TLDR; Still pretty hard and weird
NOTE: This article assumes you have a BitCoin Wallet and are familiar with the basic concepts of BitCoin (Wallets, addresses etc…). If you’re going to use this as a “how to” you need to make sure you at least have a wallet (I use Electrum).
So, I’ve decided to buy some BitCoin in the hope that I can buy it, hold it and eventually sell it for a profit. I mean, if BitCoin is just another commodity/currency, this should be fairly straight forward to do, right? 😀
After some online research and going through a bunch of dodgy looking websites (they might be legit) and forums, namely:
I ended up on https://localbitcoins.com/ (as well as a getting tip that the Dogs Bollix in Auckland had a BitCoin ATM from a co-worker).
I signed up to Localbitcoins above, which is a site that basically acts like TradeMe, putting together buyers and sellers, and I was ready to go!
I was quite relieved that the signup process worked as all the sites I had previously tried to sign up to (e.g. igot.com) simply didn’t work (usually failed at the authentication step).
Browsing through the “selling” listings I found one trader that had over a thousand trades and a 100% positive rating, so I clicked on the “Buy” button. The website then prompted me with a message that it would only let me trade if I “identified” my account 😦
So, I clicked on the “Identify” link and it turns out I had to upload a picture (front and back) of my drivers license. I also tried to verify my mobile phone number while I was there, but the SMS message never came through, though this wasn’t a pre-requisite to be able to buy on the site.
Now that I was able to click the “Buy” button, it prompted me to enter an amount (either in NZD or in BTC). The rate was pretty high, it was about $200 a BTC higher than the rate reported by Google at the time, which was around $1,800NZD per BTC.
The seller had a bunch of payment methods available, including bank transfer to all the major NZ banks. They also had a bunch of conditions listed, most of which seemed to be to do with verifying identity and that the buyer was from NZ. Namely, was:
- Picture of yourself with your NZ drivers license
- Picture of yourself with your NZ passport
- Picture of yourself with your NZ bank card
Once you’ve requested a sale and they’ve accepted, the clock for each transaction starts ticking (seller sets it, in this case was set to 90 minutes).
I left a message for the seller giving my mobile number and sending my BitCoin receiving address. The seller contacted me fairly quickly and asked for a picture of a drivers license and bank card both being held by me. I was at work at the time, so I had to wait until lunchtime to go out and snap a selfie with myself and my drivers license and eftpos card.
I attached those and explained that I was at work and couldn’t get my passport and asked whether I could send it later tonight. The seller said it’s actually fine, to not worry about passport and asked for a photo of a business card with a name on it. I don’t have business cards, so instead I sent a link to my work’s website with a picture of me on it and pointed out it’s got an address in Auckland and gave him my work email as well.
They seemed to accept this, but then we hit a snag as the 90minutes was up. However, the “transaction” browser window was still left open, along with the chat between buyer and seller. After this last bit of verification, I was finally given an ASB bank account number to deposit the funds into, with the instructions to “not mention anything about BitCoin, put ‘electronics’ in the reference instead”. This was a timely reminder that BitCoin is still full of unknowns about whether it will be treated as “just another currency” or some kind of “illegal black market dollars” by the law and society.
I transferred the funds, they messaged me to say that they’ve received the money and that they’ve transferred the BitCoins. After this, I got a bit nervous as it was “waiting” time. Time to see whether the BTC would actually come through. It did, after about 15 minutes, which matched up with what the seller had said about how long transactions take to come through.
So, there we go. I said goodbye, wished them a good day and left some good feedback on the site.
Lessons learned from my first BitCoin trade:
- Have all of your documentation ready, namely:
- Your BitCoin receiving address
- Photo of your drivers license (and one with you holding it)
- Photo of your passport (and one with your holding it)
- Some way to prove your live/work in New Zealand
- If you’re worried about identity theft, use the “cash buy” technique
It’s definitely not as simple to use as something like TradeMe. The main points of pain being taking photos of myself with drivers license, bank cards etc… and sending them to complete strangers on the internet.
Despite it’s improving reputation, this all definitely reminded me that BitCoin is still very much a “black market” currency and made me worry that I would end up on some police blacklist, just for holding BitCoins.
Will I get rich? Did I just piss away “actual” money for some worthless electrons? Will I become a victim of identity theft? Only time will tell, but this was an interesting exercise.
NOTE2: If you need to get something other than BitCoin (e.g. Ethereum, Litecoin, BitCoin Cash, ZCash etc…) what I’ve done before is to go NZD to BTC first and then use Shapeshift to covert from BTC to whatever you’re after.