We get it, the days when cryptocurrency was the preserve of nerds are now long gone. Even though the number of people involved in the trade of cryptocurrencies is still very small in my estimation (a few thousand maybe) these days cryptocurrencies are pretty much mainstream.
Despite their growing familiarity with the subject of cryptocurrencies, most people are still bystanders and have questions. The most popular question I often hear many people asking is how do I buy Bitcoin? Where do you get it? Is there a place where you walk in, swipe and they give you Bitcoin?
The RBZ tore it all down
Unfortunately, that is no longer possible and we have the RBZ to thank for that little predicament. There was a time when buying Bitcoin was easy in Zimbabwe. We had a thriving and well-established exchange called Golix. Several startups were on their way to join the sector when the RBZ tore it all down.
They didn’t explicitly ban Bitcoin, they just instructed banks to stop processing transactions associated with cryptocurrency exchanges. The distinction is important as I will explain later on but that order effectively killed Golix and other budding cryptocurrency exchanges that were beginning to put down their roots.
During the pre-ban era buying Bitcoin was simple, you just joined an exchange, link your wallet, load funds using Ecocash or bank transfer and start trading. You only had to find someone selling Bitcoin and put in your offer rate, if the seller accepted, your trade was executed, the seller got their ZWL and you got your Bitcoin or whatever cryptocurrency you had bought sent to your wallet.
Now it’s just peer transactions
All trades on an exchange take place under the watchful gaze of the exchange. The exchange acts as a trust which holds both the Bitcoin and ZWL/USD funds in escrow. Funds are only sent to each party once both have been satisfied with the transaction. That was a relatively safe way to deal to buy and sell Bitcoin.
These days if you want to buy or sell Bitcoin you are restricted to peer transactions only. This means if you want to buy Bitcoin you have to actually find someone who has Bitcoin to sell and negotiate with them. The trouble with such transactions is that there is always room for scammers to get the better of you.
At first, that sounds a bit daunting especially during COVID-19 where our movement is restricted. This means that people are sometimes conducting Bitcoin purchases and sales online without ever seeing the face of the person that they are dealing with. WhatsApp groups are full of stories of people who get scammed.
How to buy Bitcoin and other cryptocurrencies in Zimbabwe the right way
Again you can forget about buying Bitcoin from exchanges if you are a Zimbabwean. Most exchanges are located in territories where central banks and other financial authorities have placed restrictions on their operations and usually these restrictions prevent them from selling to Zimbabweans.
Remember what I said about the RBZ not banning crypto-currencies? It’s important because it means while we no longer have exchanges you can still legally buy or sell Bitcoin.
The only easy way to buy crypto is from local dealers and other people who may be disposing of their Bitcoin for whatever reason. That sounds daunting and discouraging at first but believe me. There are plenty of such people, I know people who sell tens of thousands of Bitcoin on a regular basis.
You just need to follow these steps if you want to buy Bitcoin:
- First of all, familiarise yourself with the basics first. Learn what is involved in Bitcoin/cryptocurrency transactions and watch videos if you have to.
- Create a wallet that you will use to store your crypto I would recommend something like Coinbase, it’s a beginner-friendly wallet
- Find a crypto-currency exchange group. Be careful here and only join a group with well-known dealers. Ask in Techzim WhatsApp groups and someone will point you in the right direction.
- Once you have entered a group, establish trust. The very same way you do not want to be scammed is the same way other people are afraid of being scammed by you. Do a few face-to-face deals first so that you will have people that can vouch for you.
- When you post and advert e.g. I want to buy US$300 of Bitcoin using Ecocash, people might inbox you with offers, in that case, make sure to publicly ask members of the group if there is anyone who can vouch for the person making the offer.
- If no one can vouch for a given individual do not go through with the exchange
- Also, make sure you give people the right wallet address to which they can send a given crypto-currency. Sending the wrong crypto to the wrong wallet will result in that crypto getting lost forever.
It’s sad that this is what it has come to when one wants to buy cryptocurrency, all this low-level functionality is what exchanges were made for especially the trust part, but unfortunately, if you want to buy or sell Bitcoin and other cryptocurrencies in Zimbabwe this is the kind of legwork you have to do. One wrong step and you risk getting scammed.