The enthusiasm behind cryptocurrencies has subsided in recent months. While it is down from its eye-watering high early this year, the grandfather of crypto Bitcoin is still up 300 per cent compared to the same time last year. So, if you want to invest in cryptocurrencies, Swyftx offers all you need to know regarding purchasing Bitcoin in New Zealand.
Bitcoin has generated a lot of buzz in New Zealand over the last couple of years. Each Bitcoin would have fetched about $600 at the beginning of 2016. However, the cryptocurrency reached a high of almost $88,000 per coin in April this year. That’s a vast amount of money for what are, after all, simple lines of code in computer memory.
So, this post will make you understand; how you can get Bitcoin in New Zealand, what you can buy with Bitcoin in New Zealand, and where you can spend your Bitcoin in New Zealand. But before diving into the nitty-gritty, let’s know what Bitcoin is, Shall we?
What is Bitcoin?
In 2008, a Japanese individual named Satoshi Nakamoto published an academic essay titled Bitcoin: A Peer-to-Peer Electronic Cash System, which detailed Bitcoin technology for the first time. The moniker, however, is thought to be a pseudonym, and the real identity of the developer or team behind Bitcoin remains unknown.
Bitcoin is a digital cryptocurrency that is decentralised and based on blockchain technology. Blockchain is essentially a secure digital ledger technology that stores data across several computers. Because each item, or block, contains a coded timestamp, records cannot be altered or tampered with. In other words, everyone has access to the records in a free peer-to-peer network.
Bitcoin emerged as an example of blockchain technology in action—being developed to demonstrate how safe and straightforward electronic transactions can be outside of established global financial organisations.
Each Bitcoin or part of a Bitcoin is merely a digital code stored on a central blockchain record—you own the Bitcoin if you have the key to it. And when you trade your Bitcoin, the keycode is transferred to another person, exactly like traditional cash.
Bitcoins are awarded to those that acquire the Bitcoin program and use their computers to record, process, and verify transactions, also referred to as mining.
Bitcoin Trades can be conducted immediately and at a lesser cost than traditional ways since each Bitcoin transaction is initiated online through the peer-to-peer network. Furthermore, international money exchanges are subject to rather hefty fees and currency conversion rates to cover the different banks’ costs.
However, contrary to the traditional currencies, which central banks govern, Bitcoin is unregulated. As a result, buying and trading Bitcoin online has significant risks. And this explains why speculation abounds, and its value might change dramatically.
Bitcoin began the year at roughly $10,000 per coin, peaked at close to $89,000 in April, and is presently worth around $47,000. It’s a wild roller-coaster journey that might quickly have earned or lost you a great deal of money.
How Do I Buy Bitcoin in New Zealand?
Before deciding to invest in Bitcoin, keep in mind that you don’t have to buy the entire thing. Bitcoins are divided by up to eight decimal points, which means you can buy a fraction of a Bitcoin.
Specific large financial organisations also provide cryptocurrency index trading, which allows you to invest in an index that includes various cryptocurrencies, like Bitcoin. However, if you only want to invest in Bitcoin, there are a few methods to do it in New Zealand.
The following are a few of the most important ways you can buy Bitcoin in New Zealand:
1. From Bitcoin Exchange
On the internet, there are hundreds of Bitcoin exchangers global multinational. However, because Bitcoin exchanges and trading aren’t regulated, you must spend New Zealand dollars to buy Bitcoin.
For instance, there are several large exchanges over Australia and the United States, but you must have a bank account in those countries to utilise them. However, several Kiwi operators and a few significant companies have sites here that take New Zealand dollars.
There are two advantages to purchasing Bitcoin using New Zealand dollars—first, you’ll know how much money you are spending. Secondly, you’ll not be charged excessive foreign currency exchange or credit card processing costs.
Take Note of Credit Card Fees
You can use credit cards to acquire Bitcoin on various exchanges. Fees levied by exchanges are often modest, beginning as low as .005 per cent. However, you should expect to be slapped with additional fees. Typically, the larger the deal, the greater their take.
Moreover, anticipate an exchange to charge additional credit card transaction costs on top—around 2.5 per cent to 3 per cent. In addition, your credit card company will take a portion in the form of a foreign currency charge. Overall, transaction costs might easily reach 10 per cent or higher.
Nevertheless, if you still want to buy Bitcoin using your credit card, these three major Australian operators allow Visa and Mastercard—Coinloft, Buy a Bitcoin, Bitcoin Australia. Even better, you can still use the top-rank exchanges globally for Bitcoin trades—Binance, Bitfinex, Bitstamp, Coinbase Pro, Huobi Global, KuCoin.
2. From Goods and Services
Any company or individual can take Bitcoins as payments if they have a Bitcoin digital wallet to deposit the money. That said, you can download a Bitcoin wallet from the Apple or Google Play stores. However, you must choose how you want to receive your money, which includes the following options:
- QR codes that can be produced with a Bitcoin digital wallet program and scanned with a smartphone
- Online payment systems that can convert digital cash, such as Bitcoin, into traditional currency, such as New Zealand dollars
- Custom point-of-sale terminals for your shop that interface with your current sales register
3. Mine Your Bitcoins
As aforementioned, mining Bitcoin is the act of receiving payment for utilising your computer and electricity to timestamp, process, and validate Bitcoin exchanges.
Throughout the early stages of Bitcoin, you could download the Bitcoin program, connect your PC, and begin mining. Nevertheless, as the amount of Currency transactions has grown, so has the intricacy of the mathematical computations used to power the system.
Mining nowadays necessitates a significant investment in computer processing and power. As a result, mining is only available to large corporations that regard it as important stuff.
What You Can Buy With Bitcoin in NZ
When you wish to invest in Bitcoin, you’ll need a safe place to keep your funds. Because Bitcoin is unregulated, storing it at an exchange is not a brilliant idea. And that’s why there’ve been several documented examples of individuals losing money as a result of cybercrime and hacking. When the Cryptopia exchange in New Zealand was hacked, approximately $23 million in investor funds were stolen.
As a result, it is recommended that you keep your Bitcoin in a digital wallet. The google play store for phones has a few alternatives, as do wallets for desktop and laptop computers. They often include scannable QR codes, which save time when inputting long Bitcoin addresses with every transaction.
You can add an extra degree of security by purchasing a hardware wallet. The hardware wallets are storage devices, similar to a USB stick that you may disconnect from the internet and put somewhere secure. They can’t be hacked, and your precious Bitcoin stole because they’re offline.
Where to Spend Your Bitcoin in New Zealand?
Several online merchants accept Bitcoin, but not so much in Aotearoa. EasyCrypto, a cryptocurrency exchange, provides a list of companies that accept Bitcoin payments, while Coinmap has an interactive map featuring a few Bitcoin-friendly New Zealand businesses.
But, honestly, why would you want to use your Bitcoin? After all, Bitcoin is primarily about investment and speculation, not purchasing goods.
In the initial periods of Bitcoin in the United States, a miner spent 10,000 Bitcoin buying two pizzas. At current Bitcoin values, that equates to more than 698.86000 NZD dollars.
In reality, Bitcoin and other cryptocurrencies are increasingly considered securities. Just like stocks and shares, they’re purchased, kept, and sold as investments rather than being used to buy a cup of coffee or pay for gas.
That leads us nicely to our Financial Markets Authority’s position on cryptocurrencies and Bitcoin. Even though the FMA does not control cryptocurrency exchanges, it does provide some sound recommendations, so make sure that any New Zealand exchange you utilise is:
- Listed on the FSPR
- A participant in a dispute resolution mechanism
- Your New Zealand money is kept in a reserve account.
Finally, buying Bitcoin is just like any other investment—so it pays to do your research. Bitcoin will never be an uncertain investment because of its high volatility and penchant for hype and market booms. But, at the very least, if you walk in with your eyes wide open, you’ll have the upper hand on this crypto exchange in New Zealand.
For the time being, all the combinations are purely theoretical. It is doubtful, but possible, to compromise the Bitcoin infrastructure. Whenever you read or hear about Bitcoin assaults in the press, it is because exchanges or e-wallet services, which function as custodians of the coins or keys, have been hacked. If an exchange keeps the private key online and that server is compromised, the hacker will have the private key and use the Bitcoin just as the system intended.