Trading In Bitcoin And Cryptocurrencies In Singapore
If you do not reside underneath boulders or in caves, you will have heard about cryptocurrencies. Bitcoin and pals have created quite a storm in the financial world and stirred up emotions in most of us — whether it’s joy at having made sizeable profits or regret at not buying earlier.
For the uninitiated, here’s a brief overview on what Bitcoin is, exactly.
Bitcoin – the world’s largest cryptocurrency – is a digital asset secured by a series of algorithmic encryptions, which are stored on the blockchain. Its value, as with any other cryptocurrency, comes from its manufactured scarcity.
Which means that there’ll be a finite number of bitcoins floating around the market. Currently methods of calculation indicate that there will only ever be 21 million bitcoins, if Bitcoin’s protocol isn’t changed.
Without further ado, let’s get straight into the meat and potatoes of the hottest investing topic on everyone’s minds: how to purchase Bitcoin.
It’s simple, really. Just follow these three simple steps:
- Find a Bitcoin exchange
- Trade your local currency into Bitcoin
- Store your coins in a secure wallet
And for my next act, I shall bring about world peace
See? Told you it was simple. Now sit back and read the other 1,000 words of this article, telling you what exactly half of those words meant.
Let’s start with wallets, which are perhaps the most important ingredient in the cryptocurrency pie, as they store and secure your digital currency.
After all, you can’t spend money if someone keeps nicking cash out of your wallet in the real world.
Unlike physical wallets, cryptocurrency wallets don’t actually contain anything in physical form.
All evidence of financial transactions involving cryptocurrencies are stored on the blockchain, which is basically a public ledger of every Bitcoin that currently exists.
Doesn’t look familiar to me
In order to trade in cryptocurrency, you’ll probably need a wallet — especially if you’re planning to invest long-term.
If you’re just a casual investor, you can jump straight to the exchanges portion of this guide below.
Wallets are software programmes used to store, send and receive digital currency.
This is done through both a public key and a private key.
- Public keys allow others to send you money. Feel free to distribute them like candy.
- Private keys are secure digital codes known only to you and your wallet. NOT CANDY. Keep them to yourself, as they allow access to all your cryptocurrency. Do not forget it after creating one.
Now, there are two methods of storing your cryptocurrencies, hot storage and cold storage.
Needless to say, we are not talking about the supermarket chain.
“We wouldn’t mind if you entrusted your bitcoin with us, though. Not one bit.”
Blowing hot and cold
Hot storage refers to methods where your cryptocurrency is kept in a device that is readily and directly connected to the internet.
These wallets often boast flexibility and user-friendly interfaces, making payment and accessing funds speedy and convenient.
However, as they are constantly connected to the internet, they are susceptible to being hacked. Therefore, you should only carry a small amount of cash in your hot storage wallet.
When you store currency with a method which is completely offline, that’s cold storage. Pretty intuitive, huh?
Think of them as savings accounts, which are best suited for long-term storage. If you don’t want or need to touch your coin stash for months or even years, put it on ice.
For the sake of brevity, we shall be discussing one wallet from each method: Desktop/Mobile wallets for hot storage and hardware wallets for cold storage.
Desktop wallets are software applications that can only be accessed from the PC or laptop that you installed the wallet on.
Mobile wallets are basically an app for your smartphone that does the same thing, and are especially convenient for establishments with support for cryptocurrency payments.
Hardware wallets are physical devices which are usually USB thumbdrives. They are far more secure than hot storage methods as hackers need physical access to your device to jack your stash.
Exchanges to trade Bitcoin
Now that you’ve got a wallet set up, you’ll need a site to buy coins from.
Out in the Wild West of the internet, there are no shortage of websites eager to take your money.
Many websites trade only in USD or Euros, but in order to save you from making that one extra step, we sifted through them to bring you The Big Four of Coin Exchanges that trade preferably in SGD.
In accordance with a notice put out by the Monetary Authority of Singapore (MAS), most sites will require you to verify your identity by uploading pictures of documentation as proof.
The big daddy, Coinbase is prime example of how much good a great user interface can bring to a company.
The largest coin exchange in the US offers multiple modes of payment, including bank transfers and credit cards.
- Simple UI that is easy to navigate for beginners
- Easy to signup
- Supports multiple modes of payment including credit card, bank transfers
- Mobile app allows for on-the-go trading
- Verification can take a long time
- Customer support takes a long time to respond
- Credit card fees for each transaction are very high: 3.99%
- 1.49% transaction fee on normal trades are a bit on the high side
- No other altcoins available on the site, although that might change in 2018
Very widely used in Singapore and Malaysia, Coinhako boasts zero deposit fees and a fixed withdraw fee of S$2.
- No deposit fees and low fixed withdraw fee
- Quick verification
- Good buy and sell limits
- Based in Singapore
- In-depth FAQ section
- Indefinite suspension of new user registration since 11 January 2018
- A few claims of slow customer service
- Trading feed of 0.9% which is not good for active traders
- Only available to Singaporean and Malaysian customers
- No altcoins available (Only Bitcoin and Ethereum)
If you prefer to go the over-the-counter route, consider LocalBitcoins. It helps to facilitate Bitcoin trading between two people, who can keep their identities secret.
However, this anonymity comes at a premium, with considerably higher exchange rates as compared to other coin exchange sites.
- No ID or personal information required for signup
- Fast trades via cash deposit
- No fees for buying or selling
- 1% fee for completing advertised trades
- Current outgoing transaction fee to non LocalBitcoin wallets: 0.00019577 BTC
- You can get scammed
- Meeting buyers/sellers in person can be dangerous
- Harder to buy large amounts of Bitcoins compared to other exchanges (you need to find a buyer willing to sell that amount of BTC)
- As the name suggests, the only cryptocurrency available on the site is Bitcoin
A unique experience, NuMoney is a startup that allows you to buy an assortment of altcoins at a physical location.
Located close to Buangkok MRT, this appointment-only store only accepts cash payments.
Current rates for BTC are S$14,774.35 as of 25 January.
- Skip the hassle of verifications
- Fast transfers and sales
- Directly purchase altcoins
- Trade large amounts of cash/crypto
- Staff can help you set up wallets, etc.
- Cash only. Might be risky to carry around large amounts of cash
- Location can be inconvenient to travel to
Never too late to jump in
After USA and Switzerland, the Little Red Dot is the third largest Initial Coin Offer (ICO) market globally, which just means Singapore is a thriving hotbed of activity for the cryptocurrency industry.
With the meteoric rise of Bitcoin in 2017, the world has awakened to the perpetually bullish market that is cryptocurrencies.
That is not to say that the time has passed to get into Bitcoin, or rather cryptocurrency as a whole.
With every passing day, the list of altcoins keeps steadily expanding.
As each one provides a different function, the world of alternative cryptocurrency is mysterious, vast and sometimes ridiculous.
An actual thing that was literally memed into existence
Not every altcoin is a winner, though. We at MSN urge prospective investors to exercise caution when trading in cryptocurrencies.
Featured image from Facebook.