BITCOIN BASICS

What is Bitcoin?

It's the dawn of the new age. Nah, that's a little too much. But it is a pretty cool new invention. For those who have never heard of bitcoin, imagine: digital coins (abbr. BTC) that one can hold and use as money. Yet, it's never quite right to just pin it down to one thing. Instead of searching for a definition that is clear but inaccurate, let's delve into the specific uses of bitcoin.

1. Virtual currency

Like a currency, you can buy and sell things with bitcoin, without fiat money. That means sellers provide goods and service in return for bitcoin. While it's not universal, seller's adoption rate for bitcoin has been increasing; more and more merchants, including Dell, Amazon, OKCupid are accept bitcoin as a mode of payment. As of now, you can get gift cards, air tickets and even pay for your college education using only bitcoins. Furthermore, shopping with bitcoins can help you save money if you pick are savvy enough to find the right deals.

2. Medium of Transfer

Remittances, payments, and other similar financial services can be made faster when bitcoin work with banks. In this case, the volatility of the price of bitcoin does not matter because you are holding on to bitcoins for only a couple of minutes. Here's a simple illustration of the movement of money conventionally: Faq flow of money Source: World Economic Forum

With bitcoin, it's possible simplify the process. You can buy bitcoins in country A, and cash out on bitcoins in country B's local currency and deposit that money into your bank account there. Despite the different charges and exchange rates, transferring small amounts will most likely be cheaper and faster with bitcoin. Interestingly, banks and other organisations see the benefits of the bitcoin network and are developing bitcoin-inspired systems for their own use.

3. Store of value

Like Gold, bitcoin can be thought to have intrinsic value, without being actually useful. It's high volitility and the fact that it can be exchanged for fiat money, makes it a good trading asset. However, like any other trading, be it in gold, forex or bitcoin, one needs to do thorough research, and understand the pros and cons before venturing into it.

It's hard to get your head around the word "bitcoin" in one sitting. The true value of this network lies in the immutable distributed ledger system that has the potential to disrupt any industry that involves trust. People are often bombarded with negative narratives of the currency on mainstream media, yet Bitcoin's use as digital cash is only the tip of the iceberg. With top talents and academia behind this open source technology, it'll be exciting to see how it unfolds.

How does it work?

If you want to go into the technicalities of it, read the paper here

If you're not too familiar with cryptography, this will help.

Simply put, instead of having your bank balance on your POSB application or your passbook, your bank balance is placed on a public ledger. For example, when you send money to John, everyone knows, accepts, and sees that the number of BTC in John's account went up and your number of BTC goes down. Everything happens within 10 minutes. There's no dispute about how much you have or how much John has. The entire network provides instant, fast transfer of value.

Why 10 minutes?

Each transaction that happens goes on a "to-be-confirmed" list. Miners (people with supercomputers) run a software that will then organise these transactions into a block and publish that block after they solve a math problem. This problem relies on the computer to take exactly 10 minutes to solve. For their work, the miners receive a bunch of bitcoins.

However, some merchants do allow for instant confirmation if you are transacting in small amounts.

Wait, everyone can see how much bitcoin I have?

Everyone can see how much bitcoin an address has, but only you know which address belongs to you. You can, however, share your address with others. It's useful to think of a bitcoin address like an email address or a bank account number.

Is Bitcoin really anonymous?

Not really. At CoinHako, like many other bitcoin companies, we value the need for Know Your Customer (KYC) regulations. Hence, we require customers verify their identities before they buy bitcoins. This helps us flag out suspicious activities and help law enforcers track down criminals. If anything, using bitcoin makes it easier to trace malevolent actors as all transactions are on a online ledger for all to see. Click here if you want to find out more.

USING COINHAKO

How do you set the price of a bitcoin?

The price of a bitcoin is set by different bitcoin exchanges and based on the market forces of supply and demand. We follow the prices set by exchanges.

What is 2-factor authorisation (2FA)?

2FA refers to the technology that adds a layer of verfication before you can log into your online wallet. When you activate 2FA, you need to go through 2 login processes instead of just 1:

  1. The usual login process, where you enter your password and username
  2. Logging in using your token-generated OTP (one-time password)

Why do I need 2FA?

This way, hackers will need physical access to your token to compromise your account. Hence, setting up 2FA will greatly increase the security of your wallet. We also recommend that you change your password every six months but we know you won't do that. So please, at least activate your 2FA.

For a fuller understanding of 2FA, click here

How to buy bitcoins?

  1. Sign up for an account
  2. Activate your account
  3. Deposit fiat money into your account via Xfers, local inter-bank transfer, or international wire transfer
  4. Click on the green "BUY BITCOIN" button
  5. Enter the amount you would like to buy in fiat money

For more, refer to this guide

If you still don't know how, drop us a question at the chat box below.

How to sell bitcoins?

  1. Click on the red "SELL BITCOIN" button
  2. Enter the amount you would like to sell in bitcoins
  3. Your money will be deposited back into you CoinHako wallet in fiat money

For more, refer to this guide

If you still don't know how, well too bad. Nah, we kid, just drop us a question at the chat box below!

What are the fees?

We only charge 0.9% for each transaction that converts bitcoins into fiat money, and vice versa. There are no fees to set up a wallet or receive bitcoins. Sending bitcoins will incur a miner's fee that typically ranges from a fraction of a cent to a few cents.

How long will each transaction take?

  • Depositing money into the wallet will vary according to the method you use. Xfers will be the fastest option. Snail mailing cash to us is not an option (just in case, you were wondering).
  • Withdrawing money from the wallet will take up to 3 business days.
  • Buying and selling bitcoins will be instant.
  • Receiving bitcoins will take around 30 minutes (or the time taken for 3 confirmations).
  • Sending bitcoins will be instant.

I deposited money via Xfers and it's not showing up.

Depositing sums above 100 SGD via Xfers would require a level one verification. Hence, Xfers will take some time to process the deposit. On that note, depositing even larger sums will require more verification and time. If you run into this problem, please log into your Xfers account and check if they require additional verification.

Is there a minimum sum to buy or sell bitcoins?

We'd require a minimum sum of 1 SGD per buy/sell transaction. 

Is there a maximum sum to buy or sell bitcoins?

No, however if you wish to trade more than 200 SGD worth of bitcoins, you will need to verify your account with us.

How do I verify an account?

Please send in these 2 things:

  1. Full colour, high resolution of the front and back of your ID* (e.g. passport, employment pass, IC)
  2. Proof of address (e.g. a scan of your telephone or utilities bill)
  3. *We accept passports and official IDs only

Can I buy bitcoins in currencies other than SGD?

Not yet. As of Dec 2015, we only allow for users to buy bitcoins in Singapore with our local currency (SGD) but we are looking to expand to other Asian countries. Watch out everyone, CoinHako coming through.

How to send bitcoins?

  1. Click on the grey "SEND" button
  2. Select one of three methods - bitcoin address, email or SMS

For more, refer to this guide

How to receive bitcoins?

  1. Click on the grey "RECEIVE" button to see your bitcoin address
  2. Send your bitcoin address to your sender

For more, refer to this guide

If I have 2 addresses, can I receive bitcoins in both addresses?

Yes. The bitcoins sent to both (or more) of your CoinHako-generated addresses will be stored into one main account which is connected to your CoinHako wallet.

I sent some bitcoins to the wrong address, can I reverse the transaction?

No, bitcoin transactions are irreversible. The only way to retrieve is to ask the wrong receiver to send the bitcoins back.

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