Our world is ever-evolving. Faster than the twinkle of an eye.
Centuries back, the medium of exchange and materials used to measure a man’s wealth were sheep, goats, oxen, etc. Then metals such as gold and silver replaced these media of exchange.
Thereafter, we began the use of paper money, cheques, and others as there are easier to carry around.
Today, we have virtual money known as digital currencies and billions of people across the globe have accepted and are now trading with it.
One of these is known as the bitcoin.
In this post, you are going to learn how to trade bitcoin. But before we talk about trading bitcoin in Nigeria, let’s looks at what bitcoin is and how it operates.
What is Bitcoin?
Bitcoin is a cryptocurrency used as a means of payment. A cryptocurrency is a digital currency that is completely decentralized from any form of government or bank control.
In other words, it is a global tender that is used for transactions without the government or bank’s influence and authorization.
It is the first cryptocurrency that was completely decentralized without banking or government control and is the most popular cryptocurrency in the world.
It was birthed by Satoshi Nakamoto on the 31st of October, 2008 and released as open-source software in 2009.
Over the years, bitcoin has gained more popularity in Nigeria as a result of its immunity to inflation.
Trading of bitcoin in Nigeria is getting very popular although bitcoin lacks popularity within the mainstream media and the government of Nigeria.
The currency is one of the digital assets you seek to own in this age of advancement in Information Technology because of its ease of use, speed of transaction and very low transaction fees.
Bitcoin exists on a technology called blockchain which helps to store all the information and transactions about all the bitcoin that ever exist.
The information on the blockchain can never be destroyed or manipulated, neither can it be controlled by one central body or government. Thus, making bitcoin the best form of money in existence.
Aside from bitcoin, they are over one thousand five hundred cryptocurrencies in the market as at 1st of February, 2018.
How to Trade Bitcoin in Nigeria
Bitcoin trading is a business transaction carried out using bitcoin as a form of exchange. This is when you buy and sell bitcoins to earn a profit. It is, however, important to note that bitcoin fluctuates daily; it has no definite exchange rate.
Before you can trade bitcoin in Nigeria, the first thing you will need is to get a bitcoin wallet where you can receive, save and send your bitcoin anytime, anywhere with no restrictions whatsoever.
Your bitcoin wallet address, which is like your bank account number, is a mixture of letters and numbers i.e. 1CNaaK7CKuB6oDeYdx8fiJuc1fq5SMANvn.
There are several wallets that you can use to store your bitcoin. But it is usually advisable you get a wallet that will enable you buy bitcoin with Naira and also change your BTC to naira easily.
These available wallets include (but not limited to) Paxful, Local bitcoin, Luno, Blockchain, etc.
With proper market analysis, you can trade based on the direction of the crypto market in other to make a profit.
Bitcoin trading is the most common way to make money online in Nigeria. Bitcoin is very volatile when traded against the dollar, its rate can rise and fall several times each day hence, making it more profitable to trade than all the physical legal tenders.
For day trading, open trading accounts with any of the major foreign bitcoin exchanges and load it with bitcoin funds by exchanging Naira to BTC and vice versa. This allows you to trade bitcoin directly with other fiat currencies such as USD, EURO, GBP.
What You Should Know About Bitcoin Exchange in Nigeria
Bitcoin Exchange are platforms where you can sign up, buy, sell and convert bitcoin to naira or naira to bitcoin. These bitcoin exchanges are becoming increasingly popular in Nigeria.
Below a few that credible Bitcoin Exchange in Nigeria and I believe are easy to use, even for a newbie.
- Instant Gold Nigeria
- Ngexchanger Nigeria
In the sites listed above, you can buy bitcoin with Naira via bank transfer and Visa/MasterCard.
As at the day of publication of this post, 1 bitcoin is N3,802,788.
You don’t, however, need N3.8m to buy bitcoin. On Luno, for example, you can buy BTC for as low as N200; which amounts to 0.000053btc. You can convert naira to bitcoin and store in your wallet until it rises and then sell them off.
Luno is a very popular exchange amongst Nigerians because of its simplicity and ease of use. Deposit fees and withdrawal fees vary by payment method. Bank transfer is often N200 when you convert bitcoin to naira.
Luno offers an instant BUY feature on its site and app when you link your Visa or Master card issued to you by any Nigerian bank.
Luno requires verification to deposit or withdraw BTC from the platform. Luno has different levels which come with different limits and requirements.
Level 1 only requires confirmation of a mobile number and some basic personal information. It has a withdrawal/deposit limit of EUR1,000 which is equivalent to N405,280. In other to increase your limit, you will need to attain level 3 by submitting a government-issued ID, proof of address. This will increase your monthly limit to EUR100,000 which is the equivalent of N40,528,080 right now.
What You Should Know Before Starting Bitcoin Investments
Bitcoin is a gold mine for Nigerians who are willing to invest in cryptocurrency. This is because of the behaviour of Nigeria currency in the foreign exchange market.
There can only be 21 million bitcoins that can be mined in the lifetime of the existence of BTC. This makes it limited and finite. Of the 21 million, 17 million is currently in circulation already as miners continue to mine what’s left of BTC.
In 2016, 1 BTC was worth N220,000. In 2017 the equivalent for 1 BTC was N1,078,550. In January 2018, 1 BTC was worth over N5,094,831 and July of 2019, 1 BTC is worth N3,805,848.
So, the potential for BTC investment is limitless. Combined with the altcoins that come into existence every single day, the crypto market is surely an investment area to look into.
What is Bitcoin Mining?
In the early days, you could mine bitcoin from your laptop but these days, the mathematical equations have gotten more complex.
It now requires special software and bitcoin mining hardware that is built specifically for the task.
This requires good savings in other to venture into bitcoin mining in Nigeria. What you do here is to solve very difficult mathematical problems. These complex solutions serve as a firewall for bitcoin transactions. For solving one problem, you get rewarded with bitcoins.
Some of the best bitcoin mining hardware is Antiminer S9 and Dragonmint 16T miner.
If you do not have enough money to buy this mining equipment, you can join in pool mining. A mining pool is basically when two or more miners work together on a single network in other to find a block.
Using Bitcoin for International Money Transfer
Nigerians living abroad and those doing business across the border can save a lot of money. Other means of sending money abroad such as western union and the likes have high transfer charges.
By sending money directly in bitcoin, this saves time and reduce over 10% fees charged by banks and Money Transfer Operators.
Bitcoin exchanges are available anywhere in the world. Even in Nigeria. Thus, allowing users to convert Nigeria currency to bitcoin and vice versa.
With the boom and increase popularity of bitcoin in Nigeria, more and more people are getting into the world of cryptocurrency trading.
There are advantages and disadvantages of trading bitcoin as there are in every traded commodity. So, before you use your naira to start trading crypto, you should know what it is you are getting into.
Advantages of Trading Bitcoin in Nigeria
- Open Source Software: Transparency of information is always a key priority when it comes to financial dealings. With open-source software information is collaboratively produced, published and shared freely, so it is available to for the public eyes. Transactions on the ledger are available for the public to see but personal information is hidden from the public only your wallet address is visible.
- Control and Security: Users have control over their transactions which enables bitcoin to be safely stored in your digital wallet. Control and security is a priority when handling any type of financial dealings.
Disadvantages of Trading Bitcoin in Nigeria
- Risk and Volatility: These are one of the biggest disadvantages of bitcoin. Experts say that “volatility” is an advantage and disadvantage of trading bitcoin. That alone scares many Nigerians away from investing in bitcoin. The volatility is because there is a finite supply of bitcoins (21 million bitcoins and at least 80% of that 21 million is already in circulation). The price of bitcoin is on a roller coaster every single day as a result of current events that surround digital currencies.
- Bitcoin is Underdeveloped: Another reason Nigerians often feel reluctant about investing in bitcoin is that it is still in its infancy stage. There are features that still further needs to be developed. Features like making the currency more secure, accessible and stable in terms of price.
Coupled with the fact that bitcoin is still in its infancy stage, this is the time Nigerians should trade bitcoin to open opportunities to adopt it as a payment method to counteract the issues of naira fluctuation and bank fees.