NCX Concierge Service
NCX is a simplified cryptocurrency exchange platform that has been designed to make it easy for users who have a reasonable amount of funds to invest but are not interested in the technology and intricacies of the blockchain and cryptocurrencies.
(Small investments will produce relatively smaller returns than larger investments due to the fees that are currently being charged by miners etc. This will change when Ethereum 2 is launched.)
The exchange provides information about the cryptocurrency markets so that the investor can make decisions about buying, swapping, or staking (earning interest) crypto.
Buy – this option enables the investor to purchase Bitcoins or Ethereum coins with Australian dollars. They can also buy back Australian dollars using Bitcoins or Ethereum coins.
Swap – once the investor has acquired Ethereum coins they can swap them for ERC-20 based tokens.
Earn – investors can earn interest on their cryptocurrency by reserving a portion of their coins for staking. This means they keep their coins locked in a wallet without trading them so that miners can select these coins for producing new blocks on the Blockchain rather than mining new ones.
To complete any of these transactions the investor will need to connect a crypto wallet to their NCX account. This could be a hardware or software wallet. If a user does not have any Wallets, they will be able to create one from a list of recommended wallets.
Trading in cryptocurrency has Taxation implications that the user should consider when placing a transaction.
Enter the amount you want to invest in Australian dollars. The amount is always Australian dollars whether you are buying coins or buying dollars.
If you are buying coins select Australian Dollar as the ‘From’ currency and select either Ethereum or Bitcoins as the ‘To' currency.
Once you have entered an amount the estimated value in coins will be calculated. This is only an estimate and as the market is changing rapidly it may only apply for a short period.
The NCX fee for the transaction will be calculated in Australian Dollars as will the Network Fee which is paid to the miners who process the transaction on the Blockchain network.
The Total is the total cost of purchasing the coins in Australian dollars.
If you are happy with the total that you will be charged click the ‘Next’ button. On the next page you can enter your wallet address or click on the ‘Connect a Wallet’ button. Once connected you will be asked to confirm your request to buy.
If you confirm the request a payment portal will be displayed. Select your bank and click the 'Continue' button. Select the account you wish to transfer the money from then 'Confirm' to complete the transaction.
Buying Australian Dollars
If you are buying Australian dollars enter the amount you are buying in dollars and select the coin you are using to buy the dollars as the ‘From’ currency and the ‘To’ currency will default to Australian dollars.
The estimated value in Australian dollars will be calculated. This is only an estimate and as the market is changing rapidly it may only apply for a short period.
The NCX fee for the transaction will be calculated in coins as will the Network Fee which is paid to the miners who process the transaction on the Block chain network.
The Total is the total cost of purchasing the Australian dollars expressed in coins.
If you wish to proceed with the transaction click the ‘Next’ button. On the next page you will be asked to enter the details of the bank account that you want to receive the payment. You will then be asked to confirm the request. Click 'Confirm' to proceed with the deposit or 'Back' to return to the previous page.
The SWAP option allows you to swap Ethereum coins for ECR-20 tokens. A list of tokens is displayed showing the current price, the percentage change in price over the last 24 hours, 7 days and 30 days. You can select one of the tokens that you want to swap to. If you are not connected to your wallet you will not be able to proceed as you will need to know the balance and value of the tokens in your wallet.
Connect to the wallet by clicking the 'Connect' link, select your wallet from the list or create a wallet. Once you are connected the balance and value will be available for completing a swap.
Once you have selected the token you are swapping the quick trade page will appear. Enter the amount you wish to trade. The amount you have available to trade will be displayed if you click on the drop-down box in the sell section of the page. You can click the 'Max' link and the total balance available to swap will be used.
The estimated value of the tokens you can obtain using the amount entered will be displayed. This is only an estimate, as markets change constantly the actual amount may differ when the swap is completed.
Clicking on the ‘Review full quote’ button will display the full details of the swap including the token price, the transaction fee, and the balance available for transfer.
If this is a small swap the fees may be a considerable percentage of the transaction and you may decide to back out of the transaction.
If you want to earn passive returns from some of the tokens in your wallet you can stake those tokens by clicking on the 'Earn' option.
A list of tokens that can be staked are listed showing their anticipated earning percentage per year. If you picked a token to be staked and then select a number to be staked, then that number of tokens will be locked, and miners may select those tokens in order to create a new block on the blockchain. They will then receive a percentage of any transaction fees earned by the miners based on the number of tokens staked. These tokens can be used repeatedly providing a continuous source of income.
Staking reduces the number of new coins that have to be mined to build a block on the Block chain. The mining process is expensive due to the complexity of calculations required to produce the coins and the computing power required to perform these calculations. This results in higher transaction fees which are not proportional so that any gains made by trading a small number of tokens will be consumed by the transaction fees.
Staking provides a way of using existing coins reducing the costs of building a block on the Block chain, will reduce transaction fees and provide a source of income to investors.
For more information on staking click here.
Cryptocurrency wallets are software applications that work with various blockchain networks such as Bitcoin and Ethereum. Wallets provide a view to your crypto account balances and enable the transfer funds around the blockchain networks.
To complete these transfers the user is required to verify their address using a private key that is a set of unique codes assigned to the user.
The speed and security of the wallets vary depending on the wallet used.
There are different categories of wallets that will have different methods of storing keys and providing access to accounts depending on the cryptocurrency they are linked to.
These are usually hot wallets as they are often connected to the internet and provide easy access. There are different types of software that run on different platforms and include:
Desktop wallets – these wallets are installed on the user’s desktop computer or laptop. The wallet can only be accessed using the computer it is installed on ensuring privacy but could be subject to viruses inadvertently downloaded on the computer.
Mobile wallets – these wallets operate on mobile devices and are downloaded to a phone so that it is possible to use them anywhere including shopping in stores that accept payment in crypto.
Online wallets - these wallets operate on the cloud so can be accessed on any computer device at any location providing there is a stable internet connection. They are convenient to use but can be vulnerable to third-party attacks.
Offline wallets – some wallets can run offline on mobile devices with special programs that allow you to verify transactions offline turning the wallet into a cold wallet whilst it is offline.
Hardware wallets are cold wallets as they store user’s private keys and account details on a hardware device offline. They can be connected to a desktop computer or laptop to perform a crypto transaction and disconnected when the transaction is complete. They can interface with other applications that make the wallet easier to use.
They are the most secure wallets but are the most expensive.
These wallets use software to generate a user’s private keys and then print them. The user can then transfer funds to a desktop by typing in the generated keys or scan the code.
For more information on wallets click here.
Review of the most popular wallets
NCX has carried out a review of the most popular wallets including the cryptocurrency network they are linked to, the platform they run on and the useability of the wallet.
Click on the icon to download the review.
A capital gains tax (CGT) event occurs when you dispose of your cryptocurrency. A disposal can occur when you:
sell or gift cryptocurrency
trade or exchange cryptocurrency (including the disposal of one cryptocurrency for another cryptocurrency)
convert cryptocurrency to fiat currency (a currency established by government regulation or law), such as Australian dollars, or
use cryptocurrency to obtain goods or services.
If you make a capital gain on the disposal of cryptocurrency, some or all the gain may be taxed. Certain capital gains or losses from disposing of a cryptocurrency that is a personal use asset are disregarded.
If the disposal is part of a business you carry on, the profits you make on disposal will be assessable as ordinary income and not as a capital gain.
While a digital wallet can contain different types of cryptocurrencies, each cryptocurrency is a separate CGT asset.
You must keep records of each cryptocurrency transaction to work out whether you have a made a capital gain or loss from each CGT event.
For more information on the tax implications click here.