We are in an era where financial transactions online are a norm and there are now easier ways to transact with people and also transfer funds to anyone, wherever they may be in the world. The 21st century has become notable in history for numerous and timely inventions and one of such invention is the economic tool known as cryptocurrency.
The first and most known cryptocurrency is Bitcoin also known as BTC. But what exactly is a Bitcoin?
How can you make money with Bitcoin in Nigeria?
And what are the risks?
In the article, I’ll provide the most complete guide to know how this virtual currency works and how to make money trading bitcoin in Nigeria.
What Is Bitcoin?
Bitcoin is the most famous virtual currency which uses cryptography to secure transactions, within its infrastructure, which represents a fully decentralized database of all transactions with this cryptocurrency that has been executed, which is called Blockchain.
Basically, cryptocurrency is a digital information exchange that allows the user to be able to buy or sell goods and services. It is secure and trusted as it runs on a peer-to-peer (P2P) network, which is similar to BitTorrent.
The difference between this currency and other currencies is that unlike naira or dollars, it does not belong to anyone, or to any Country.
It is simply a decentralized currency without any central bank or institution that can impose control. In addition, the money belongs to you completely, there is no middle man and your accounts cannot be frozen.
Bitcoin: Advantages and Disadvantages
When you don’t know something well or you are interested in it so much to jump into it, you always ask yourself the same question: what are the advantages and disadvantages? We will start with the positive. The advantages of Bitcoin are many, such as:
Freedom to pay: It works 24 hours a day and you have the ability to send and receive the amount you want and practically instantly to anywhere on the planet without any limit. Only you can set the controls on your account. Furthermore, it has low costs on transactions which makes it a perfect currency to carry out these day-to-day micro-payments.
Transparency: Transparency is one of the most important elements for trust and precisely, this trust causes Bitcoin to be on the rise. The main reason is that each user can verify all the information, which is shared between the user and the receiver, without any kind of cheating, since everything is stored in the Blockchain and can be used when required. But most importantly, no one or any entity can manipulate this Blockchain.
Security: Bitcoin users have complete control over their transactions. Payments using Bitcoin can be made without being associated with your personal information. This offers a high level of protection against, for example, identity theft. And if you want to be more sure, Bitcoin users can protect their money by making backup copies. When you make transactions with Bitcoins it does not hold any of your personal data. It protects merchants from any type of theft or fraud.
What are the disadvantages of Bitcoin?
Volatility: Since its inception it has had large price increases, making Bitcoin a rather attractive currency for speculation. Over time, it is normal for this variation to decrease and its price to be more stable, although you never can tell.
Guarantee of acceptance: Many people still do not know what Bitcoin is, and although there are more and more establishments that accept it, for now they are a minority.
Without a regulator and anonymous: The fact that there is no support like governments and banks behind it may be a disadvantage for many, as users and customers themselves would feel more comfortable with the support of a regulator. In addition, the fact of being anonymous, for many, is a disadvantage because there is always the fear of it being used illegally to protect a trail of crime.
How to make money with Bitcoin in Nigeria
More and more people have decided to invest in cryptocurrencies and Bitcoin has the first position amongst other cryptocurrencies on their list. And while it looks like a far dream for Nigerians, there are ways for us to make money with bitcoin here in Nigeria. Here I’ll list some major ways for you to make money with bitcoins in Nigeria.
Traditionally, a country and its governments are in charge of printing the currencies in use. In the case of Bitcoin, however, it is done through “mining”.
In mining, the “miners” are in charge of the quite complex, time-consuming processes and the speed of securing the network and collecting the Bitcoins.
They also dedicate their time (although sometimes there are bots that do this work) to check bit-by-bit the operations that are performed as this is a system without central control. Their work, as indicated, is crucial in the world of Bitcoins since they have to certify that no user uses Bitcoin more than once, nor that false cryptocurrency is introduced.
In addition, they must keep all the accounts listed in what would be like an accounting book, to make sure of the balance that users have.
What do I need to start mining Bitcoins?
Anyone can be a miner as long as they use suitable software and hardware or can resort to other methods. Mining is a very competitive task. In fact, miners cannot control what is included in the Blockchain. It is quite complex since to confirm the new transactions with Bitcoins, a mathematical proof of work is needed that must be included in each of those blocks of the Blockchain.
On their own, those tests are very difficult since calculations and more calculations per second must be performed to pass them. Whenever it is openly declared that something almost impossible task, there the computer equipment enters.
Although not all miners are legit, the network will always remain secure. And there is no trap, Bitcoin miners cannot cheat by increasing their own loot or defraud since all Bitcoin nodes would reject those blocks because the data will not be valid, as specified by the rules of the Bitcoin protocol.
There are quite a number of advantages of cloud mining, such as, you do not need to have physical equipments at home and it does not consume electricity. In addition, there is no need to worry about updating the equipment or having technical knowledge.
How long does it take to mine?
It is a complex question and it doesn’t have a clear answer because everything depends on the system you use and the power. For example, the profitability of cloud mining and the answer to how long it takes to mine 1 Bitcoin depends on the price of the cloud service, the complexity of the virtual currency, the purchase period and other factors.
The good thing nowadays is that there are machines that offer you statistics and give you an idea of the time it can take to extract a Bitcoin to assess whether to opt for one extraction method or another, in addition to knowing the profitability and the probability of success.
Invest: Buy cheap and wait for a rise in the value of Bitcoin
Patience adds to confidence. If you have these two elements, you can become proud of BTC. Investing is an option to make money with a long-term perspective all the while forgetting how the currency fluctuates. You buy bitcoin cheaply leave it in your wallet and wait patiently on the strong appreciation of the cryptocurrency coin whether long or short term.
In fact, there is a very popular strategy for that. It’s called HODL, an acronym for “Hold on for Dear Life.” This is one of the best trading strategies, as you will get (in most cases) long-term benefit from keeping the currency and more today due to the increasing acceptance of cryptocurrencies. It is not complex at all.
It is as simple as buying and holding money independently and ignoring how the market fluctuates in the short and medium-term, in order to maintain investment.
Of course, you have to be careful, because, the same thing that can increase your profit than be divided by the possible collapses of virtual currency in the market.
Trading with Bitcoin
How to make money trading bitcoin in Nigeria, has been a long term question amongst Nigerians. Though trading with Bitcoin requires basic knowledge, you can deal with it in short term because in this case you buy and sell bitcoins in minutes.
It is not about investing, you buy the coin low and sell it high while taking advantage of the fluctuation. In the short term, the key element is the speed with which you buy and sell the coin, as it can make a big difference in such short term.
There are numerous trading platforms, such as Binance, which is number 1 in market capitalization, according to the Coin Market Cap volume ranking. Another one that is in the same ranking is OKEX, which allows you to exchange other cryptocurrencies aside from Bitcoin, including some that have just been listed.
Beyond the short term, however, you can trade long term, in this instance, you follow the market trend. You buy low at the right time and you keep the asset after having previously analyzed the upward trend in the market. Obviously, the risk is always that it can plummet, so it is advisable that you should have already studied and are following the trend line from the analysis of the previous months.
There are bots that can carry out the operations mentioned above for you. With bots, you can automate the purchase and sale of BTC. The bots use complex algorithms and mechanisms for all the markets where trading of BTC and other cryptocurrencies are ongoing and analyze the signals.
Simultaneously, it makes decisions for you with the aim of obtaining the upper hands and most importantly profits.
Finally, to make money online with bitcoin in Nigeria, invest in studying and understanding how Bitcoin works as much as you can.
You can also read my other article here on 9 profitable businesses you can run from your smartphone here -> (Source: The Graduateboss.com)