Cloud mining and how it works
Cloud mining is a common practice in cryptocurrencies trading. This is a method by which cryptocurrencies like Bitcoin and Ethereum are mined without having your own set of hardware or software. In fact, you only need an internet connection and get involved in cloud mining. This is a direct opposite of what you would have heard about cryptocurrency mining where you need to have very powerful computers and specialized software.
In cloud mining, you only need an account. Companies will usually require you to do this and then you can get involved in cloud mining at a nominal fee. Like any other cloud-related processes, it will be a collective effort by those over the internet. As such, you will notice there this form of mining is carried out by a lot of people in many locations across the world. It adopts ‘hash power’ where everyone involved has some form of profit when it happens. By doing so, you would not need to spend on electricity and computing costs.
Cloud Mining companies in Malaysia
Among the companies that offer cloud mining services in Malaysia are:
- Genesis Mining – known to be among the largest cloud miners in the world, you can access this through genesis-mining.com
- CryptoGold – you only need to purchase a one-time payment and you are part of the network
- Hashnet – Among the major names offering cloud mining services available in Malaysia
How is investing in Bitcoin as compared to art?
Investing in art has been seen as one of the very stable channels to put your money into. This is the same with almost every form of investment as long as there is a return at some point. While Bitcoin offers an ideal and good ROI to put your cash in, art can be in its own way be lucrative too. So, how do these two investments add up to?
- Both require some form of upfront payment where you place your money and then wait for it to change
- Bitcoin can be a lot more volatile
- The risk in art is that the artist might not become famous (if you buy them as they are emerging)
- Price of art will increase over years (10 or more)
- Price of bitcoin will change overnight, sometimes 10 times more within days (or minutes)
Will Bitcoin be used to buy coffee?
The most important factor when it comes to using Bitcoin to purchase anything is that it must first be recognized as legal tender. This means it becomes Fiat currency like the US Dollar and Malaysian Ringgit. To use Bitcoin to buy a cup of coffee is not impossible and this is what many are talking about in major economies. After all, there are now all types of payment engines like Alipay, Zalopay and WeChat has got involved too. However, the main hurdle perhaps would be in the gas or more easily understood as the commission. To transfer Bitcoin, there is a gas which is about 0.0005 per transaction. If you are transferring hundreds or thousands of dollars, then the gas might be insignificant. But if you are going to use it to buy coffee, the ‘tax’ itself will cause the price of coffee to be higher. This will only be possible if lighting-network becomes fully accessible and available for consumers.
The lightning-network is a technology developed to only facilitate Bitcoin transactions. It is a scalable network in which it can help to facilitate instant payments where you can transfer Bitcoin from one to another without any hassle. If that is widely available, then the purchase of low-cost items will become easily available.
Bitcoin transaction or transfer fee
The commission used for Bitcoin transactions is known as Satoshi. Sometimes referred to as gas, it is paid to all Bitcoin holders as long as you own them. It is the smallest unit used in Bitcoin. To understand how Satoshi works, you need to fathom its size. It is actually one hundred millionth of a single bitcoin. This is represented as 0.00000001 BTC. BTC here is the acronym used for Bitcoin. The unique features of this transfer fee are:
- The name Satoshi was derived from Satoshi Nakamoto, the creator of Bitcoin
- All the amounts used and traded in the blockchain uses this denomination.
- The value of the Bitcoin is presented as a number of Satoshi. For instance, one Euro cent is about 90 Satoshi
- The value was first decided by Nakamoto at 100 million bitcoin
- The term Satoshi is used even if it is in plural form. This is because it is a Japanese word which if used correctly should be Satoshia. However, there has not been any changes to it
- To date, there has been a lot of suggestions to put a symbol for it (like other currencies) but so far, nothing has been confirmed.
Is Bitcoin in Malaysia Legal?
As of July 2018, Bitcoin is still not a legal currency in Malaysia. Over the past few years, Bitcoin has become one of the most popular investment methods in Malaysia (and the world of course!). This is so obvious to an extent that there were reports that some food stalls around Malaysia started accepting Bitcoin for the purchase of foods including one Nasi Kerabu seller in Kelantan and Fish Noodle stall in the Klang Valley.
Used as money in Malaysia
For starters, Bank Negara Malaysia is not the issuing authority of Bitcoin (no Central Bank is) in Malaysia. hence, it is not recognized as a form of money here. In Malaysia, the Central Bank of Malaysia Act 2009 controls what is recognized as currency within the country. Hence, it is very important to note that BNM does not endorse nor recognize Bitcoin to be used legally. However, it recognizes the existence of this cryptocurrency and has been making efforts to regulate it. Take note that Bitcoin is not recognized as foreign currency either. However, it is not against any regulation to own Bitcoins at the moment but do expect more regulations and guidelines to emerge in the coming months.
Cashing out your Bitcoin in Malaysia
Cashing out your Bitcoin can be very troublesome if you do not have the right information and channels. After all, you do own a cryptocurrency which is in digital form. What good it would be if you have millions but is unable to touch the physical form when you decide to cash out. There are various ways to do this if you are in Malaysia as certain banks do have this facility. This includes:
- Transfer your Bitcoin to your PayPal account
- Transfer to a Malaysian bank account
You might have by now heard of Bitcoin ATMs in other parts of the world. There is now one available in Malaysia that allows you to do so. This is available at the PINKExc building in Ipoh, Perak. All you need is a Bitcoin wallet and you are ready to make your withdrawal. Since it was made available, the machine has been operating and providing about 50 transactions daily. The process has been reported to be very easy and straightforward where you need to have the QR code of your Bitcoin wallet and then specify the amount you wish to withdraw and be on your way to receiving your cash from your investments in Bitcoin.
Can you buy bitcoin in Maybank and other banks?
Malaysian banks currently do not offer any services for you to buy Bitcoin. To date, you can buy (and sell) Bitcoin via exchanges. In most cases, you will be required to deposit your money into a local bank in Malaysia. This would be to ensure you have funds in your account with any of the exchanges for cryptocurrencies. Ensure that your account is with an exchange which is registered with Bank Negara Malaysia. After that, you can make your deposit. Among the banks that are known to have this service include:
- Maybank
- CIMB Bank
- Hong Leong Bank
- RHB Bank