Five Things You Didn’t Know About Bitcoin, Other Cryptocurrencies

Cryptocurrency
Cryptocurrency

The words; “Bitcoin and cryptocurrency” are currently on everyone’s lips. If you’re watching this then you probably want to know what the whole fuss is all about.

Well, trading of cryptocurrencies in Nigeria, Africa’s largest economy, has been outlawed.

On the 5th of February 2021, the Central Bank Of Nigeria released a statement, barring all the financial institutions in the country from trading cryptocurrencies.

The Central Bank of Nigeria has ordered banks in the country to close bank accounts of people dealing in cryptocurrency, adding that failure to adhere to the directive will attract severe regulatory sanctions.

Incase this is all new to you, here are six things you should know about cryptocurrency:

1. Cryptocurrency is a digital or virtual currency that can be used to buy or sell various goods and services. It is an alternative form of money.

However, this form of currency can only be used in the online sphere as it comes in the form of tokens or coins. Although, traditional businesses would most likely not accept it as a payment method. People still invest in this form of currency for a number of reasons.

2. According to CoinMarketCap.com, a market research website, over 6,700 different cryptocurrencies are traded publicly. Examples of these digital currencies include; Ethereum, Ripple, Bitcoin, Chainlink among others. Another cryptocurrency can also spring up from nowhere. You never can tell.

Bitcoin is the most popular form of cryptocurrency and it was created in January 2009 by a mysterious entity, identified as Satoshi Nakamoto- although they also devised blockchain technology. One Bitcoin costs over N15 million as at the time of filing this report.

3. You can lose all the money in your wallet if you misplace your crypto keys. It is advisable for one to keep a copy of the address in a safe place.

It is better to be safe than to be sorry.

4. Cryptocurrency is illegal in Nigeria, China, Bolivia, Nepal, Bangladesh, Ecuador, Morocco, and Iran. However, reports claim that digital currencies can only be regulated and not banned as anyone with an internet connection and Bitcoin wallet can still conduct business transactions using Bitcoin.

5. The value of Cryptocurrency is very unpredictable, according to Express Computer. It is wiser to invest lightly because there are also ups and downs.

It is quite similar to share market where one is exposed to external factors that affect the value of the digital currencies. Your investment is relatively unprotected with very little security. Cryptocurrency has no true unit of measurement, or store of value. Investors are advised to be careful.

6. To buy cryptocurrencies, you’ll need a “wallet,” which is an online app that stores your currency. It holds your private key, a secret number that gives you access to your funds. You also have to create an account on an exchange, so you can transfer real money to buy cryptocurrencies such as Bitcoin or Ethereum. The exchange will convert your local currency into cryptocurrency.

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