Introduction
Nigeria is one country in South Africa that is drawing significantly more attention for cryptocurrencies than anywhere else right now. Being the biggest economy in South Africa, new services are being propped up to satisfy the demand for Nigerians to purchase cryptocurrency.
Cryptocurrencies such as Bitcoin and Ethereum can be used by investors to act as payments for goods and services. Payments using cryptos are very secure and are not easily closed down by governments. Transactions using Bitcoins are secure and transparent due to the fact that all details of the transactions are made public.
To the public, the majority of them will use cryptocurrencies as a means of sending money around the world cheaply and secure their transactions, due to the rise of e-transfer options and the world’s economy slowly turning into a virtual base with a potential from cryptocurrencies.
The character of Bitcoin and other cryptocurrencies are the decentralized element as in order to buy and sell Bitcoins, it means that you are recording your transactions in the world and it will be stored on the blockchain which is a public ledger that is found on all computers in the world.
Now that you have understood the basic elements of what cryptocurrencies such as Bitcoin Ethereum are, the first step would be to select a cryptocurrency exchange in which to trade your cryptocurrencies in the country.
Select A Cryptocurrency Exchange
Before we dive into buying your Bitcoin, you must know that there are hundreds of the crypto exchange platforms to select from in South Africa, they are usually split into three main categories.
Bitcoin Brokers
Bitcoin Brokers offer the easiest way to your crypto trading needs by allowing you to sign up immediately and start purchasing Bitcoins in Nigeria using fiat currencies through traditional methods such as making transfers through your bank account, debit card or credit card. Disadvantages of using brokers are their premium fees due to services rendered. As such, you can opt for another option if fees are too high.
Cryptocurrency trading platforms
Cryptocurrency trading platforms are a great way to buy and sell cryptos using other cryptos. Exchanges such as Kraken and Binance would tend to offer lower fees on Bitcoin Ethereum compared to other exchanges.
Peer-to-peer (P2P) exchanges
Peer to peer exchanges allows investors to remove the middle man when trading cryptos. As such you will be effectively directly communicating with the person that you are buying or selling to. The seller will be able to have the freedom to state the price they want for their cryptos and also their accepted payment methods.
Using P2P exchanges gives you more privacy worldwide but you would probably end up settling for a price that is higher than your market exchange rate. Great examples of P2P exchanges are LocalBitcoins and Paxful.
How to Buy Bitcoins
Once you have opted for your preferred cryptocurrency exchange, you will just need to utilize it and submit your order for your first cryptocurrency. You will mostly be required to register with the platform first, each platform has a varying degree of regulatory requirements and security with higher regulations usually requiring more personal data compared to less regulated ones.
As such, you are able to select one other exchange which does not require as much verification but at the cost of lesser security. Once done, you will need to make a first deposit to exchange Bitcoins on the platform.
Most platforms would require deposits made first using bank transfers out of your bank account or debit card in order to have funding. Consequently you will use those funding to exchange it for Bitcoins which can then be stored on your Cryptocurrency wallet – more of which will be explained later in this article.
The exact steps and fees that the platform charges you when you buy and sell Bitcoins in Nigeria would depend largely on the platform itself so take some time to go through their features and details.
How to Choose the Right the Platform
Of the platforms you will select, remember to take into account some factors which can help you make your choice on which exchange you will sign up for.
Where the exchange is based and regulated?
It is crucial to check how much regulated the exchange is and if it is legit as some exchanges out there can possibly be a scam and you might end up losing your investment.
Fees
You should check out the fee structure of each exchange to find the best structure that suits you. One of the most affordable exchanges out on the market are Kraken and Binance which offer competitive prices for their transactions
Transaction limits
Some exchanges on the market would impose depositing or withdrawal limits if investors want to use their services. These transaction limits usually depend on how verified your account is on the platform or how much volume the trade you are making is, being the larger the trade, the lesser the limits.
Some exchanges will make restrictions to the clock. For example how much you are able withdraw from your account within a 24-hour period?
Supported cryptocurrencies
Another important factor of exchanges would be to check if the crypto you wish to trade is available on the platform. Most Bitcoins can be bought and sold on the exchange and some exchanges allow crypto-crypto trading.
Customer support
Another important aspect to your crypto trading needs, customer support is a vital aspect of crypto trading as you should be able to quickly contact the platform’s representatives when you are facing a problem with your transaction. The exchange should offer online chat or a telephone line available on most hours for you to get in touch with them quickly and efficiently.
Reputation
Reputation is a vital aspect for cryptocurrency exchanges and you can easily search the platform’s name on the internet in order to find out other users’ experience on this platform.
Get A Good Bitcoin Wallet
Once you purchase your cryptocurrencies, you should select one of the bitcoin wallets in order to store your cryptos. Bitcoin wallets are like your bank account but instead of storing cash, you will store cryptocurrencies in the wallet.
There are mainly two types of wallets which are a cold storage or a hot storage wallet. A cold storage or offline wallet generally stores the cryptocurrencies on a hard drive or USB disk – safely and away from the internet. This ensures that your cryptos are protected from hacking and online theft. However one downside is that you may need to always plug your hardware into the PC in order to access your cryptos.
A hot storage wallet is an online wallet where your cryptos are stored. The advantages of this is that your cryptos are easily accessible with an internet connection. However it has the drawback of being prone to online hacks although some wallets do offer a high level of security for their Hot storages.
How Do I Pay for My Bitcoins
There are several ways for you to purchase cryptocurrencies each having its own advantages and disadvantages
Buying Cryptocurrency with Cash
You would be able to purchase cryptos with cash from stores that accept the Naira, or from a P2P exchange that has sellers who accept cash in exchange for Bitcoins in Nigeria.
How to buy cryptocurrency with Yellow Card vouchers
Yellow card allows you to purchase cryptocurrencies online using a bank transfer or ATM accounts. However they only support Bitcoin Core and Dash, and will be supporting Bitcoin Cash and Tether in the future.
The good thing about utilising Yellow Card services are that even if you only have cash, you are able to acquire the crypto from a Yellow Card shop or any of the platform’s agents by buying a Yellow Card voucher from a merchant that comes with a 16-digit code to redeem it on the mobile app.
Bitcoin ATM
Another popular way of buying bitcoin in this country would be to use the Bitcoin ATM. It could be used to deposit cash into the ATM which can then be converted into Bitcoin.
Debit or credit card transactions
Investors are able to use debit or credit cards when purchasing cryptocurrencies, however some exchanges out there do not support these cards as a payment method so you will need to check if this payment method is supported on the platform.
Buy Bitcoin with another crypto
If you have some cryptos on hand, you are able look for exchanges that offer trading pairs such as BTC/ETH or BTC/DASH which means you will be able to trade Ethereum for Bitcoin or Dash for Bitcoin. This is also subject to the crypto exchange if they allow these pairs for their service.
Frequently Asked Questions (FAQ)
Q: Which exchange is the largest Bitcoin exchange?
NairaEx is the largest Nigerian Bitcoin exchange.
Q: Can I buy Bitcoin with 1000 Naira?
You are able to convert one thousand Naira into its equivalent worth of Bitcoin which would be about 0.00000011 worth of BTC.
Q: Which is the best Nigerian Bitcoin wallet?
The best wallets to store your Bitcoins are Coinbase, Blockchain Wallet, Trezor and Exodus.
With over 10 years of experience working as a financial analyst, Eric is highly aware of the potential of cryptocurrency, particularly Bitcoin, and the impact it will bring towards the global economy. He is committed to share everything he knows about crypto here at Crypto Digest News.