How to Purchase Cryptocurrencies Using WeChat, Exodus & CoinCola app (2017, China)
This article is provided as an overview of how I personally use CNY to purchase cryptocurrencies (primarily Bitcoin and LiteCoin). It is not meant to be any sort of financial advice, nor do I accept any responsibility for any losses you suffer by making an investment that leads a negative result, or if you are robbed or duped by a shady seller. Please fully understand the risks before you 'play'. Any decision to purchase or sell Bitcoins is your decision and I will not be liable for any loss suffered.
At this stage I will not go into 'What is a cryptocurency?', 'Which cryptocurrency should I buy?' or 'What can I spend my cryptocurrency on?', for the following reasons:
- For me, this is part of a long-term investment strategy. I am not day-trading, nor do I intent to check the value of my investments daily. This is a 5 to 10 year plan for me. Please always bear that in mind when reading this article.
- For your reference, my goal is to acquire 1 Bitcoin BTC (often referred to as 'digital gold') and 10 LiteCoin LTC (often referred to as 'digital silver'). At today's price, this represents around $10,000 USD, but has been predicted to represent a considerably larger sum in the future.
- A good friend also suggested that 'Ripple' is an excellent choice because it looks to be the top-pick of the cryptocurrencies by the ATM and banking networks (existing financial markets and institutions), but I need to do more research into that.
- This is a long-term play for me, so I'm not concerned about exactly how to get my money back out at this moment in time. If need-be, I can fly to one of the many bitcoin ATM locations and make a cash withdrawal, or sell them on one of the many open markets, but it is my hope that in the future we will be able to use cryptocurrencies just as we use wechat pay today.
OK, before I begin, I know what you're thinking: "If Clulow is already publishing an article about how to do this, this ship must have already sailed". Ok, yeah, fair point, BUT: although I'm kicking myself for not having jumped on this 3 or 4 years ago (I want to blame the bubble that is China, but really I just missed it),
I'm getting in now because I have done some initial research and still strongly believe that this is just the beginning. When tech experts use phrases like "This is like back in the day when we had the internet but we didn't know what to do with it" and "this has the potential to change the world", then there's no point dilly-dallying. I'm also really lucky that I have a small amount of expendable income to invest on this, over a period of time.
My strategy is to follow the advise of "The Intelligent Investor" author Benjamin Graham, and pick my game-plan, then just add to it as regularly as I buy groceries, each month paying in, regardless of wether it's up or down, knowing that in the long-term it will be up and up.
Finally, the question: why I am writing this? Well, as you may or may not know, when I think I'm on to a good thing, I like to tell my friends and family, even if just to let them know what I'm up to. Moreover, if you would like to try as well, I hope the following steps help you to get underway yourself!
- A Bank Account with the Bank of China (I pay cash in to here using their ATM network) - or whatever bank you use - and ¥1,000 of funds to 'gamble' with.
- A WeChat account with WeChat Pay enabled (and connected to the B.O.C. account)
- CoinCola app - an online marketplace for buying and selling BTC with other Chinese nationals, either by WeChat, AliPay, bank transfer or cash
- Exodus cryptocurrency wallet app on my laptop
- Ledger Nano S - offline or 'cold' wallet (optional)
- General understanding of IoM - Internet of Money - you may watch this video to begin with: https://www.youtube.com/watch?v=qkxdys-Ek9U
My Ultimate Goal:
||BANK OF CHINA
||LEDGER NANO S
- Put cash into Bank of China
- Find a seller on CoinCola and initiate the trade
- Connect to them and pay via WeChat
- Confirm trade is complete in CoinCola and leave feedback
- Consider adding them as a 'trusted' seller
- Extract BTC to Exodus
- Manage Your Portfolio as you wish
- Transfer funds from Exodus to your offline wallet*
* I only purchased my offline wallet yesterday, so have not yet been able to do this step yet, but I will update here when I do.
1. Put cash into your bank
I hope this doesn't need too much explaination, but the main takeaway here is that this is a decentralised, borderless way to move funds around the world, without the need of a clearing house, a third-party financial institution or even a governing body to monitor what you're doing with your own money.
If, like me, you are playing for the long game, this might be an excellent way to get finances generated in China out of the country, otherwise you may choose to bring money into China in order to follow the process I outline below.
2. Find a seller on CoinCola and initiate the trade
(I'm not going to explain downloading and setting up the app here as it's in English and relatively straight-forward - I think it took me about 5 minutes.)
- Click 'search' (top right corner)
- Country: China; Price: 1 - 100,000; Payment: National Bank Transfer; Currency: Chinese Yuan; SEARCH
- Select a seller with a low enough minimal purchase amount and high rating ('newbies' can only buy 1,000 CNY to begin with)
In this example, I picked someone who has hundreds of people who trust them:
- Click 'contact' in the bottom left-hand corner
- Confirm that you can use wechat:
- Some people will say "不好意思，微信不可以" ("Sorry, WeChat is not OK")
- Some will agree to trade in this way and give you their wechat ID
(NOTE: at this point, you are losing a degree of anonymity - depending on your WeChat privacy settings)
- You can track all conversations under 'Order' > 'Active'
- For those that agree to trade via WeChat, be sure to check their price, score and trust-rating, before you continue. Ensure that you meet their minimum asking amount.
- Please note: newbies can only make a trade of no more than 1,000 CNY to begin
- Commit to the purchase
3. Connect to and pay them via WeChat
So this is where we lose a little annonymity in the entire cryptocurrency world, but you can use certain addresses for more public exchanges and addresses for more private exchanges.
Overall, as long as you maintain solid control over your wallet, there's not too much to be concerned with, at least as you get started.
(Check out "The Art of Invisibility" by Kevin Mitnick for more on this)
Once they confirm their WeChat details, you add them and make a cash transfer like any other WeChat friend. You may or may not choose to send them a screen shot of your request to buy, just to clarify.
My personal process is to add the tags 'BitCoin' and 'cryptocurrency' to their WeChat profile on my phone, include the words 'CoinCola' in the description and block them from being able to see my personal moments
(unless I'm totally sure I wouldn't buy from them again, in which case I delete them altogether)
4. Confirm Trade is Complete and Leave Feedback
- Help to confirm to others that this is a trusted seller by leaving a positive feedback rating
5. Consider Adding Them as a Trusted Seller
- By clicking the '+trust' button, you then add them to your list of trusted sellers. This helps their score ranking, but also makes it easier for you to find them for future trades.
6. Extract BTC to Exodus
- Click 'Wallet' > 'Send' (because you want to send the BTC from the CoinCola exchange (basically under someone else's control) to your own private wallet)
- In Exodus app on your computer, select 'Wallet' > 'Bitcoin' > 'Receive'
- Using CoinCola on your phone, scan the QR code on your coputer within the Exodus app to copy acress the wallet address:
- In CoinCola (phone app), confirm the amount and other details and send
7. Manage Your Portolfio As You Wish
- Here, I am exchanging BTC for LTC (remember my goal is 1 BTC, 10 LTC):
8. Transfer Funds from Exodus to your offline wallet
- This is the absolutely safest and most secure way to store your cryptocurrency in the long-term.
- I will update this part of the article once I receive my Ledger (already shipped)
Other Links / Resources
I would like to personally thank Amir, Richard, Mieni, Iago, Zobbster, Peter and Tom for either advising me, guiding me or joining me on this journey.
Last Updated: 2017-11-02