KUCHING: Investors with a penchant for volatility may consider cryptocurrencies such as Bitcoin as an investment tool.
Many would have heard of Bitcoin by now – an electronic currency made by computers forming a series of unique numbers through complex math problems, sold on unregulated exchanges and accepted by a growing number of individuals and businesses.
In Sarawak, enthusiast Reuben Yap is one such individual adopting Bitcoins in his business.
“I’ve heard and read about Bitcoin as a form of virtual currency but only looked into it in detail when it was being requested by my customers as a form of payment for my Internet privacy and security services back in January 2013,” he told The Borneo Post.
“If used properly, Bitcoin can be an anonymous form of payment and therefore a popular choice among those who wished to purchase my service without having payment records tied to their identity.
“It is basically a no-brainer to accept it as it is almost entirely free of merchant fees, has no charge back risk and was easy to implement.”
This compares with other online payment methods such as PayPal or credit cards which charges three to four per cent, a fixed flat fee charge and currency conversion charges.
To note, Bitcoin is an entirely digital currency that does not have any central controlling body unlike fiat currencies such as ringgit or US dollar which have a Bank Negara or a Federal Reserve.
It operates by everyone maintaining a copy of the public ledger of all Bitcoin transactions and people contributing processing power to secure and verify transactions via a process called mining.
“This means I can transfer money worldwide in a matter of minutes with very little transaction fees and without relying on any intermediaries,” Yap further explained.
“Being digital, it also removes the need for banks to hold your money as you can easily store your Bitcoins in your own computers or in a web wallet no matter the amount.” He, however, underscored Bitcoin’s volatility.
“Bitcoin is a very volatile investment and should be treated as such – high risk and high return or loss.
“When I first started using Bitcoin, it was only US$50 per Bitcoin but it had once risen to US$1,000 in November 2013,” he said, adding that it is now hovering at about US$375 per Bitcoin.
“It is not for the faint of heart and I would only recommend putting in money you can afford to lose.”
When asked on his personal thought about the experience of utilising Bitcoins, Yap said he is now interested in how Bitcoin will change the way money is being paid and handled throughout the world.
“For Internet businesses and international trade, it really facilitates the free flow of money and reduces the cost of transactions,” he said.
“Bitcoins in Malaysia have mainly been used as a speculative investment which is normal with any new type of investment but awareness is rather low.
Most people just see it as a way to speculate on the price of Bitcoin without understanding what it is or its long term potential.
“There are only a handful of merchants in Malaysia that accept Bitcoin and it is not easy to buy BitCoin at market rates.
“One of the main drawbacks of using BitCoin in Malaysia is the lack of a Bitcoin exchange to exchange due to our laws that require a money services license to take deposits hence stifling the growth of the currency.” Yap said awareness is slowly growing and there are local efforts such as by Arsyan Ismail of cryptomarket.my and bitpos.my to encourage the exchange and use of Bitcoin locally and also regular community meet ups in KL and Kuching.
“Now is a great time to be an early adopter or to simply integrate Bitcoin acceptance into your business at little or no cost.
If you have a smart phone, you can easily install a Bitcoin wallet that can accept Bitcoins and calculate the amount of Bitcoins needed for value in ringgit.
“Sarawak is also particularly blessed with relatively cheap electricity rates making the running of Bitcoin mining farms more viable.”