Third, trading in crypto assets has been allowed in Indonesia under CoFTRA – the institution that regulates commodity futures trading. Buying and selling cryptocurrencies, such as Bitcoin, is legal.
Didn’t the government announce that Bitcoin is illegal?
What is not or has not been allowed in Indonesia is to use Bitcoin as a means of payment transactions.
In Indonesia you can’t buy anything and pay with Bitcoin.
The existence of legal certainty regarding the legality of Bitcoin trading in Indonesia makes investing in crypto assets safer according to regulations.
Transaction Mechanism
The process of buying and selling in Bitcoin is done on an exchange or exchange.
This exchange functions like a marketplace, a place that brings together bitcoin buyers and sellers.
Services on the Exchange are buying, selling, storing and transferring of crypto assets. Crypto asset transactions occur between the members of the exchange.
Exchange itself does not do buying and selling.
Its role is only to be an intermediary and for that it will collect a number of fees, such as fees for buying and selling and withdrawing money.
Each exchange will determine the types of crypto assets that can be traded on their marketplace. Each exchange has a different list of crypto assets.
Unlike transactions on the stock exchange, where investors have to go through a broker as an intermediary, on a bitcoin exchange, transactions occur directly between investors. There are no intermediary brokers in transactions on bitcoin exchanges.
The storage of bitcoins or crypto assets is done in a ‘wallet’. Exactly the same as when we have money, it is stored in a wallet or safe, but the difference is that bitcoin storage is done digitally.
Wallets are provided by exchanges or investors can have their own wallets. Just like customers who can save their money in the bank or at home.
In the wallet, the bitcoin owner stores a ‘private-key’, which is a unique code to be able to access bitcoins. The code must be carefully guarded, not to be forgotten or stolen.
Bitcoin owners will get a wallet address. This address is like an account number at a bank, which is the destination if money is sent.
In order to transact crypto assets, investors must choose a ‘pair’ of coins to be traded. Exchange provides various pairs on the platform.
The most popular pair is Bitcoin / USD (BTC / USD).
Because bitcoin transactions occur between exchange members, the price of buying and selling bitcoins between exchanges can vary.
The price can be different depending on liquidity, whether or not there are crowded transactions on the exchange.
Investors can monitor any time on the internet about where the most competitive bitcoin price is. Shown comparison of Bitcoin prices on each exchange.
What if you want to start selling, buying and storing Bitcoins? What are the fees and costs for transactions?
How to Buy and Sell Bitcoin
I entered several bitcoin exchanges in Indonesia that were officially registered with CoFTRA.
See how to register, KYC, minimum deposit, how to buy and sell, and fees requested by the exchange.
I summarize the steps below.
Open Account
The first requirement is to register and open an account on the exchange. The method is quite easy.
The terms for opening an account are filling in your Name, Email, Address, and agreeing to the Terms of the Agreement and the Privacy Policy.
You can apply via the mobile application or via the website. The application can be downloaded on Google PlayStore and Apple Store.
Everything is done online. There’s no paper to fill out, nor do you need a wet signature.
KYC VerificationAfter opening an account, the user must proceed with KYC verification.
- Without passing this verification, users cannot make transactions even though they have opened an account.
KYC verification is an important process to protect all participants on the exchange and ensure AML (Anti Money Laundering) policies are properly implemented.
The KYC verification process consists of uploading ID photos, filling in personal data, taking selfie photos with normal motion and random motion. KYC data will be processed which takes at least 1 business day.
It is not uncommon for verification to fail. Some things that need to be considered when verifying are making sure you don’t have an account on the exchange, providing true and accurate personal data, and providing photos that match your ID card.
KTP must be original and must be clear at the time of upload. When taking pictures make sure the face is clearly visible without using a hat and glasses.
When taking a selfie, make sure the face is in the center so that the photo fits the face and in the liveness photo, the user will be asked to do one of the movements. When taking a photo make sure to hold the movement for 3 seconds, if it fails, please repeat it again up to a maximum of 3 times, if it is successful please select the finish button, and wait for confirmation in the email
Deposit
Passing verification, the next step is to make a deposit to be able to buy Bitcoin. There are two types of deposits, namely Rupiah and Bitcoin.
The process of buying Bitcoins is quite easy. It starts with choosing the pair you want to buy and sell.
Create an order by entering the price and amount of Bitcoin you want to buy, then the required amount of rupiah will appear. Choose the type of order, whether taker or maker.
You can also pay with crypto assets. Just choose the right pair.
If the taker, the order will be executed immediately according to the existing market price. The number of Bitcoin holdings will be updated immediately and the amount of Rupiah deposit will decrease according to the number of purchases.
For the maker, the order does not occur immediately, wait until it matches at the desired price. While it hasn’t matched yet, the order will be waiting in the order book.
The unit for buying and selling Bitcoin can be up to eight digits after the comma, which is 0.00000001 BTC. So, users can transact with a fairly small number (such as 0.4981537 BTC).
That’s why I see some exchanges can accept transactions as small as IDR 30 thousand.
This amount can be done even though the price of 1 bitcoin reaches hundreds of millions because the digits of Bitcoin that can be purchased are as small as eight digits behind the comma.
The process of selling Bitcoin is the same as buying it. Only now, after successful execution, Rupiah deposits increase and Bitcoin holdings decrease.
Withdraw
Rupiah currency can be withdrawn from the Exchange to the user’s rupiah account. The method is quite easy, submit a withdrawal in the application.
Users can also withdraw bitcoins held on the exchange. All you have to do is enter the wallet address to which you want to send bitcoins.
It takes a few minutes to 1 x 24 hours for the rupiah withdrawal process. Since exchanges use banking networks to send money, the speed at which they are sent is determined by the process at the bank as well.
Withdrawals will incur a fee. There are also provisions for minimum and maximum withdrawals for rupiah and crypto coins.
Each exchange has a different withdrawal fee policy.
For rupiah withdrawals, some apply a fee in the form of a percentage of the withdrawal amount or a flat fee regardless of the number of withdrawals made.
Meanwhile, for the withdrawal of crypto assets there is a flat fee paid from the transferred coins.
Cost
Exchange applies a number of fees and fees in bitcoin transactions, namely:
Buy and sell. Fee is calculated based on a percentage of the number of transactions.
Withdrawal. Fee for withdrawing money to rupiah account. Some have a percentage fee, some are flat regardless of the number of withdrawals
Deposits. Fee for depositing rupiah to an exchange account to be able to purchase crypto assets.
Transfer.
Owned crypto assets can be transferred to other exchanges or to fellow members on the same exchange.
Bitcoin Transfer
Crypto assets can be transferred to other exchanges or to fellow members on one exchange. All you have to do is fill in the wallet address that you want to send out of the exchange or write down the user ID to send it to an exchange.
The wallet address becomes a kind of account number when transferring money.
Blockchain transactions take about 30 minutes for Bitcoin, and 5-10 minutes for other assets.
Quite fast, considering that transactions are carried out between countries.
Every delivery of crypto assets can be checked by looking at the block confirmation on the blockchain and also the support chain. Each exchange has a different minimum block confirmation limit for validating delivery of crypto assets.
For Bitcoin transactions, checks are made at https://www.blockchain.com/id/explorer, Ethereum at https://etherscan.io, Bitcoin Cash at https://www.blockchain.com/id/explorer.
Unlike deposits which are usually free of charge, bitcoin crypto withdrawals will incur a fee. And there are minimum and maximum withdrawal conditions in a day for bitcoin crypto.
Wallet
Wallet is a place to store crypto assets. Same with us keeping money in the wallet.
We will get the wallet address. This address is used to send or receive crypto assets.
We can store crypto assets on an exchange, where the wallet will be managed by the exchange, or we can have our own wallet. The security of the wallet must be ensured because our assets are stored there.
The larger the ownership of bitcoin or other crypto assets, the more attention must be paid to this wallet issue. We want Bitcoin to be safe.
Security
Exchange implements 2FA (Two Factor Authentication) which is an online security feature, where users will verify their identity 2 times.
When logging in to an account at Exchange, after entering a user ID and password, the user will be asked to enter a special code sent via SMS or using Google Authenticator on a cellphone.
This method guarantees that every transaction is validated by the account user himself. Not only must know the user ID and password, but also have access to a cellphone, to be able to open an account.
Trading Features
For those who want to focus on trading, the exchange provides various features, namely:
Chart analysis to analyze prices technically, such as transaction history (orders and trades).
Order Book which shows the current order position. This information is important for analyzing possible price movements.
Stop Loss. An important cut-loss feature to manage the risk of sharp price fluctuations
Short Selling. Can do short-sell when the market is down.
OCO, or “One Cancels the Other” for placing two orders at the same time, limit and stop-limit orders, which is useful for taking profits and minimizing potential losses.
That’s enough hope it’s useful.
