Bitcoin is a digital currency that is independent of the central bank in which the verification and maintenance of records of transactions are handled by a decentralized, cryptographic system instead of a centralized authority.
Learn the basics of investing in Bitcoin from New Zealand. Bitcoin 101
Find out the basics of how bitcoin works : How Does Bitcoin Work
Find out some of the main risk and rewards of bitcoin investment in New Zealand. Risk and Rewards of Bitcoin Investment
Find out how to buy bitcoin from New Zealand with step by step process. Buy Bitcoin From New Zealand
Find out the laws of investing in bitcoins in New Zealand. New Zealand Bitcoin Laws
Find out how to store your bitcoin securely in New Zealand. Bitcoin Storage In New Zealand
Find out what the future hold for bitcoin in New Zealand and around the world. Bitcoin Future in New Zealand
Bitcoin Investing 101
How does bitcoin work?
What are the risks and rewards of bitcoin?
Where & how to buy bitcoin in New Zealand?
Step by step process to buy bitcoin in New Zealand?
Step by step process of buying bitcoin
Laws of investing in bitcoin in New Zealand
Storage of bitcoins
Future of bitcoin
How does bitcoin work?
Unlike the traditional currencies, bitcoin operates without the control of central authorities, it instead relies on peer-to-peer software and cryptography. Each bitcoin transaction is recorded in a public ledger held on servers throughout the world.
Bitcoin nodes are computers that run the bitcoin core continuously. It is a software program that downloads and stores the entire blockchain and also records and verifies every new transaction that occurs on the blockchain.
The bitcoin network broadcasts every transaction to the network, then shares it from node to node. All of these transactions are collected into blocks every ten minutes by miners and added to the blockchain. This is the official record of bitcoin transactions. In the same way, you keep your physical coins in a wallet, the virtual currencies are stored in digital wallets and can be retrieved by a range of tools.
There are seven decimal places within which a bitcoin can be divided: a thousandth of a bitcoin is called a milli, and a hundred millionth of a bitcoin is called a satoshi. In reality, the bitcoin or the wallet doesn’t exist it is simply an agreement among the network about ownership of a coin. A private key is used to prove ownership of funds to the network whenever a transaction is being made. A person can simply memorize his private key and does not need to do anything to get access to his virtual cash.
Risks and rewards of bitcoin
Bitcoin is just like any other form of high-risk investment like some volatile stocks. This simply means whether you should invest in the bitcoin or not should be based upon your risk tolerance. Everything comes with both advantages and disadvantages, risks and rewards in a similar way bitcoin also has plenty of these two so let’s discuss it in detail.
Volatile – Bitcoin is still relatively very new to the market and its practical application is still not viable because of the volatility of its value, it is not very uncommon for the price of bitcoin to see a great dip and surge within a day or sometimes even minutes, this makes investing in bitcoin very dangerous, on top of everything bitcoin is not an operational currency and its fundamentals are still coming out.
Bitcoin is not the money – when it comes to regular currency, it is supported and backed by the central bank, but if we talk about bitcoin since it is decentralized, its value is not backed by any bank or any government entity, its value is basically “made up” so if the market decides that it is not valuable then it is just no longer valuable, this makes it a high-risk investment.
Bitcoin is not fool-proof – If the conventional financial system ever fails the government can respond by holding tangible assets like gold as a substitute, however, if there is a collapse in technology, power grid or even the entire internet goes down, there is no way to recover your bitcoin.
It can make you rich – People who invested in bitcoin in the early days have gotten super-rich, the times of return it gave to its investors are unheard of, so if a smart investor knows when to invest and when to withdraw, then bitcoin has the potential to make the investor super-rich.
No transactions fee – With the traditional banking system, each time we make a payment we pay a transaction fee when we pay via card but with bitcoin, you are not required to pay any banking fee because there is no bank involved
Low transaction fee on international payments – Since bitcoin does not have any centralized bank or any such institution, international transactions through bitcoin have very low fees as compared to traditional banks.
Inflation proof – A very big problem with traditional money is that due to inflation its value decreases. Since bitcoin is decentralized you never need to worry about your bitcoin losing value due to inflation because bitcoin is only restricted by the number of bitcoins in existence.
Where and how to buy bitcoin in New Zealand
Cryptocurrencies continue to become the currency of the mainstream. So assuming you’re thinking of purchasing bitcoin in New Zealand, we’ll walk you through a simple step-by-step process so that you can kick-start your crypto venture.
To the people who know nothing about crypto, blockchain, and how this technology came about, buying the bitcoin or any other cryptocurrency can be a little overwhelming, understanding its principles and how it works can take some effort to understand for a total beginner thus to help you out we are going to give to you the exact steps you need to take to buy bitcoin or any other cryptocurrency
Step by step process of buying bitcoin in New Zealand
Make sure the platform has a good reputation : Before making any investments you need to make sure the platform is legit and has a good number of users, the more the number of users a platform has the more it has depth & liquidity, making it easier to trade bitcoin.
Beware of the upfront fees : You should be aware of the transaction fees that are charged by the payment processing companies, for example, free is always the best, one percent is reasonable, two percent is high and anything more is unfair. All the companies make their money from transaction fees when users sell or purchase cryptocurrencies, some companies charge 0.1%, and some charge 0.5%.
For storing cryptocurrency, create a Bitcoin wallet : The first thing you need to do is to create a virtual wallet, there are various wallets you can install and run for free. The wallets are also available for ios, Android, and Microsoft platforms
Sign up with a broker or a stock exchange : Your New Zealand dollars can be exchanged for bitcoin at an exchange or the broker, but you need to open an account first and verify your identity, there are several exchanges for buying cryptocurrency however easy crypto is a New Zealand based broker and it is a very user-friendly option for New Zealanders to purchase bitcoin. Create an account with the “easy crypto” website and sign in to it. Fill in the information needed then you would be required to verify your identity, you can either use your driver’s license or passport, manual verification may also be needed. All the exchanges are required to verify the identification to prevent any money laundering or terrorist financing activities.
Purchasing bitcoin after signing up : Now you can buy the bitcoin and transfer it to your wallet. You can enter the amount that you want to buy bitcoin for, the minimum amount to purchase bitcoin is NZD 100 in New Zealand. Click the buy now button and you need to put the same address here that you put in your wallet. And your purchase of the bitcoin will be completed and you will be sent a confirmation email once you have made the payment and your bitcoin will be sent to your wallet.
Laws of investing in bitcoin in New Zealand
The (IRD) better known as the international revenue agency does not consider cryptocurrency as a legal tender for tax purposes, It is this way because the government cannot figure out who owns what due to how it is stored. However, you can own bitcoin in the same way you own shares in a company. Governments around the world are still trying to bring regulation in this field and it is under development. However, if you offer cryptocurrency as a financial service, Laws such as anti-money laundering laws will apply to you. These activities you should not get involved in are;
You cannot offer to transfer NZ dollars for cryptocurrency;
You cannot provide crypto storage service on behalf of others;
You cannot arrange crypto-asset transactions; and
Storage of bitcoins
If you have invested in bitcoin, you should make sure that you are ensuring its safety and for that, you need a secure way of storing your bitcoin, since bitcoin is not regulated, it is not a good idea to store your assets at an exchange a lot of people have lost their bitcoin to cyberattacks and hacking.
The best defense is using the cold wallet, unlike the hot wallet the cold wallet is not connected to the internet thus they are not vulnerable to cyber attacks, another thing that you need to make sure of is having a secure internet connection, you must never click on any links from an unknown person or you may lose it all, this kind of attack is known as phishing, one last thing you can do is change your password regularly.
Future of bitcoin
Over a decade ago, when bitcoin first appeared in the financial world, people expected this to be the start of a revolution. But that revolution has hardly materialized. bitcoin’s turbulent first decade has been marked by scandals, missteps, and wild price swings. Despite its struggles, however, investors and cryptocurrency enthusiasts remain optimistic about bitcoin’s future. As a result, bitcoin’s and crypto’s more generally future could be pivotal over the coming decades.
There is a good chance that the ecosystem will expand as regulation continues to evolve to keep pace. Schwartz predicts that the next decade will bring a massive explosion of low-cost, high-speed payments that will transform the value exchange process the way the Internet did. So we can reach the conclusion that bitcoin seems to have a promising future