You are in Nigeria and willing to invest in cryptocurrency but not sure of how to go about it? Here is a quick guide to put you through how to acquire your first digital asset in fiat (Naira) equivalence without any hassle, thereby making some money through cryptocurrency.
Nigeria, being a country where bitcoin has not been largely adopted, has many people that are faced with the problem of exchanging their cash for Bitcoin without falling into the hands of scammers. Bitcoin, which is the first and largest cryptocurrency, is the most used and traded virtual currency in Nigeria.
The Nigerian government is one who has been indifferent when it comes to the use and adoption of cryptocurrency. The Central Bank of Nigeria, which is the apex regulatory financial body in the country, once warned citizens about the use of cryptocurrencies, citing that it was mostly used as a means of money laundering and internet fraud.
There are several active cryptocurrency exchange platforms in Nigeria without hassle, some of the popular ones include Paxful, LocalBitcoins, Changelly, and Binance. However, it is important to get conversant with how to use these platforms as they all have their differences. Some of these trade platforms allow users to directly convert their cash to bitcoin and other digital assets even without user Identity verification, while others prioritize the Know Your Customer (KYC) and Anti Money Laundering (AML) checks on clients before authorizing any transaction on their platforms.
Most Nigerians would prefer to buy and sell their bitcoin for cash through a peer to peer (P2P) method. This appears to be the quickest means of buying digital assets, while staying anonymous.
For investors who would prefer to exchange and store their crypto assets through crypto wallets, the most popular wallets in Nigeria are Luno and Blockchain.
This article will cover the best and most common ways of exchanging your fiat for bitcoin in the most populous African nation, while considering the pros and cons of each method.
General Steps to Purchase Bitcoin in Nigeria
1. Find a potential seller in your area who accepts Naira (cash).
2. Select desired worth of coins and place an order.
3. Get the seller's account number.
4. Deposit the bitcoin equivalence in Naira into the seller's account.
5. Show your trade receipt to the seller.
6. Receive your bitcoins!
Below are some of the platforms to convert your cash to bitcoin and vice versa:
1. Luno App
The Luno App is a crypto exchange wallet that allows users to send, receive, and store Bitcoin without exorbitant transaction charges. The App, which is a available on both iOS and Android operating systems, also supports trading Ethereum; thereby, allowing the conversion of Ethereum to Bitcoin and vice versa.
A major advantage of the Luno App is its ease of use and flexibility; users can purchase, withdraw Bitcoin and Ethereum directly to their Nigerian bank accounts.
· Allows funding from bank accounts
· Allows withdrawals to bank accounts
· Supports both Bitcoin and Ethereum
· Charges small transaction fees
· App is easy to use
· Also supports Ethereum
Requires the verification identity of users by the KYC standard.
Usually takes up to 30 minutes before funding accounts
Paxful is a peer to peer bitcoin exchange that allows you to buy and sell bitcoin in exchange for money. It is a marketplace that helps to connect buyers and sellers of Bitcoin. Paxful accepts over 300 different payment methods. As a peer to peer platform, buyers and sellers would need to reach agreements on how to make trades. Paxful offers an escrow service that ensures transparency and safe transactions with small transactions fees, in fact, transactions within the platform are free. Paxful also gives users the freedom of creating buy and sell orders as they wish while regulating the range of variance in pricing.
· Small service charge
· Fast transaction time
· Offers over 300 payment methods
· No identity verification is required before making transactions
· Offers escrow service
· Supports bitcoin alone
· Prices are determined by sellers
· High rate of scam occurrences
LocalBitcoins is also a peer to peer exchange where buyers and sellers of bitcoin connect locally. The exchange offers secured and anonymous bitcoin trades between a customer and a retailer. LocalBitcoins does not involve in the transaction between these two parties, it only serves as a market where buyers and sellers of bitcoin meet due to its emphasis on proximity.
The bitcoin exchange platform recently removed in-cash trade option in a bid to reduce the number of scammers on the website.
· Fast transaction time
· Charges only 1% fee for transactions made
· Offers various payment methods
· Allows users to check the reputation of the other party
· High rate of scam incidents
4. Direct Peer to Peer Transactions
There are a lot of Nigerians willing to sell and buy bitcoins for Naira, one can easily meet such people physically or on the internet. Meeting a potential buyer or seller in person would always be the best option in this case, although it comes with setbacks such as physical theft or an attack.
I, for one, would prefer to buy/sell bitcoins from an individual because it gives both parties the freedom to determine how the transaction would be made. Be sure that you meet a new buyer/seller in an open place like coffee shops, eateries to avoid physical assaults.
However, you have to be sure that you are dealing with someone who's trustworthy and has a good history of making transactions.
If you choose to deal with someone only, which is not advisable due to the high rate of crypto scam in recent times, always make sure you obtain and verify some vital information about such person.
· Allows you to decide terms of the transaction
· Faster means of exchanging bitcoin
· Verification of Identity is not always required
· High rate of scam in this method
· Could lead to theft
· Only recommended to an expert in bitcoin trading
· Cash payment cannot be reversed
NairaEx is a local bitcoin exchange that allows users to purchase and sell bitcoin in Nigeria. The exchange also provides customers with the option of creating buy and sell orders. Using the platform is very simple and interactive as it boasts of over 900,000 transactions.
· It is safe and secure
· Easy to use
· Active customer service
· Requires user identity verification
· The price rate is determined by the exchange
· Funding takes up to 12 hours
Some Tips for You
1. Always go for a physical peer to peer transaction with a friend
2. Meet in public place
3. Don't store your bitcoins in exchanges, software and hardware wallets are better options
4. Beware of theft and scams
5. Make simple research about exchanges
Buying bitcoin as a beginner in Nigeria might be a bit tricky, the first step is to choose the right exchange that suits you. Looking at the various methods of acquiring bitcoin with cash in Nigeria as mentioned above, you would realize that all methods have advantages and disadvantages. Most of the buying/selling methods mentioned above are also applicable to individuals that live outside Nigeria.
Not in Nigeria and you are looking for where to buy bitcoin around the world? Here's a guide on the top exchanges to buy and sell cryptocurrencies conveniently. You can also buy bitcoin with your credit/debit cards on these sites.