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Home / Bitcoin Guide / The beginner’s guide to Bitcoin in Nigeria: A Bitcoin FAQ

The beginner’s guide to Bitcoin in Nigeria: A Bitcoin FAQ

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The definitive guide to Bitcoin is finally here ! All your questions will hopefully be answered as we aim to introduce you to the currency of the future, Bitcoin.

What is Bitcoin?

Bitcoin is an electronic form of currency  and a payment system invented by Satoshi Nakamoto. Nakamoto unveiled the idea on 31 October 2008 to a cryptography mailing list, and released it as open-source software in 2009.

Bitcoin is decentralized peer-to-peer system, No single bank, government, company or individual owns the network or has control over it. This means that your accounts can never be frozen, a government cannot devalue the currency, it can be used in every country and because of the anonymous nature of Bitcoin. A Bitcoin wallet isn’t not tied to any your identity and a new one may be created at will.

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Mining – How Bitcoins are created

The Bitcoin was founded upon mathematical proof which stipulate that there can only ever be 21 million Bitcoins. Unlike other currencies, no more can be printed. New Bitcoins are released into circulation by rewarding miners for their work in using specialized computers in processing and verifying Bitcoin transactions.

What is the Price and how it it determine?

Like other currencies and commodities, the value of Bitcoin fluctuates wildly based on supply and demand and its perceived value. In October 2009, a first exchange rate was published, listing the value of 1,309 Bitcoins at $1. Bitcoins were cheap and throughout the following year they continued to trade for fractions of a cent. The first known transaction with Bitcoin occurred in 2010 when a Florida resident offered 10,000 Bitcoins to anyone who would order him a pizza. One user in London agreed, making a long-distance phone call to a Papa John’s and cementing the first Bitcoin transaction in history.
Bitcoin started getting popularity around 2013 and reached over $1,200.00 in November. At the time of this writing the value of a Bitcoin is $664.10. However, you don’t need a whole Bitcoin, Bitcoins can be broken down into smaller units, the smallest being one hundred millionth of a Bitcoin – called a Satoshi, after the anonymous founder of Bitcoin.

What can I use Bitcoin for?

Today’s financial system makes moving money around the world slow, costly and inconvenient due to frictiImage result for bitcoin remittanceon and capital controls. Bitcoins offers cheaper alternative to traditional money.

1. International Money Transfer and shopping : Bitcoin is redefining remittance, Africans pays the highest money transfer fees in the world to send and receive home abroad in addition to poorly calculated currency conversion rates. Because Bitcoin exists on the internet, which itself is global and borderless, you can simply exchange local currency to Bitcoin and transfer the Bitcoin to the recipient in other countries and they convert it back to their local currency in their country of residence. 

You can pay for goods and services online using Bitcoin a lot cheaper compared to things like credit cards or Paypal without having to worry about foreign exchange fees and security of your personal information. A lot of businesses are accepting Bitcoin at the checkout and provide customers with a Bitcoin payment gateway to make spending simple and fast.

 

2.Trading(Forex)/Investment: Bitcoin is the new store of value

African investors traditionally invested in foreign currencies and Gold with the current global economic turmoil due to the crude oil price, investors are looking into Bitcoin as a currency not affected by central bank policies and poltical agendas. Bitcoin performed better than stocks, commodities & bond yields and was the top performing currency Of 2015  by a whopping 35%.

Bitcoins offers new investment opportunities for Nigerians due to the Bitcoin volatility, the rate of Bitcoin tends to grow as the market fluctuates. For example, If you bought $100 at 220 Naira in Jan,2016 before the Naira devaluation you’ll have 33,000-35,000 Naira if you converts it back to Naira, the same $100 could have bought 0.4 BTC in January which is now worth $264.4 converted that to Naira at 335 that’s 88,574 NGN  compared to 33,000 Naira with USD.

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How To Use Bitcoin

1. Create a Bitcoin wallet (this is similar to a bank account to holds your money and functions like an email account except that instead of sending a message to an email address, you’re sending an amount of money to a Bitcoin address, such as: 1or96uGo5F7yGqETzpTmuJzvVq49eRBDi

Blockchain.info is the most popular Bitcoin wallet provider. They also have an app for iphone and android so you can take your wallet with you wherever you go.

2. Buy Bitcoins. You can either buy on an exchange or mine them yourself. When buying on an exchange, you would provide your Bitcoin address at the time of purchase and the Bitcoins will be transferred directly into your wallet.

NairaEx is the leading Bitcoin exchange for Bitcoin and Naira and have the best reputation for simplicity and best rates in the Nigeria. You can buy and sell Bitcoins anywhere in the world, Here is a link to exchanges.

3. Spend Bitcoins. More and more businesses are starting to accept Bitcoin. SpendBitcoins  & Spendabit has list of places that accept Bitcoin around the world.

  • You can save 15% Off Amazon with Bitcoin with  Purse.io
  • Buy Common Household Items using Bitcoin at  Overstock.com
  • Use Bitcoin to purchase gift cards from services like eGifter, or Gyft and then redeem them at Amazon, BestBuy, and hundreds of other popular retailers.
  • You can pay for a hotel with Expedia, book a flight with CheapAir, or take a cruise with Ships & Trips Travel.
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