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What Is Cryptocurrency and how to invest in Bitcoin in Pakistan: Learn with this step-by-step guide

Ever since Bitcoin’s recent boom began with Elon Musk’s erratic tweet and Waqar Zaka’s advocacy for it, the interest in it has touched levels never seen below. Everyone wants to invest in Crypto – well, not really, considering the latest crash. Still, its value is bound to restore to previous levels, while the Pakistanis’ interest in Bitcoins is not going down sooner.

But, how to start, where to go, and how to buy?

These questions have rarely been answered by the experts, most of whom are running paid groups or redirecting users to their YouTube channels whose video tutorials only end up increasing the confusion. Little material exists to guide budding Pakistani investors in detail.

TechJuice brings you a detailed, step-by-step guide for buying Bitcoin (or any other crypto) coupled with everything about crypto there is to know.

How to Buy Bitcoin in Pakistan (Step-by-step guide)

Here are a few steps (on the web) you need to follow before beginning to invest in crypto in Pakistan:

Step 1. Download the Binance app or go to the website to create an account

Step 2. Create an account and verify it. There are three types of verification: Basic, Intermediate, and Advanced. The basic verification allows you to withdraw amounts up to USD 5,000. In comparison, you can withdraw up to USD 1,000,000 and get access to P2P trading with Advanced verification, which requires facial verification and scanned copies of your government-issued ID. Normally, the verification process takes less than 1 hour to complete.

See the detailed guide for Binance verification.

Step 3. Once verified, you can start purchasing by selecting the Buy Crypto -> P2P Trading option. You cannot purchase any cryptocurrency without first purchasing the USDT by Tether ( a stable currency used for purchasing digital coins)

Step 4. Enter the amount in PKR and select a trader for buying the USDT. Click on “Buy USDT” and proceed. You won’t be able to use a card for the payment and will have to send the amount directly to the seller’s bank account.

Note: All online trades are protected by Binance’s escrow, which means that each time a seller posts an ad, the amount of crypto mentioned in the ad is automatically locked in the seller’s p2p wallet. Therefore, if the seller commits fraud and does not release your crypto, you can appeal to the Binance customer support to release the crypto to you.

Step 5. Now that you have the USDT, you can buy Bitcoin equivalent to its value per the current exchange rate.

Step 6. Place the order by clicking on “Buy BTC” and verifying by filling Binance’s KYC. Once you place an order, you’ll have to transfer the required funds to the seller’s bank account (displayed along with the seller’s info).

Note: Do not make the mistake of going for the lowest offer because scammers usually offer the lowest price to lure buyers. Instead, go with verified merchants (yellow tick beside the name), those holding high seller ratings, and at least 300+ successful transactions to ensure safety.

Step 7. Once the transfer is complete, post the proof of transfer using the chatbox. Once acknowledged, the seller will release the asset. (If the seller doesn’t release it, you can appeal with Binance).

Note: You can’t buy crypto through any bank’s debit or credit card due to a ban in place by the State Bank, and the payments can only be made and received through local Pakistani bank accounts/JazzCash/EasyPaisa through the P2P (person to person) system.

Key Crypto Tips/Facts To Remember before trading in Pakistan.

Before you begin trading in crypto, its best to consider a few things:

Coins to invest

Invest in good projects with real-life value instead of going for “pump and dump” coins or $hitcoins such as Dodge coin.

Legality

Crypto is currently unregulated in Pakistan. However, it’s not illegal.

FBR/Taxation concerns

Your earnings would be channeled rebound a bank account. If they’re above a certain threshold, you might have to explain these sources to FBR at one point. So, keep a log of all your trades for the safe side.

Keep updated with the TRENDS: Most important!

Ensure that you are keeping up with the crypto-industry-related news AT ALL TIMES. Elon Musk had DOGECOIN up by 500% in a day with a few random tweets. Later, his company bought $1.5 billion worth of Bitcoin, and then Doge had to take a major beating!

Know when to sell and know when to buy as per the rapidly changing internet/social media landscape!

Cryptocurrency: What is it?

Cryptocurrency is a digital or virtual currency protected by cryptography. Cryptocurrencies are distributed networks based on Blockchain technology, which ensures that they cannot be forged. What makes it particularly attractive for those looking to save taxes or escape the legal radar is that a central bank or authority does not control it, making it immune to government interference.

Types of Cryptocurrency

There are different types of cryptocurrencies available in the world right now. However, Bitcoin is still the most valuable digital currency in the world. All these digital currencies have different specifications and functions.

These are some of the popular cryptocurrencies available in the world.

Crypto terms you need to learn.

Blockchain: A blockchain is a type of database in which a cryptocurrency’s digital transaction records are stored in groups or blocks. New blocks are continually created as extensions of the previous block, forming a chain. These blockchains build upon themselves within the database, storing an ever-increasing amount of data about a specific cryptocurrency transaction.
Decentralized: In the context of cryptocurrency, the term decentralized means the currency isn’t backed by a central bank or other financial institution.
Distributed ledger technology (DLT): A decentralized digital record. Unlike typical databases, there’s no central authority; the record is stored across multiple locations simultaneously, and once a transaction is recorded, it’s permanent. Blockchain is a type of DLT, but the technology can serve several purposes beyond cryptocurrency trade.
Bitcoin: The first cryptocurrency and still the most popular today.
Altcoins: Any cryptocurrency that is not Bitcoin. Some popular altcoins today include Ethereum, Dogecoin, and Litcoin. These altcoins each have different features and purposes.
Exchange: A marketplace where you can buy and sell cryptocurrency.
Wallet: A place to store your cryptocurrency holdings. Many exchanges offer digital wallets.

Is Crypto Safe to invest in?

A key driver behind Crypto’s rapid rise has been the anonymity and safety it has to offer. The blockchain technology backing cryptocurrency is inherently secure, thanks to the decentralized — and public — nature of distributed ledger technology and the encryption process of each transaction.

However, the rapid rise and falls in Bitcoin’s price has led many to part with their savings. At the same time, scammers have also become quite active with the rise of interest in cryptocurrencies, which is why experts advise caution for the newbies while urging budding traders not to lose hope.

According to Hamid Rahman – a renowned Crypto expert who runs a TikTok account and creates YouTube videos to spread awareness regarding Crypto, Bitcoin holders shouldn’t worry about their asset’s devaluing because Bitcoin will rise again. “Major players haven’t even entered the crypto market as of now. It holds a lot of potential and is yet to reach it’s actual boom. My advise to those in despair for not capitalizing in time is to not to worry since it’s not too late and they can still enter and make a lot of money with the proper guidance and training”, he said.

The legality of Cryptocurrency in Pakistan

Among other digital currencies, selling and purchasing bitcoin lies in a grey area as of right now. The State Bank banned all cryptocurrencies for a brief period in 2018 and later lifted the ban. It has not been regularized or legalized, and therefore, its trading has been allowed to continue by the government.

The future of Cryptocurrency

Bitcoin and some other cryptocurrencies’ values have skyrocketed in recent years. Bitcoin’s price has more than doubled in 2021, and Ethereum has more than quadrupled in value this year.

But whether that growth is sustainable, and what it means long-term, is still in question. “This crypto, blockchain technology, the public interest in it right now is being driven by a kind of speculative fever,” says Dr. Richard Smith, executive director of the Foundation for the Study of Cycles, a nonprofit organization dedicated to studying recurring patterns throughout economies and cultures.

Still, an increasing number of big, powerful players are validating crypto’s potential and its being approved gradually by large, powerful entities. Crypto’s adoption and acceptance is rising too.

Ultimately, the future of cryptocurrencies — their value, security, and staying power — is still questionable. However, whatever your interest or motivation is, experts stress the importance of making sure you understand the unique volatility and risk factors of cryptocurrency before investing.

Ahsan Zafeer

A digital marketing professional specializing in content-based functional areas - Ahsan Zafeer is driven by a never-ending passion for developing, nurturing, and strategizing key content aspects. He writes extensively on tech, digital marketing, SEO, cybersecurity, and emerging technologies. He also serves as a digital marketing strategist and freelance consultant for globally oriented organizations. He tweets @AhsanZafeer