The cryptocurrency market can be an incredibly confusing place, which is why you need to do your research before jumping in.
In this beginner’s guide, we will cover everything you need to know about investing in Bitcoin, from how the market works to how to buy Bitcoin and keep it safe.
So get ready to start investing in Bitcoin by learning how to invest in Bitcoin in Nigeria!
What is bitcoin?
Bitcoin is a digital currency (or crypto-currency) created in 2009 by an unknown person using the alias Satoshi Nakamoto.
Transactions are made with no middlemen – meaning no banks! There are no transaction fees and no need to give your real name.
More merchants are beginning to accept them: You can buy web hosting services, pizza or even manicures. Moreover, you can also send bitcoins to anyone via computer or smartphone without going through a bank intermediary.
One bitcoin is divisible to eight decimal places (100 millionths of one bitcoin), and this smallest unit is referred to as a Satoshi.
If necessary, and if the participating miners accept the change, Bitcoin could eventually be made divisible to even more decimal places.
What determines bitcoin’s price? Much like any other currency, it depends on how much people are willing to exchange it for. This is often dictated by how useful they find bitcoin at any given time — i.e., how many merchants accept it and how many transactions take place.
But since there is no central authority running Bitcoin, everything is based on supply and demand. When demand for bitcoins increases, so does its price; when demand falls, so does its price.
Bitcoins are traded 24 hours a day, 7 days a week, and 365 days a year.
How do I start?: First, you need to set up some sort of wallet to store your bitcoins in.
It doesn’t have to be anything complicated — just something that will hold onto some of your coins while you figure out which ones you want to hold long-term.
Then sign up for an account with one of the online exchanges where people buy and sell bitcoins using different currencies. One of such is SnappyExchange – a reliable, fast, and secure platform where you can buy and sell Bitcoin in Nigeria.
Who can invest in Bitcoin?
Despite its soaring popularity, bitcoin is a complicated and unusual type of currency that can be difficult to understand.
If you’re considering diving into cryptocurrencies, you should know that anyone can start investing in Bitcoin.
It doesn’t matter if you have millions of dollars or a struggling bank account; anyone with an internet connection and enough motivation can invest in Bitcoin.
As long as you can afford to take some risks, there are plenty of ways for you to get involved in Bitcoin investments.
Here are just a few ideas on how to get started
- Buy bitcoins directly from another person:
You can buy bitcoins directly from other people using online marketplaces like LocalBitcoins, Paxful, Coinmama or Coinbase.
This method is similar to buying things from eBay—but instead of bidding on items like a house plant or video game console, you’re bidding on bitcoins.
Once your purchase has been made, the seller will transfer your coins directly to your wallet via their preferred payment method (usually ACH).
- Use bitcoin exchanges to trade for bitcoins:
There are many different exchanges where you can use your fiat money (USD, EUR) to buy or sell bitcoins. Popular exchanges include Bitstamp, Coinbase/GDAX, Gemini and Kraken. When you use these sites to exchange fiat money for bitcoins, it’s imperative that you set up two-factor authentication on all accounts before depositing any funds.
Two-factor authentication means that when you log in to your account, you’ll need to enter a code sent to your phone number before gaining access.
- Earn Bitcoins Through Competitive Mining:
One way to earn bitcoins is by mining them yourself.
Mining involves setting up specialized software so that you can solve math problems and earn rewards in return for verifying transactions on the blockchain network.
Should I start investing in bitcoin?
It’s hard to say for sure, but if you’re interested in investing in bitcoin and have a decent budget, it might be worth considering.
Be sure to do your homework first, though! I recommend you read this guide on investing in cryptocurrency (it covers everything from beginner-friendly platforms to cold storage).
And as always, don’t invest more than you can afford to lose.
If you want to learn more about bitcoin and cryptocurrencies, check out our resources page where we list several helpful links.
Is bitcoin a good investment? Like any other currency or commodity, bitcoins are only worth something because people think they are.
Whether or not they will actually turn out to be valuable is an entirely different matter that is impossible to predict accurately.
With that said, there are some interesting use cases for them in today’s world. There are also many ways to get free bitcoins, which is nice.
Where do I invest in bitcoin?
There are a number of different places where you can buy bitcoin in Nigeria, with Luno and Nairaswitch being among some of the more popular services.
We’ve listed some of these exchanges below. Just click on one of them to be taken directly to their site where you can purchase bitcoin.
There are also other exchanges popping up in different parts of Africa so we will add links for them as they become available.
Some are mobile-only, so you’ll need an Android or iOS device to access them.
The price of bitcoin changes daily, and there is no way to predict what it will do next. However, there are a few things that you can do to make sure your investment goes well:
Get started with small amounts: When investing in any currency, it’s best not to invest too much money at once. If something goes wrong, it won’t hurt too much, but if things go right, you’ll feel like celebrating! So don’t put all your eggs in one basket.
Buy bitcoins regularly: It might be tempting to wait until you have enough money saved up before buying bitcoin, but it’s better to start smaller and add to your investments over time.
This way, you can buy low (when prices are down) and sell high (when prices are high). Use limit orders: Limit orders allow you to set a maximum price you want to pay for bitcoin.
How Does Bitcoin Work?
Bitcoin is a digital currency used to transact online. However, it is not printed and doesn’t exist in any physical form.
It is entirely run off of peer-to-peer networking, so every transaction using bitcoin needs two participants (or nodes).
One of these participants will be someone willing to pay for a product or service with bitcoin, and one will be willing to accept it as payment.
When you use bitcoin to buy something, you are sending an encrypted message from your computer telling other computers on the network how much value you want to transfer.
This message is sent along a chain of computers until it reaches its destination—typically another computer owned by whoever accepts bitcoins as payment.
Once there, they unlock your message and send their own back confirming they have received your funds. These transactions are logged on what is known as a blockchain—essentially an electronic ledger which keeps track of all transactions made using bitcoins.
There are many different blockchains, but they all operate under similar principles.
While anyone can access information about transactions made using bitcoin, only those who know a specific user’s private key can actually make changes to their account.
Private keys are long strings of numbers and letters that act as passwords for users; if someone else has your private key, they can change your balance without permission.
What Do You Need to Invest in Bitcoin?
Before you can begin investing in Bitcoin, there are a few things that you will need to get started.
These include a wallet to store your Bitcoins and an exchange platform where you can buy, sell and trade your Bitcoins for other currencies such as Nigerian Nairas.
For example, Coinbase is one of the most popular exchanges used by investors who want to purchase Bitcoin in Nigeria.
It’s also free to set up an account with Coinbase, and it only takes minutes before you have access to make your first purchase of Bitcoin.
This is a great way to purchase small amounts of Bitcoin using cash or bank transfers.
There are many different options available when buying Bitcoins, so be sure to research and choose what works best for you! Once you have your wallet and exchange ready, all that’s left to do is start trading! Keep in mind that prices fluctuate quite often on these platforms.
How to Invest in Bitcoin in 5 Steps
- Open a free account with an Exchange platform.
- Open a free digital wallet
- Transfer money to your new Coinbase wallet
- Find an investment opportunity
- Make an investment and profit!
Join a Bitcoin Exchange
At a minimum, a good cryptocurrency exchange should offer quick order execution, broad pricing information, and a variety of payment methods.
Look for exchanges that provide these features to ensure you can complete your transactions as quickly and conveniently as possible.
You’ll also want to ensure that any exchange you use has adequate security measures to protect your assets against theft and hacking.
If you are using an exchange with another person or company, keep in mind that they may not have sufficient technical expertise to handle your needs.
For example, if you need help transferring money from one account to another or setting up additional layers of security on your account due to high-profile hacks at other companies, be sure that whoever is helping you will actually be able to do so before signing up with them.
Get a Bitcoin Wallet
Every day, new merchants are starting to accept bitcoin for payment.
This is exciting because bitcoin transactions tend to be more secure and less expensive than traditional payment methods like credit cards. If you haven’t already jumped on board, start by getting a bitcoin wallet so you can begin accepting payments.
Once you have a wallet set up, create your first transaction in minutes with most wallets.
Connect Your Wallet to a Bank Account
If you’re a U.S. citizen, one of your easiest options for buying and selling cryptocurrency is through a digital asset exchange like Coinbase or Gemini, which by law must collect information about your identity and location.
Each time you buy or sell $150 worth of bitcoin or more (for Coinbase), you’ll be asked to verify your account with a driver’s license or passport on file.
You can also visit Coin ATM Radar to find coin-to-coin exchanges in your area. Enter your zip code and choose a currency pair from the dropdown menu to see all exchanges offering that particular trading pair.
For example, if you live in Los Angeles and want to trade between bitcoins and ethers, select BTC/ETH from the dropdown menu. Then click Find ATMs at the bottom right corner of the screen.
This will show all available machines near you willing to trade between BTC/ETH!
Is Bitcoin a Good Investment?
Cryptocurrencies are complicated and volatile.
There are all kinds of potential pitfalls and risks that you should be aware of before you start making money with digital currency.
They’re generally safer than other investments, but they’re not necessarily safe enough to use as a savings account if that’s what you’re looking for.
And unlike traditional currencies like dollars or euros, no government or central bank is standing behind them.
If something goes wrong, you could lose your investment instantly—and it might be impossible to get back out again.
So if you want to invest in cryptocurrencies—or anything else—it pays to learn about those investments first. (See also: What Is Bitcoin?)
The Cons of Bitcoin Investing
While bitcoin is gaining much momentum in West Africa, it’s still very volatile.
Its price changes every day, and while you can sell it once it increases, there are no guarantees that tomorrow it will be worth what you sold it for today.
So if you invest in bitcoin (especially if you invest large amounts of money), expect to lose some or all of your investment; only use money you aren’t afraid to lose.
Another issue with investing in bitcoin is transaction fees.
The Pros of Bitcoin Investing
You can invest in it with a small amount. You don’t need to pay anything to start. Your capital is at risk while you invest, but there are very high chances of huge returns within a concise period.
All you need is access to an online broker and bitcoin wallets.
Once set up, your funds can be automatically invested into bitcoin futures based on their market value every hour, no strings attached!
Also, because bitcoin trading happens 24/7, you can choose to have your investments work for you whenever convenient for you. There is no limit on how much money you can make from investing in bitcoins.
It has seen many people become millionaires in just months. It is a great way to diversify your portfolio since it correlates poorly with other asset classes like stocks or bonds.
You can also earn passive income by holding onto your investment over time.
Why is the bitcoin price rising so quickly?
Bitcoin is in a very interesting and exciting time right now. It’s hitting all-time highs, it’s being accepted into mainstream financial services like Microsoft, and more companies are working with it to create blockchain applications daily.
As a result of all these factors, there’s a huge amount of new attention on cryptocurrency—and much of that comes from people who are just hearing about bitcoin for the first time, who have never had an interest in cryptocurrency before.
This creates a lot of demand, which drives up prices and leads to speculation.
This is what we saw happen in late 2013/early 2014 when bitcoin went from $100 per coin to over $1,000 per coin over a few months (it has since settled down at around $400).
If you want to invest in bitcoin or other cryptocurrencies today, here’s how I would do it.
The easiest way to get started investing in bitcoin is through Coinbase. Coinbase is a digital asset exchange company headquartered in San Francisco, California.
Which wallets should I use to store my bitcoins?
One of bitcoin’s greatest strengths is its decentralized nature. Because no one entity controls bitcoin, there’s less of a risk that your bitcoins will go missing if something bad happens to a specific company.
It’s also worth noting that bitcoin wallets are not insured by the FDIC, unlike bank accounts.
So if you lose your bitcoins due to fraud or theft, there’s no simple way to get them back.
If you do decide to store your bitcoins locally on your computer or phone, make sure you backup your wallet and encrypt it with a strong password so that it can’t be hacked into pieces and stolen from you.
Tips For Investing In Bitcoin
If you’re trying to decide whether to invest in bitcoin, consider these factors first. There are several advantages to using bitcoins instead of regular mon.
For example, bitcoins can be divided into millions of smaller subunits (called satoshis), which makes it more convenient for banks and businesses.
However, with many advantages come disadvantages. It is still unclear how governments will regulate digital currencies, so investing in them might entail some risk.
Also, bitcoins transactions aren’t as private as those that use cash or credit cards because they’re publicly recorded on a ledger called a blockchain.
Finally, unlike traditional currencies such as dollars or euros, bitcoins aren’t issued by a central bank; instead, they’re created through a computer process known as mining.
This process involves solving complex math problems and creating an exchange of new bitcoins.
As a result, mining has become very competitive, and today, only specialized computers solve these problems at any reasonable speed.
This raises questions about security—if someone gains control of your computer resources, they could steal your coins—and price stability—since there’s no central authority setting prices, there’s nothing to stop supply from outstripping demand.
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