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Investment Portals for Cryptocurrency in South Africa | The Rand and Digitalization

10 June 2019 Morne Olivier

A Series about Digital Investment Funds & Digital Currency exposure


In #Block1 we covered the basic differences between Blockchain Technology and Digital Currencies, (Cryptocurrencies) like Bitcoin. Today I want to take a look at some of the latest options we have to enable investing in Digital Currencies in South Africa.

The South African Financial market has over the last few months released some exciting new products to assist in the on-boarding of brokers and investment funds to this reasonably unexplored Digital Assets Category. Call it Cryptocurrency, Tokens, Bitcoin, Digital Currency it all comes down to the current International Trend that is starting to take shape.

Blockchains are being adopted and built and the Digital Currencies on them are finding more and more use cases to provide better trading, investment, payment, and stability.

The Digitalization of Financial Institutes, Insurance, Supply Chain, Governments, Medical, IOT, Identity, Asset Management, and Payments are imminent and therefore crucial for South African Financial Development to come up with new ideas in the Digitalization Landscape for investment purposes. It is important to understand that new concepts that bring us opportunities to trade and invest in like Cryptocurrencies or the Blockchains they are on are vital to our new and future economy as the Rand continues to be stretched by World Markets.

In fact, the Rand is at a critical point of support or resistance at the level at 14.5 where if resistance is turned into support the weakening of the Rand is imminent.

It is important while we are in the beginning stages of the 4th Industrial Revolution to familiarise yourself with the Digital Currencies and Technologies that are out there. You need to be prepared for when clients start asking questions about which Blockchains or Cryptocurrency projects you think they must invest in. Even better be able to put together your own risk assessment, and draw up a portfolio to track and see its potential. Whilst it is very easy just to stay on the Bitcoin subject, isn’t it better to be able to provide the equivalent in Low, Medium and High-risk categories?

Let’s look at 3 new entry points to the market and I’m hoping you will go explore them.

Besides exploring them you need to go research the Blockchain Assets and Digital Currencies I mention for you to better understand their Use Cases. Blockchains I have been researching and keeping up to date with over the last 2 years has been:

ETHEREUM, NEO, EOS, STEEM, WAVES, XLM, KOMODO, ARK, IOST & VECHAIN

They also provide a Passive Income or “Interest” based incentive for Investors.

I want to mention Luno as South Africa’s first success story in the Cryptocurrency Landscape. Funded by Naspers, Luno certainly made it easy for South Africans to buy Bitcoin, enter Exchanges and other platforms. You can try Luno out; it is a very safe and user-friendly platform that is Centralized. Link your bank account, buy Bitcoin or Ethereum and HODL.

#1 First up is VALR Exchange

Recently Launched and now boasting the (ZAR) Trading Pair you can deposit Rand onto this Centralized Exchange and buy from a choice of up to 50 Cryptocurrencies. It is a great Exchange to familiarise yourself with the various Digital Assets and the top volume trading pairs. As VALR undoubtedly will grow with ex RMB Blockchain Lead Farzam Ehsani and partnership with Bittrex it will outline Digital Currencies for Blockchain Investment purposes of choice.

I did an Interview with CEO Farzam and explained Volume and Liquidity of Digital Exchanges here:

Digital Currency Exchanges | Volume and Liquidity

#2 Second in my exposure to Digital Assets I have Lothlor Token Fund, (LOT) Lothlor takes the risk out of Trading. As an investment fund, it uses Ethereum as its foundation and 20 Digital Currencies. The fund is on the Ethereum Blockchain and uses MakerDAO (DAI) Stable Coin to offset risk.

Simply explained, you buy LOT Token at its current price. The investment fund buys and sells Ethereum and Chosen Cryptocurrencies as their prices rise or fall and when they do go negative the LOT Token is placed in the Stable Coin DAI to keep its value. The LOT Token therefor rises in value as the market progresses in a positive direction.

Lothlor Documentation

Lothlor.com

#3 The brand new Digital Rand, (ZAR). Now you might ask well VALR has ZAR how is this different and how does this form part of the Investment strategy. Digital Rand is pegged 1:1 with the South African Rand 1 Rand = 1 ZAR. It is less Centralized meaning because it is an ERC 2O Token on the Ethereum Network it is exchangeable with any Token on the Ethereum Network by the click of a button. This in relation to ZAR on the VALR Exchange which is a Centralized Coin on that Exchange, one that you can’t send to another Exchange.

The decentralized nature of ZAR Stable Coin to the Rand makes it unique in that the Digital Currency is always in your position and can be used to trade or swap with any Ethereum based ERC 20 Token Wallet from your phone or desktop.

“Just for reference, these swap transactions are being developed in such an easy format that your children will be able to do it before you. Here is an article pointing out the Enjin Wallet which I have and is one of the best and was included in the new Samsung Galaxy s10.”

Where’s the investment part? Now to go a bit deeper ZAR Digital Rand is offering Investors the opportunity to Stake (Invest) in Digital Rand to grow the Liquidity pool. Called Digital Rand Staking (DRS) as Liquidity is raised and monthly after Audits are completed the Investors will share in the newly minted profits. I will explain this in more depth next time.

In the next few weeks, I will find more Investment offerings in the South African Digital Landscape and start comparing how they all match and shape up. This is exciting times with the financial world as it changes and starts adopting the Digital Future.

Find me on LinkedIn

Morne Olivier

#morneolivier

Freelance Content Marketing specializing in the Education of Blockchain Technology.

I am not a Financial Advisor


 

Disclaimer

Glossary:

Blockchain

A Blockchain originally block chain, is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data.

Bitcoin (BTC)

Bitcoin is a cryptocurrency on the Bitcoin Blockchain and is a form of electronic cash. It is a decentralized digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer Bitcoin network without the need for intermediaries

Decentralized

Decentralization is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group.

Stable Coin

Stable Coins are Cryptocurrencies designed to minimize the volatility of the price of the stable coin, relative to some “stable” asset or basket of assets. A stable coin can be pegged to currency, or to exchange-traded commodities.

Wikipedia

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