According to Merriam Webster “Cryptocurrency is any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions”.
In a layman’s understanding, Cryptocurrencies are simply digital currencies; Bitcoin is the most popular Cryptocurrency in Nigeria followed by others like Litecoin, Ethereum etc. Investing in bitcoin may be confusing for newbies, but it is really profitable.
Over the years the values for Bitcoin and Ethereum which are the hottest cryptocurrencies have risen and as thus many are engaging in it. There are things you need to know if you want to invest in Cryptocurrencies like Bitcoin and Ethereum, using these as case study.
The price of these Cryptocurrencies are not really stable, they fluctuate. The higher the demand for it, the higher its price and exchange value, the lower the demand, the lower its price and exchange value.
To start investing in Cryptocurrency you need a digital wallet, just like an online bank where you store your money, which in this case may be Bitcoin, Ethereum or others. There are many company sites that offer this service, Bitfinex is the most popular globally, but there are others like Blockchain, Coinbase, Binance, Huboi etc. You can see them as a market place where you can buy, sell and also store your Bitcoins. Take your time to find one that is trust worthy (Blockchain is my best option for Nigerians).
I would advise you choose to invest in Bitcoin because it is the most popular in Nigeria and thus you can easily trade with it. Create an account with any of the digital wallet companies you want and you are set to roll.
Afterwards, verify your identity on the site which is necessary to avoid fraudulent actions, you have to fund your account, it is either you transfer money directly from your bank and have the Bitcoin equivalent deposited in your wallet or you buy the Bitcoins from other user whom you can negotiate with and they may sell at a favourable price to you. You can buy at any time, but it’s advisable to buy when the price is a bit stable, not when it is falling and is very low and not when it is at a high peak.
After buying your first bitcoin, there are different ways to invest in it. There is the fixed method (Similar to a Bank fixed deposit). All you have to do is to leave the Bitcoin in your wallet for a number of years and sell it a higher rate when the value really appreciates. For example, you bought 1 BTC (Bitcoin) for about N3,000,000 and waited for 2 years, since the price and value of Bitcoin rises and falls, by the end of the 2 years there is a possibility that the same 1 BTC you bought for N1,000,000 may have risen to maybe N2,000,000 or N2,500,000. You can now sell you bitcoin at this point and make huge profit.
Another method is the Bitcoin mining, think of it as a game where you get rewards when you win, the reward in this case is the Bitcoin and you don’t play games, you solve problems instead. To go about this you just need to visit Bitcoin mining sites or install some Bitcoin mining software on your PC, there are many like CGminer. BFGminer BitMinter etc do some practice, watch tutorials if necessary and start mining.
You can also choose to go into direct buying and selling of Bitcoins, In this case you buy a BTC and watch the exchange rate, once it rises you sell off your Bitcoin at a higher rate than what you purchased earlier, you make your gain and wait till the rate reduces again (Maybe matter of weeks or months), you then repeat the process.
This is the one of the most common method used in Nigeria and it is really profitable if you follow it up well.
People prefer Cryptocurrencies because they control them at their own pace, its flow is not controlled by any Government agency and many see it a future replacement for paper money. It will be resourceful if you invest in them today.