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Naira Devaluation: How Nigerians Can Protect Themselves With Bitcoin

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Naira devaluation
Hillato / CC BY-SA

In July 2020, the Central Bank of Nigeria further devalued the Naira by about 5.5 percent to 380 Naira to the dollar. Previously, the regulator had revised the exchange rate from 307 Naira to the dollar to 360 in March. The reason for the devaluation was the decrease in oil prices, USD shortages, and increasing pressure from external lenders.

In this guide, you will find out what the effects of the Naira devaluation are and how you can protect yourself.

Naira Devaluation

Currency devaluation is a tactic that central banks use to increase fiscal revenues, reduce debt burdens, reduce trade deficits, and boost exports.

With regard to the Naira devaluation, experts believe that this move will boost fiscal revenues and send a positive signal to lenders. However, they are doubtful that devaluation will control the foreign exchange pressures that the country is facing. With a decline in oil prices and remittance flows, foreign currency shortages could persist.

Oil is the biggest foreign exchange generator in the West African nation. Therefore, a plunge in prices and an ongoing pandemic could sink the country into a massive recession.

Nigeria’s Multiple Exchange Rates

Interestingly, Nigeria operates several exchange rates, a situation that has attracted criticism from economists. For instance, the country has a black market exchange rate, where the Naira trades at more than 450 to the dollar.

Furthermore, the country has interbank rates, rates for hard currency buyers, rates for Muslims making a pilgrimage to Mecca, and rates for Nigerians that want dollars for school fees abroad.

That said, the central bank plans to unify the rates, a move that could increase foreign investment and clarity.

The Effects of Naira Devaluation

NGN devaluation

While currency devaluation provides several positive effects, it also results in negative effects. For example, investors that have bought shares and bonds on the Nigerian financial market could have trouble repatriating their capital if the Naira continues losing value.

Moreover, listed companies with foreign investors are likely to face several challenges. For instance, divestments could dip the stock market value of these companies. Also, companies whose operating expenses are expressed in dollars could experience an increase in foreign exchange losses.

Another consequence of devaluing the Naira is inflation. Inflation can affect your savings, resulting in a value decline over time. Although your savings in the bank could earn a higher interest, the interest rate might not be enough to offset the loss from inflation. Inflation will also affect your purchasing power. As a result, your ability to buy items in the future will decline, especially if your income remains fixed.

Additionally, inflation will affect your investments. Your earnings from an investment during inflation will depend on the type of investment you have made. For instance, precious metals typically perform well during inflation. However, it will cost you more to purchase them.

What is the Solution to the Naira Devaluation?

legitimate bitcoin doublerWith your investments and savings at risk, you should consider a non-conventional investment option like bitcoin. Bitcoin is a suitable investment option because it is a store of value for several reasons.

  • First, no one can confiscate the bitcoin you hold. When you own bitcoin, you hold 100 percent ownership rights, and no one can take it away from you. However, other assets like gold do not have the same feature. In fact, governments can ban their citizens from holding gold. Also, the Chinese government has tried to block access to bitcoin several times but has failed to make an impact. That means that bitcoin is difficult to censor.
  • Second, it is easy to move. It seems pointless to own an asset that you cannot transfer as you please. Fortunately, it is easy to send and receive bitcoin, anytime and anywhere. All you need is a computer or smartphone and an internet connection.
  • Third, anyone can buy bitcoin, whatever its price. The reason for this is that you can buy bitcoin in smaller units. Therefore, with as little as $10, you can become a bitcoin owner.
  • Fourth, bitcoin has been growing since its launch, and this trend is likely to continue. The growth is not only price-related but also support-related. More and more people are taking an interest in bitcoin. For example, there were more than 42 million bitcoin wallets by December 2019.
  • Fifth, the bitcoin supply is limited, giving it more value. Any asset that is a store of value should have a limited supply.
  • Lastly, you can hold bitcoin for years and cash out at a huge profit. Many people bought bitcoin when it was extremely cheap. If they decided to sell now, they would make a huge profit. Therefore, it is clear so far that holding bitcoin as a long-term investment is rewarding.

Win 4,000,000 NGN Worth of Bitcoin

Paxful GiveawayCrypto companies are often running campaigns to reward their users. Currently, Paxful has set aside four million Naira in bitcoin to reward traders from Nigeria.

The campaign started yesterday, 21 August 2020, and will end on 31 August 2020 at 11.59 PM.

Winning a reward is simple. If you do not have a Paxful account, create one, verify your ID, and make one trade. 200 new traders that do this will win 5,000 Naira in bitcoin.

Furthermore, Paxful will reward 30,000 Naira in BTC to the top three traders that conduct the highest number of trades, the highest volume of trades, and the most number of trades in Naira. That means that in each category, three traders will get 30,000 Naira in bitcoin. As if that is not enough, Paxful will select one Nigerian trader at random to win 30,000 Naira in bitcoin.

The winners of this giveaway could choose to trade the bitcoin they win for a profit, giving them a chance to earn an extra income. With an economic crisis on the horizon, an extra income is a great opportunity for all Nigerians. Therefore, buying and trading bitcoin is a possible way to protect yourself from the impact of the Naira devaluation.

Sign up to Paxful here to take part in the Bitcoin Giveaway!

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RESIST! How Activists Can Use Bitcoin

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Activists Can Use Bitcoin

As social justice movements leverage social media platforms like Twitter to make their voices heard, many have discovered a new tool: Bitcoin. The internet is the epicentre of social change, and it only makes sense that activists are now adding bitcoin to their arsenal. During the recent #EndSARS Nigerian campaign, young feminists raised $55,000 in cash and bitcoin donations, which is an example of how activists can use bitcoin to raise funds.

So, can cryptocurrencies provide the same level of impact on activism as social media platforms? This article explores how activists can use bitcoin.

The Financial Challenges of Activism

Activism

Any activist willing to protest against injustice should know how to raise money. Protesters need banners, water, food, and medical care in case they get hurt. These requirements come at a cost, necessitating movements to search for funds.

Activists can raise money out of pocket or they can reach out to well-wishers for donations. The former option is unreliable, which means that social justice movements have to fully rely on donations. Unfortunately, government censorship can make it hard for such movements to receive donations through banks and other conventional financial institutions. Moreover, they could punish the donors that support social justice campaigns.

The #EndSARS campaign, for instance, has faced challenges with receiving donations because the Flutterwave links were down for some time. According to Tweets on the Feminist Coalition account, the Central Bank of Nigeria could have been behind the Flutterwave payment issues. However, it is unclear. Flutterwave is a payment solution in Nigeria, while the Feminist Coalition is one of the organisations that has been active in raising donations for the campaign.

Furthermore, donors outside the country where a campaign is taking place will find it challenging to send donations due to the high cost of sending money. Also, online payment platforms like PayPal are not available in every country. That prevents people in these countries from making donations to campaigns happening in other parts of the world.

Speed is also important when collecting donations. Activists will often need funds immediately to keep a campaign going long enough to make an impact. Therefore, if they are not receiving cash directly, they might have to visit a bank to withdraw large amounts of money. That could waste a lot of precious time.

Can Activists Use Bitcoin to Solve Financial Problems?

BLM

Yes, they can.

Bitcoin is censorship-resistant, which means that governments cannot prevent activists from receiving donations in bitcoin. That provides the convenience that activists need to fund their campaigns when they are still “hot” enough to make a difference.

To solve the challenge of receiving donations through Flutterwave, the Feminist Coalition is now accepting bitcoin donations only.

Bitcoin is pseudonymous, which means that governments cannot easily trace bitcoin transactions to the real-world identities of the senders and recipients. That offers a sense of security to both donors and activists, especially in countries where protesting can mean beatings, jail time, or death.

It is even better when social justice movements are decentralised because there are no public leaders that law enforcement can pursue. For instance, much of the #EndSARS and #BlackLivesMatter campaigns grew organically online.

Therefore, activists can use bitcoin to receive pseudonymous and censorship-resistant donations.

Moreover, they can receive donations from anywhere at any time. That is because bitcoin is accessible 24/7 to anyone with a smartphone or computer and an internet connection. As a result, more people can financially support causes they believe in, even though they live on another continent.

Also, bitcoin transactions do not involve third parties, thereby cutting down the cost and increasing transaction speeds. Once a donor sends BTC, the activist will receive it in minutes and fund their campaign immediately.

Furthermore, buying supplies for a protest becomes easier when local businesses start accepting crypto payments. For instance, several local businesses started accepting cryptocurrencies in 2019 in support of the Hong Kong protests against Chinese influence.

Bridging the Wealth Gap

BLM activistFighting deep-rooted social injustices require bridging the wealth gap between the oppressors and the oppressed.

In a world where the wealthy influence political decisions in their favour, amassing wealth could be a possible solution that marginalised communities can adopt to fight discrimination.

Here is where bitcoin can come in.

Since marginalised communities suffer discrimination from traditional financial institutions, bitcoin becomes an attractive alternative. The censorship-resistant and easy accessibility of bitcoin means that marginalised communities can use it to create wealth and acquire financial freedom and the power to fight prejudices.

By way of illustration, activists can direct part of the bitcoin donations they receive to fund small businesses in the community. As a result, financially stronger businesses can create jobs and increase the purchasing power of other community members.

Other methods that communities can use to create wealth include buying and holding bitcoin and accessing business loans in crypto.

Money can help fight police brutality better than protesting on the streets. That is what Bitcoin and Black America author, Isaiah Jackson, believes.

“Without economic strength, you have cops coming from outside of the community […], and they do not value it [or the people]. They do not see you as a person, and that is an issue,” he told Cointelegraph.

Moreover, marginalised communities can create their tokens or community currencies to improve their financial positions.

Social media has made the world aware of the social injustices that take place in various parts of the world. Now, bitcoin and other cryptocurrencies are giving the world a chance to support social justice movements financially. Together, both tools are creating a world where no one has to fight injustices alone.

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Is Bitcoin “Digital Gold”?

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digital gold bitcoin

When Satoshi Nakamoto created bitcoin, he envisioned a peer-to-peer digital currency that would allow people to send money without the need for financial institutions. However, bitcoin’s use as a store of value overshadowed its original goal, and people started referring to it as “digital gold.”

But is it?

Bitcoin as Digital Gold

As you think of bitcoin as digital gold, the first thing you notice is the golden colour circling its symbol. If you go back in history in the times before bitcoin, developers were keen to create a currency that would be the digital version of gold. For instance, the inefficiencies of conventional financial systems and the use of gold as currency inspired Nick Szabo to create Bit Gold.

So, that could have been the thinking of the time: marrying the pros of digital currencies with the benefits of precious metals. That could explain why a yellowish-orangey colour circles the bitcoin symbol.  Also, bitcoin is often illustrated as a golden coin.

Nevertheless, the association between bitcoin and gold does not end with the logo.

Digital Gold vs. Physical Gold

Bitcoin and gold have several similarities.

  • They both have a limited supply, which boosts their value.
  • You can divide both assets into smaller units and they will not lose per unit value. The smallest unit of bitcoin is the satoshi. 100 million satoshis make one bitcoin.
  • Gold is stable, and so is bitcoin. Although the latter is volatile in terms of price, bitcoin’s underlying technology, the blockchain, gives it stability.
  • They are both easily recognisable.

Bitcoin is more superior to gold because you can move it to any place of the world in minutes, it is impossible to counterfeit, and it facilitates online payments.

PaxfulFurthermore, bitcoin is more accessible and easy to hoard. Exchanges and peer-to-peer marketplaces like Paxful are making it easier for people across the globe to own cryptocurrencies. For instance, with a smartphone and an internet connection, anyone in the world can buy bitcoin.

Therefore, saying bitcoin is digital gold is an oversimplification. Bitcoin is superior than gold in terms of features and potential impact on economies. However, viewing bitcoin as digital gold is a strategy beginners can use to easily understand the cryptocurrency.

Bitcoin as a Store of Value

digital goldAfter Satoshi released bitcoin to the world, the response was probably better than the unknown creator could have hoped. The cryptocurrency attracted a loyal community that started using bitcoin as a store of value because of its scarcity, safe-haven characteristics, and the fact that it is impossible to counterfeit. As a result, many people are holding bitcoin as a long-term investment because they believe in its long-term value. Moreover, the population of bitcoin supporters is continuously growing.

The debate on whether bitcoin is a store of value or not has been raging for years. While bitcoin “HODLers” believe that bitcoin will one day make them wealthy and shield them from a financial crisis, others believe that bitcoin, which is also partially money, cannot be a store of value as well.

That said, bitcoin has made several people into billionaires, proving that it is a practical store of value. Gold is a store of value as well, and it offers financial freedom and protection during economically tough times. However, governments could deny citizens from owning gold. On the other hand, governments would have a more difficult time blocking citizens from owning bitcoin.

Where Does Bitcoin Get Its Value?

The answer to this question is simple. The decentralised nature of bitcoin gives it a lot of value. As the first digital currency that is not under the control of any government or organization, bitcoin is extremely valuable. Therefore, anyone that is against conventional financial systems will find bitcoin very attractive.

Gold is also a decentralised asset. However, the fact that it is not easy to move or hoard, makes bitcoin arguably the more valuable asset.

The Money of the Internet

Although bitcoin as money was overshadowed for some time by its store of value feature, this is changing. The introduction of the lightning network and its continuous growth is facilitating bitcoin as the money of the internet.

The Lightning Network (LN) is a payment protocol that uses smart contracts to facilitate fast bitcoin transactions. LN is built on top of the Bitcoin blockchain as a second-layer application. LN is supposed to solve Bitcoin’s inability to process more transactions per second. The network promises to handle millions to billions of transactions per second compared to bitcoin’s seven. Currently, you can enjoy the speed of LN by getting wallets like Zap, Breez, and Eclair. However, these wallets are still in development and could have bugs.

LN is taking time to grow, and it has not come through on its promise yet. Also, researchers observe that LN is becoming more centralised and, therefore, more prone to attacks.

Scalability issues aside, bitcoin has the potential to change the payments sector. Major companies like Microsoft, AT&T, and Namecheap are accepting bitcoin as payment. Additionally, platforms like Paxful are enabling businesses to accept payments from anyone in the world through bitcoin.

As such companies set the stage for bitcoin as the money of the internet, it will take time for the world to uniformly accept bitcoin as a payment method. That means that its money functionality will remain underutilised for the time being.

It is clear by now that bitcoin provides more benefits than gold. Therefore, referring to it as digital gold is an understatement. Bitcoin has a lot to offer, and with time, it could become a widely accepted payment method.

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New Ethereum Wallet Argent Makes DeFi Accessible for Everyone

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Argent

The DeFi market is booming. The total amount of crypto correctly locked in DeFi protocols recently exceeded $2.4 billion. More and more crypto investors are turning to DeFi DApps to earn interest on their cryptoassets. However, DeFi is still too complicated for the average non-techy investor to get involved. London-headquartered Ethereum wallet provider, Argent, wants to change that. 

BitcoinAfrica.io reached out to Argent co-founder and CEO, Itamar Lesuisse, to learn more about Argent and the DeFi market. 

What is Argent? 

ArgentArgent is a user-friendly Ethereum wallet that enables you to store, send, and receive, borrow, earn interest, and invest. Effectively, it is a one-stop-shop for all things DeFi at your fingertips.  

Unlike most Ethereum wallets, which focus purely on storing, sending, and receiving ETH and ERC-20 tokens, Argent goes a step further and provides easy access to an array of DeFi DApps

“Argent’s mission is to empower everyone to control and prosper from their digital assets and identity. Everyone should have equal access to economic opportunity and crypto can be a critical enabler of this.” Argent CEO, Itamar Lesuisse, told BitcoinAfrica.io 

“To this end, we’ve built the first non-custodial wallet with the ease of use and security of the best new bank apps. You can earn interest and invest in a tap via DeFi DApps; protect yourself with daily transfer limits, whitelisted contacts, and easy locking; and you never need a seed phrase,” he added. 

Argent is available for Android and iOS and has a very smooth onboarding process. No mnemonic phrase to write down and no wallet.dat file to back up. You sign up a username and passcode, and you provide an email address and a phone number. That’s it. 

To fund your wallet, you can either transfer ETH or ERC20 tokens or you can purchase them in-app via Apply Pay, bank card, or a bank transfer. This is made possible through a partnership with MoonPay.

Arguably, the best feature of Argent, however, is that it provides direct access to DeFi protocols in an extremely user-friendly way. 

DeFi Made Easy

Argent enables you to use the digital assets held in the wallet to invest in DeFi protocols with the click on a button. There is no need to sign up for each platform. You simply access the “Invest” section and have immediate access to leading DeFi protocols, such as Aave, Compound, PoolTogether, and Uniswap. 

Even first-time crypto users can get involved in DeFi. All it takes it choosing the asset you want to invest, how much of it, and in which protocol you would like to place it. 

For example, you could purchase $1,000 worth of USDC and place it in Compound to earn 1.75% APY. That would likely be more than the interest any bank would pay you on US dollars. 

Moreover, Argent users can invest in TokenSets, take part in PoolTogether, or provide in a Uniswap liquidity pool. 

What’s Next for Argent?

Argent launched the public version of its app in May 2020 and has already made waves in the Etherem community. But this is only the beginning. 

“In the last few months we’ve launched our DeFi Hub (which provides one-tap access to the best DeFi DApps, like Compound, Aave and TokenSet), and also dark mode,” Lesuisse told BitcoinAfrica.io. 

“Next, we’re focused on making it easy for anyone to access a DApp, even if they don’t have a crypto wallet. Our SDK for DApp developers will mean people can onboard to a DApp without a browser extension or seed phrase. They can easily buy crypto with fiat, and they can use the DApp without having to hold ETH. We hope it significantly lowers the barriers to DApp adoption,” he added.

The Future of DeFi

Currently, the DeFi market is a playground for crypto traders and the Ethereum community. But the market is growing as it is receiving more media attention as well as an influx of funds. 

Lesuisse and his team envision that the DeFi market will become more accessible and user-friendly in the coming years. And that it will open it to non-crypto investors as well. 

“Over the next five years, we hope it becomes even easier to use, safer, and, most importantly, develops more use cases that are compelling to a wider audience. We hope by solving many of the usability issues that DApps can focus on building those use cases, taking DeFi from a niche to a mainstream topic.”   

The DeFi market is still in its infancy. Vulnerabilities and bugs in already operational protocols will likely continue to plague DeFi as part of its growing pains. But that doesn’t change the fact that DeFi has the potential to become the fintech innovation that will finally take power away from banks and into the hands of the people.

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