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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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The First African Art Collection Powered by NFTs is Here

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African Art
Photo credits: Kureng Dapel/Rich Allela

Picha Images – a digital media company powered by Artificial intelligence and Big Data – is launching the first crypto art non-fungible tokens (NFTs) in Africa. The upcoming auction will feature African art from the Kenyan-based Multiple Award-Winning Photographer and Filmmaker Rich Allela and will be held from April 26 to May 3, 2021.

The NFT auction and artwork will be hosted on OpenSea, one of the biggest non-fungible token digital marketplaces, founded in 2018.

Why is Picha Images Going Crypto?

Picha Images has a track record of being highly innovative and has been recognised as a disruptor in the Kenyan and African creative industries.

Covid Art Gallery

The Virtual Africa COVID exhibition held by Picha Images in conjunction with the World Health Organisation (WHO) and Create2030

The company embraces Artificial intelligence and utilises Big Data analytics to produce high-quality photo and video productions.

Furthermore, Picha Images develops products and services in Business to Business (B2B) photography; digitises hardcopy images; facilitates cloud storage of images for companies, and carries out videography. The company has in the past been credited with holding one-of-a-kind Augmented and Virtual Reality exhibitions, even during tough times. 

Pre-COVID exhibition

Bringing still images to life using Artificial Intelligence in Rich Allela’s exhibition “30 under 30”, held in 2019 (Pre-COVID)

As a company that values technological advancements, Picha Images’ approach of having NFTs for artists such as Rich Allela makes technological and financial sense. The company is currently placing the wellbeing of their creative artists first by exposing them to a way to secure their work, maintain the copyrights to their creations and earn royalties in perpetuity.

For a customer of Picha Images, purchasing these NFTs will mean that you will have hacker-resistant proof of ownership of a digital piece of art.

Why Rich Allela?

Afro-renaissance

Photo credits: Rich Allela

Rich Allela is a multidisciplinary artist whose work focuses on culture and heritage in Africa. He has an interest in documenting cultures that are at the threat of disappearing due to modernisation.

Allela’s works are famously described as “Afro-renaissance” because they herald the rebirth of the African culture through the creation of a new generation of art aimed at rewriting the African narrative.

These unique art pieces have won numerous awards including the Africa PicFair photo awards and Kenya Photo Awards and have been used by companies such as Canon Global to launch products such as new cameras. As an influential artist, Rich Allela’s story has been featured on CNN, BBC, and other news outlets around the world.

Speaking to BitcoinAfrica.io, Rich Allela said;

“For ages, artists have been getting a raw deal when it comes to secondary sales of their work. By launching the Rich Allela’s Afro-renaissance collection on NFT, Picha Images aims to empower artists to maintain the copyright of their work and earn from secondary sales. Through this auction, the public will place their bids where the highest bidder will walk away with a piece of digital art and send a message to the world on the value of art as an investment worth making.”

Would You Like to Participate in the NFT Auction?

The auction will go live on April 26 and can be accessed via https://opensea.io/accounts/Rich_Allela.

To learn more about Rich Allela’s works, visit his Instagram account @Richallela or reach out to Picha Images by visiting their website.

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How to Buy Tether (USDT): A Step-by-Step Guide for 2021

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how to buy tether

Tether is a stablecoin backed 1:1 by the US dollar. As a result, it does not experience the same volatility as other cryptocurrencies. In this guide, you will learn how to buy tether on Africa’s leading peer-to-peer exchange, Paxful.

How to Buy Tether (USDT)

To buy USDT, you will need a cryptocurrency wallet and an account with an exchange. Here are the steps you should take:

  • Download a mobile, desktop, or hardware crypto wallet to store the USDT you will purchase.
  • Next, create an account with an exchange or a P2P marketplace that supports Tether USD. For instance, you can create an account on  Paxful. If you already have an account, log in.
  • After registering an account, verify the required credentials. Paxful requires users to verify details like phone numbers, home addresses, email addresses, and ID numbers.

How to Buy Tether from a Peer-to-Peer Marketplace

Buy Tether on Paxful

If you created an account on Paxful, you can buy tether by using these steps.

  • Visit the website.
  • Click “Buy” and select tether.
  • Choose your preferred payment method and currency. For example, Paxful offers over 350 payment methods such as PayPal, mobile money, gift cards, crypto, and debit cards. Also, enter the amount you wish to purchase and select your country.
  • Click “Search Offers.”
  • The platform will display a list of offers based on the criteria you chose. Browse through this list paying close attention to the buy limits, prices, offer terms, and time limits.
  • Read the reviews of the sellers that catch your attention. Before choosing a seller, ensure that they are fully verified and active on the platform.
  • Once you find a suitable seller, click “Buy.” Note that you should read the seller’s terms first before starting the transaction.
  • If the platform offers a live chat feature, you and the seller can discuss the transaction details. For instance, the seller will send you the payment details through this chat feature.
  • Make the payment and follow any other instructions the seller has provided. Additional instructions that sellers might require you to undertake include sending a photo of your ID. The seller could use this document to verify that the payment sender matches the name on the ID.
  • Once you complete the payment, confirm on the website that you have paid.
  • The seller will then verify the payment and release your USDT.
  • After a few minutes, your USDT balance should reflect in your account. If you desire, transfer the crypto to another wallet.

Purchase Tether in Person

If you prefer to make a one-on-one transaction, look for local tether sellers on reputable Facebook or Telegram groups, or choose the “in-person” purchase option on a peer-to-peer exchange.

  • Contact the seller and schedule a meeting at a public place. Tell them how much you wish to buy so that they can prepare themselves in advance. They should also tell you how much it will cost.
  • Once you meet with the seller, show them the money as a sign of trust. But do not hand it over just yet. The seller should send you the USDT first.
  • Wait until the new USDT balance reflects in your wallet before paying the seller.

Buying tether is straightforward and flexible. You can use your local currency or another digital currency to acquire this stablecoin. Moreover, using a platform like Paxful gives you more than 350 methods of buying USDT, thereby providing convenience.

To buy Tether USDT in Africa, access Paxful here.

*This article was written in cooperation with Paxful, Africa’s leading peer-to-peer bitcoin exchange.

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Weekly Roundup: Bitcoin Hits over $60,000, Luno Launches ETH & USDC Interest Accounts

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Bitcoin

Bitcoin broke past the $60,000 mark on March 13, 2021, to surpass Facebook in total market value. To learn more about this and other stories, keep reading this article.

Bitcoin Hits Over $60,000 and Surpasses Facebook in Value

Bitcoin AcceptedOn March 13, 2021, bitcoin recorded a high of $61,683.86. This is yet another milestone that the cryptocurrency has achieved after recording a series of several all-time highs in the past three months.

Institutional investors continue to boost bitcoin’s price with Chinese firm Meitu being the latest company to purchase crypto. The firm bought $22.1 million in ether and $17.9 million in bitcoin.

“Beeple’s $69 million [non-fungible token] record demonstrates the true power of crypto, adding curiosity and fuel to the retail fire. Expect volatility but a landing of $100K levels by Q3,” said Jehan Chu, Managing Partner of trading firm Kenetic.

Furthermore, bitcoin’s market cap has risen to the eighth position, surpassing Facebook. Currently, bitcoin has a market capitalization of about $1.07 trillion while Facebook has a market cap of $808.76 billion.

Luno Users Can Now Earn Interest on Ether and USDC Savings

Luno users can now add ETH and USD coin (USDC) to their savings wallet where they can earn 4 percent and 7.6 percent APR, respectively. The exchange introduced the savings wallet five months ago allowing users to earn up to four percent on their bitcoin savings.

Luno Earn

“The addition of two new cryptocurrencies to the savings wallet gives customers even greater flexibility and potential to earn interest as they grow their crypto savings. A high percentage of Africans who own cryptocurrency do so for speculative investment purposes, with the majority holding their crypto for the long term. If your crypto investment strategy is holding your crypto long-term, the savings wallet earns you additional interest for what you were already doing,” said Marius Reitz, the General Manager for Africa, at Luno.

According to a Luno 2020 survey, more than a third of the respondents (35 percent) were not earning interest on their traditional cash savings. On the other hand, 54 percent were not earning interest on their current bank accounts. As a result, Luno wants to change these statistics with its crypto savings wallet.

The savings feature pays out interest monthly and users can access their savings 24/7. Moreover, 250,000 people are using the savings wallet since its launch.

South African Company Invests in Bitcoin

It is not large companies alone that are investing in bitcoin. According to an article on Tech Central, open-source software firm LSD Information Technology has purchased R2 million in bitcoin (about $135,570.70).

The company’s board agreed to invest in the digital asset on January 4, 2021. In the initial purchase, it bought R1 million in bitcoin then bought the other R1 million over the next two weeks. The firm used the crypto exchange BitFund to buy and hold the BTC.

“Our vision is to make the world more open, and bitcoin supports our philosophy on how we believe the world works best. Working in the open-source space seems to attract many crypto enthusiasts for whom the decentralised open nature of cryptocurrencies appeals,” said LSD founder and CEO Stefan Lesicnik.

The firm participates in running and maintaining bitcoin full nodes.

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.

Bitcoin Beginner's Handbook

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