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Resource  6, Feb 2014

BitCoin in Malaysia: Where are we now?

Can you buy Bitcoins in Ringgit? Are there any stores that accept Bitcoin? ECommerceMilo looks at the status of Bitcoin in Malaysia

BitCoin, or BTC in short has been getting spotlights of late, especially when one BTC unit soared to the price of one troy ounce of gold. What’s amazing was it took less than a year to appreciate 92.67 times. It started from a humbling USD$13.28 per unit on 1st January 2013 and rocketed to USD$1,230.68 by 4th December 2013 [Source]. At USD$1,230.68, it is almost the price one would pay for 1 troy ounce of pure gold today (28th Jan 2014).

To put it in a relative context, imagine yourself buying a Perodua Myvi car at RM45,000 today and it became a Mercedes E-Class at RM417,0150 within a year time.

I see both your retina starting to glow now.

Yes, it was that crazy. BTC closed year 2013 at slightly below USD$800. Your Myvi didn’t turned out to be a Mercedes E-Class after all, but you still land yourself with a full spec Brabus styled Mercedes C-Class at RM280,000. I am sure you and I would recognize it is a remarkable deal.

Because of the massive bull charge, Bitcoin is being plastered all over the front pages of business newspaper.

If you do not have a single idea what BitCoin is, I recommend you to spend some of your minutes to read these introductory video and materials below:

Reference links:
What is Bitcoin? (by Weusecoins)
What is Bitcoin? (by CoinDesk)
FAQs about Bitcoin

Now that you have read the basic of BitCoin from the links above , how we do we get our hands dirty with BitCoin in Malaysia?

To know and yet to do, is yet to know. 

Let’s roll our sleeves and get practical!

#1. Buying BTC with Malaysia Ringgit

You can start with buying your first BitCoin. The currency symbol for BitCoin is BTC while some exchange platform uses XBT to represent BitCoin.

The world’s busiest and largest BitCoin exchange is at Mtgox.com. Mtgox.com trades BitCoin with list of popular currencies including US Dollar (USD), Singapore Dollar (SGD), Hong Kong Dollar (HKD) and Thai Bath (THB).

Unfortunately, Malaysia Ringgit is not in the currency list.

The workaround for this is to first convert Malaysia Ringgit to a foreign currency, be it USD, SGD or HKD. Then transfer the money to Mtgox.com to start buying BitCoin.

Alternatively, there is this next best thing: LocalBitCoins.com. A number of Malaysians sell BitCoin here in Malaysia Ringgit (RM) denomination. This is the place where you can directly use Ringgit and exchange BTC.

Like Lelong.my, identify good sellers by reading their historical ratings and feedback before buying. This information is easily available by clicking the nick name of the seller. Prices of BitCoin vary from sellers to sellers. It is important to check price competitiveness and get the most BitCoin juice out from your RM. Payment can be as simple as bank transferring the agreed amount to their local Maybank or Paypal. Upon receiving payment, seller usually transfers BitCoin to your desired wallet within a short period of time.

That’s it!

You now have BitCoin, the golden cryptocurrency in your wallet.

Welcome to the Matrix.

#2. What I am going to do with BTC in Malaysia?

Keep it.

Like money, you can keep it as it is. On a good run, your BitCoin may appreciate as time go. It went from USD$13.28 to USD$1,230.68 remember?

Otherwise, spend it at Nook Malaysia located in Bangsar. Nook Malaysia is Malaysia’s only brick and mortar shop accepting BitCoin.

-or,

Spend it in Singapore with 18 physical merchants taking BitCoin as payment. (check CoinMap)

-or,

Be a BitCoin seller and sell it for cash using LocalBitCoins.com

#3. Accepting BTC as payment

If you are a business owner especially e-commerce retailer, option to accept BitCoin as payment might interest you.

BitPay.com is a payment gateway company specialized in providing payment solutions like how PayPal is doing today. Using ready-made API, you can plug BitPay into your shopping cart. Instead of accepting cash or credit card like PayPal, BitPay converts your Ringgit price tags to BTC equivalent and processes them as payment for your products or services. Upon successful transaction, BitCoin payment will be stored in your BitPay’s wallet.

To cash out, you can transfer your BTC to your preferred wallet for a minimal fee as low as 0.01 BTC. Alternatively, if you have bank account in USA, Canada or Europe, you can instruct BitPay to deposit directly into your bank account at no fee. At time of writing, BitPay does not direct transfer to any Malaysian or Asian bank account (check here).

However, the benefits of using BitPay includes low transactional fees – as low as 0.01%, no chargeback risk and privacy protection [Source].

In comparison, PayPal’s lowest rate is 2.4% + RM 2.00 per transaction [Source], with chargeback risk and arguable privacy protection practice.

No computer scientist is required to fit BitPay to your shopping cart. Most shopping cart today has integration ready module with BitPay. Among them are Shopify, WordPress, Magento, OpenCart, Drupal and osCommerce. If your shopping cart is not among them, manual integration is straight forward with BitPay’s API.

It is worthwhile to consider having BitCoin as part of your business payment now. Because it is rare in our backyard, you will be the pioneer in Malaysia’s BitCoin history once you have it today.

#4. What is Bank Negara’s view?

Early this year, Bank Negara published a public statement saying they do not recognize BitCoin as a legal tender in Malaysia and advised public to be cautious when dealing with it. What this means is that, while it is not legal tender, Bank Negara did not claim it is illegal either.

So, are they regulated?

At this moment, it is not regulated in most countries. In July 2013, Thailand became the first country in the world to officially put a ban on this digital currency [Source]. China followed Thailand’s footstep in December by forbidding financial institution from handling BitCoin transactions [Source]. It was the root reason BitCoin suffered a bloodshed uppercut and halved from its all-time high of USD$1230 to $600.

In a recent development, Singapore is arms wide open with BitCoin and is helping Singaporean merchants with it. Its taxation department, Inland Revenue Authority of Singapore (IRAS) gave guidance on income tax and GST for BitCoin usage in the republic [Source].

While in Europe, UK is taking effort to learn about BitCoin. They are working on reclassifying BitCoin as “Private Currency” from its current “Tradeable Voucher” classification [Source]. Germany Finance Ministry in August 2013 recognized BitCoin as “Private Money” [Source].

We also have the world’s first ATM machine for BitCoin in Hong Kong.

See also: S’pore gets Bitcoin ATM: Is cryptocurrency fast becoming mainstream?

#5. Not just BitCoin, there are Ripples, LiteCoin and SexCoin too.

BitCoin is not alone. There are Ripples, LiteCoin and few dozen others. Cryptocurrencies that are not BitCoin are called Alternative Coin or ALTCOIN in general [Source]. Think of these alternative BitCoin currencies as just another currency like Singapore dollar (SGD) or Hong Kong dollar (HKD).

BitCoin is the father of all cryptocurrency. It is the pioneer; the most widely used and is the fundamental for all other digital coins be it in concept, purpose or architectural design. It is regarded as the leader, the locomotive and the “US dollar” in the cryptocurrency universe. The market capital size for the BitCoin today is at an enormous amount, USD$10.91 billion [Source].

According to this e-commerce statistics guide, Nelson & PayPal Analysis forecasted Malaysia’s e-commerce market size to be at RM4.76 billion this year (2014). At today’s exchange rate, BitCoin’s USD$10.91 billion is about RM36.33 billion. That, is 7.63 times the size of our entire e-commerce market.

Just by that fact alone, those who think BitCoin is toy money, you may want to rethink.

Ripples, is the second largest cryptocurrency after BitCoin. Ranking second, it has USD$2 billion market capital. Even at second place, it is larger than our e-commerce market size.

Canada is joining the ALTCOIN bandwagon as well. Through Royal Canadian Mint, a Canadian government linked company famous for minting gold and silver coins is developing its own version of cryptocurrency namely, the MintChip [Source].

Some coins have catchy names. Here are some cryptocurrencies that caught my attention: SexCoin (Market Cap USD$688k), CatCoin (Market Cap USD$366k) and RonPaulCoin (Market Cap USD$195k).

You can read more on cryptocurrency market capital size at this comprehensive website.

What now?

Back in the 1970s, Rames, the eldest son of a rubber tapper in Perak rushed home from his maiden working day as a clerk in a local bank. He was excited to tell his father his experience with the latest fax machine from office.

Dad, you won’t believe how powerful technologies are today!“, Rames exclaimed.

Just by slotting letters into a machine here in Ipoh, people in Penang, Singapore or even London will be able to receive the exact same copy of the letter instantly!“.

His dad turned furious and gave Rames a big slap.

Son, are you trying to fool me? This is ridiculous! No way can a physical letter fly through space!“.

Just like how fax machines changed the way we communicate, BitCoin and other cryptocurrencies are evolutionary solutions to many of our day to day activities. The attention it is getting from governments, medias and businesses are too much to be ignored. While it may be new in Malaysia, it is wise to learn, understand and pick up this new way on how money works.

BitCoin may or may not work, we don’t know – but one thing is certain.

Cryptocurrencies are here to stay.

See also: Challenges and opportunities for Bitcoin startups

This article is written by KH Lau, Founder and CEO of leading gold and silver eCommerce store in Malaysia, BuySilverMalaysia.com.

The post BitCoin in Malaysia: Where are we now? appeared first on ECommerceMilo.

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