18 May, 2017

How to accept Bitcoin in your business

One only needs to visit coinmap.org to see how fast Bitcoin – the digital currency worth R12,750 today (at the time of writing) – has grown since it began in 2009.

To become a part of this exponential growth and to save costs by cutting out the middlemen like Visa, Mastercard and the banks, here’s how you can get started using Bitcoin and how to convert it back to Rands. In years to come, there will be no need to convert it back to Rands and Bitcoin will become a currency unto its own.

To get started accepting Bitcoin in your business, you will need to the following:

  1. A bitcoin wallet – a bitcoin wallet is like a bank, in fact, you are your own bank.

    In the case of a business, it is suggested that two people have access to the wallet, in case something happens to one person, the other person needs access to the wallet to convert the currency back to Rands.
  2. Until Bitcoin becomes a currency we can use to transact with in South Africa, we will need to exchange it back into South African Rands.
    • Luno.com is a South African based company who can convert Bitcoin back to Rands for a fraction of the cost it would take to transact with major credit card companies.
    • LocalBitcoins.com is another online service where Bitcoin can be exchanged for Rands. Do your homework before transacting with people online.
    • Exchange with someone in person who owns Bitcoin – again, be cautious of who you transact with.
  3. Bitcoin is still a volatile currency but its value has only ever increased over time. The solution to avoid this volatility is to convert the Bitcoins to Rands at the point of transaction. Here, Luno has partnered with Payfast.co.za to do just that. The long term goal, however, is not to convert it back to Rands but to keep it as Bitcoin and pay for goods and services with Bitcoin.

Setting up a Luno.com account.

  • Go to Luno.com and open a bitcoin wallet with them.
  • Complete all the necessary documentation to complete the account set up.
  • Once complete, you should be ready to
    1. Start accepting Bitcoin.
    2. Buy Bitcoin with your regular bank account like Capitec, First National Bank, Standard Bank etc
  • You will now be able to create as many wallet addresses as you like to be able to have someone pay into your account.

All you need is the address. There is no need for Bank name, account number, branch code, account type. Just a single encrypted payment string like this, “12jdbAEqLcZQ8pYVgUaU3C1hfV4g2sqm6u” or the QR code for that string, like this.

Leaderless Bitcoin QR Code

Once people start paying you into your account, you can convert it back into Rands using the services above. (Note: Bitcoin is still a volatile currency so the amount you get out may differ significantly)