Cryptocurrency is money, real money just like Naira. So, you can invest in it or work for it. It is digital currency in which encryption technique used to regulate the generation of units of currency and verify the transfer of funds. It operates independently of a central bank. It is secure of political influences. Nigerians are now slowly accepting bitcoin and other cryptocurrencies. However, before you join this cryptocurrency investment train, I will like you to know these 5 things.
5 things you need to know before investing in cryptocurrency
There are quite a number of things you needed to know before jumping into cryptocurrency investment.
1. The most popular cryptocurrency now in Nigeria are Bitcoin, Ethereum, Litecoin and Electroneum. Bitcoin price is fairly stable but surges. Holding value is a key factor when choosing whether to invest or hold bitcoin as when compare it to the naira. Bitcoin is much stable with a solid exchange rate so long term holders are unlikely to see crash in value while naira users are particular susceptible to political movement and commodity problem. However, for short term investors bitcoin is particular beneficial as with a number of exchanges. You can buy cheaply and sell at profit within a matter of minutes.
2. Bitcoin and crypto currency market is highly volatile. It is still growing and there are number of factors that influence it. The price rise and fall back. It is dependent on the market forces of demand and supply. The more people are willing to buy bitcoin, the more the value increases. On the other hand, if more people sell, the value will decline. It is therefore necessary to note that buying crypto currency should not be perceived as an investment but rather as a speculation. This is because you have to be will to lose the money you invest in buying it.
3. Many people have started using cryptocurrency like bitcoin, despite the fact that some Nigerians are yet to accept it. You can pay with it online some online retailers and vendors have started transacting with it. So, that’s good for investors. Companies like web4africa, Expedia, Microsoft, subway, Neways, TigerDirect, PayPal and so on now accepts bitcoins.
4. Some digital currency wallet holders’ sites are often down and sometimes shut down completely due to high traffic on surge hours. According to Reuters, yesterday bitcoin raced to another high price, one of the biggest providers of digital currency wallet , Coinbase went down under the weight of traffic, leaving many of its more than 10 million customers unable to access their fund. At the same time, Bitfinex the world’s biggest bitcoin exchange by trading volume, said it was under a heavy denial of service (Dos) attack, meaning its servers had been intentionally flooded with junk online request s, taking down its website and crippling its service. The latest outages show how the market infrastructure for a immature and volatile instrument that millions of investors have piled into may be ill-equipped to cope with sudden shift in demand which is worrying some investors. During a particular volatile period of trading on December 7, bitcoin surged from below $16,000 to $19,000 in less than an hour on Coinbase exchange GDAX while it was changing hands at less than $16,000 on another Bistamp.
5. Cryptocurrency provide a level of anonymity. Transactions in them cannot be faked or reversed and there tend to be low fees, making it more reliable than conventional currency. Confirmation is critical concept in crypto currency. As long as a transaction is unconfirmed, it is pending and can be forged. Whenever, it is confirm, it cannot be reversed. Blockchain is good at this.
Now, you know all these check out our article how to invest in Bitcoin, Ethereum or any other cryptocurrencies in Nigeria – Complete Guide