
Losing access to your private keys is something you don’t want to have happen – lose access and your bitcoins are lost. So secure them well with a good quality bitcoin wallet, preferably an offline hardware wallet.
And finally, you have to be very careful when moving into bitcoin trading. It is a hugely volatile market and you have to consider a good trading strategy and the total risk involved.