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Which is a Better Store of Value: Bitcoin or Physical Gold?

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In the last ten years, Bitcoin has experienced astronomical growth and increased interest in South Africa. A lot of South Africans are now interested in how to buy Bitcoin. With a market cap of USD 171 billion, bitcoin has become one of the most profitable assets in the world. Just as computers and the internet revolutionized the way we keep, exchange, and process data, BTC completely improves how we can store and exchange money.

Gold has played a principal part in the development of the world’s economy for so many decades. As our cash and remittance systems change, BTC has become an asset with a better store of value and an apparent alternative to gold.

There have been many comparisons and studies in recent years on Bitcoin being a kind of digitized gold. However, can BTC be compared to gold as a store of value? Can BTC guard against inflation risks like gold?

In this article, we will be comparing BTC and gold to see which is a better store of value.

Confidence in Bitcoin and Gold

If most people do not agree that an asset has value and can be used as a store of value, then such an asset cannot be used as a store of wealth. In this case, gold has an advantage over Bitcoin. In whatever form gold might be (jewelry, coins, etc), most people are likely to accept gold as a valuable asset.

With Bitcoin just arriving on the scene not too long, its recent emergence puts it at a disadvantage in this area as it has only been around for about ten years. It will take some time for people to grow more trust in Bitcoin before it can be generally accepted as a proven long-term tool for keeping wealth.

Portability

Bitcoin has a greater advantage over gold in terms of portability. BTC is not a physical asset, and it can be transferred and gotten from any location with internet access. It also works completely outside the banking protocol, therefore it is simple and quick to transfer and get remittances across the globe.

However, gold can only be stored physically, either in a vault or a personal safe. Gold cannot be accessed easily if you don’t own and hold one yourself, even if you do own gold, it is not easy to move around with it. This makes Bitcoin a better store of value over gold when it comes to portability.

Additionally, some government authorities have historically tried to prohibit the ownership of gold privately. For instance, it was not legal to own and hold gold privately for about forty-one years in the U.S.

There is a lesser likelihood that a government could successfully prohibit access to BTC since it will require shutting down the entire internet. The government of China has tried banning BTC many times in the last ten years, and even with China’s huge internet firewall, it has not been able to make a significant impact.

Entry Difficulty

As of the time of this writing, the value of gold is around $1,800 per ounce. Therefore, if you intend to buy a 1oz token, the least you can pay is $1,800.

One BTC is about $33,000 at the time of this writing, however, you don’t have to buy one Bitcoin at once. If you intend to buy bitcoin, you can begin with a few dollars.

This makes it easier for people to accumulate Bitcoin compared to gold.

Hedge Against Inflation

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A major reason for purchasing gold is to guard against inflation. Some people are scared that the fiat currencies they hold will experience a decrease in value in the future. Therefore, they change the fiat currencies to gold to help guard against inflation.

Both gold and Bitcoin can be utilized for protection against inflation, although the volatile nature of Bitcoin price makes it an uncomfortable choice for people to protect their fortune against inflation.

The value of gold is quite stable as it increases steadily over the years, and this makes it a good asset to hedge against inflation.

Growth Potential

Gold is an asset that has consistently increased in price over the last decade and century. However, Bitcoin since its existence has exceeded expectations. Although BTC will always have unstable prices due to its volatile nature, it has, proved to be a good investment with a consistent increase in value even during economic breakdowns when Gold did not perform up to expectations.

Functionality

A major assertion in favor of gold is that it is a physical asset and can be used to make pieces of jewelry and other accessories. It has genuine and physical usefulness aside from money. The demand for gold is majorly based on speculative prices.

However, Bitcoin is digital and cannot be used for any other purpose other than being digital, and non-physical storage of value. It is also important to note that the demand for Bitcoin is majorly speculative also.

Risks Involved

Gold has an original stable system for buying, selling, tracking, and weighing. It is very difficult to steal gold, trade fake gold, or debase it. BTC wallets cannot be hacked due to their decentralized and encrypted protocol. However, some online exchanges have low security and this can be exploited by hackers resulting in loss of funds.

After carefully analyzing both assets, it is safe to say that both Bitcoin and Gold are really good stores of value. All you have to do is choose which of the two assets is best suited for you; Bitcoin or Gold.

What is the future of crypto trading in South Africa? Find out if crypto will gain more popularity or be subjected to stricter regulations by the South African government.

Disclaimer: This is a sponsored post. Readers should do their own due diligence before taking any actions related to any company, product, or service mentioned in this article. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product, or service mentioned in this post. 

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Best Practices for Ethereum Smart Contracts Security

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Ethereum Smart Contracts Security

Smart contracts are digitally stored contracts that are automatically executed upon meeting pre-set terms and conditions. They’re used to automate contract execution to immediately assure all participants of the outcome without a third-party involvement or time wastage. Smart contracts are prone to vulnerabilities, and attacks such as reentrancy, front running, ETH send a rejection, and integer overflow or underflow. However, smart contracts are fast, efficient, and accurate, and they promote trust and transparency. Since they are encrypted, they’re hard to hack, ensuring security. Here are best practices for Ethereum smart contracts security.

1. Conduct smart contract audits

A smart contract audit is a security check conducted on smart contract on-chain code to ensure it is free of bugs and other security vulnerabilities. The audit process is done to identify issues, errors, and security concerns in the code to recommend improvements and fix them. Audits increase a business’s credibility and help win user experience. To mitigate any risks, involve the auditors from the early stages of contract designing. This helps ensure your code’s security and the safety of clients’ investments.

2. Ensure careful rollouts

Being attentive and careful will help identify and fix bugs before they can cause long-term complications in a smart contract’s functionality. To ensure intelligent contracts are free from bugs before release, comprehensively test the arrangements to identify any bugs better. If you don’t succeed at finding the bugs, look for a professional bug bounty hunter to help with the effective rolling of your smart contract. Consider rolling out your smart contract to simplify the identification of vulnerabilities.

3. Stay up to date

Keeping track of the latest developments helps improve an intelligent contract’s design to identify bugs quickly. To successfully track new developments, carefully check your contracts to identify any new bugs. Staying up to date with the latest security advancements helps to identify bugs quickly. Consider adopting new security techniques that seem productive as a smart contract best practice. Additionally, upgrading any tool or library helps with bug fixes and security updates that strengthen your smart contract’s security.

4. Keep the contracts simple

Complex smart contracts may lead to increased errors and vulnerabilities. To ensure contract simplicity, choose clarity over performance and simple contract logic. Where possible, use an already written code and modularize it to keep functions and contracts small. If parts of your system need decentralization, only use blockchain.

5. Pay attention to blockchain properties

Some of the blockchain properties to beware of include external contract calls that may perform malicious code, alter control flow, and remember gas costs and the block gas limit. Don’t forget that public functions can maliciously be called in any order and that anyone can view intelligent contracts. Beware that timestamp isn’t precise on a blockchain, but miners can impact a transaction’s execution time with a very short margin.

6. Be prepared for failure

Since non-retrieval contracts may have errors, ensure that your code can respond to bugs and vulnerabilities by managing the amount of money at risk, pausing a contract in case of any issues, and having an upgrade plan for improvements and bug fixes.

Due to various contract vulnerabilities, smart contract developers should pay attention to intelligent contracts security best practices. This ensures the system’s security and the safety of all financial investments.

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Africa is Undergoing a Crypto Renaissance – Here’s Why

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Africa’s crypto adoption is growing at an unstoppable rate, and several recent studies point to the continent’s transformation into one of the largest cryptocurrency hubs in the past years.

For example, the 2020 Geography of Cryptocurrency Report conducted by Chainalysis revealed that Africa’s cryptocurrency sector is now one of the top 10 in the world, growing from 67% to 78%. Kenya and Nigeria stood out as the countries with the highest crypto usage. This is consistent with the findings of a Yahoo Finance report, which found that Nigeria was the country that used cryptocurrencies the most. According to the report, 32% of Nigerians have used or owned at least one cryptocurrency in 2020 – that’s much more than some countries in Europe and the Americas.

Another report,  The State of Crypto in Africaconducted by Arcane Research, revealed that Africa is one of the most promising continents for crypto, despite recession concerns and lack of banking infrastructure.

So, what factors have favoured Africa’s rise to power, and what threats will it have to overcome to secure its position as the world’s top crypto economy? 

Africa’s rise to power as a Fintech hub

Africa’s skyrocketing crypto adoption is inextricably linked to the continent’s booming Fintech sector. Favoured by foreign investments, growing mobile usage, and the completion of the African Continental Free Trade Agreement (AfCFTA), Fintech is maturing in Africa. As more and more countries are embracing digital transformation, VC funding is on the rise.

Despite predictions from the World Economic Forum that the economies of African countries will shrink considerably in 2021, reports show that VC funding for African Fintech startups has grown by 51%. South Africa attracted the most investments, followed by Nigeria, Kenya, and Egypt. More and more people are interacting with digital finance services in all their forms.  The popularity of crypto Forex brokers is on the rise, consumers now rely on apps and web services to save money, trade stocks, and manage their portfolio, and online loans are emerging as a simpler alternative to bank loans.

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Remittances from diaspora

Remittances from the diaspora are another important factor behind Africa’s rise as a cryptocurrency power.  According to the World Bank, remittances to Africa continue to be an essential source of income, despite the drops caused by the pandemic. In 2019, sub-Saharan countries reached $48 billion in 2019, and nearly half of this amount was sent to Nigeria. The average expat sends around 6.8% of their income to their home country.

Meanwhile, for African expats, this rate is at 8.9%. What does this have to do with crypto? Well, most people who send money home don’t do this using traditional means because bank transfer rates are prohibitively expensive. Africa is currently the most expensive country to save money to, with transfer fees going as high as 8.3%. Instead, they choose cryptocurrency transfers (bitcoin being the most popular cryptocurrency), which are instant and have no transfer fees.

According to Reuters data, there were over 601,000 cryptocurrency transfers in June 2020, accounting for approximately $316.1 million. However, the actual size of remittances is believed to be much higher than official reports.

Rising inflation rate

While Africa has a Fintech environment that favours innovation and attracts foreign investment, crypto adoption wouldn’t have been the same without the rising inflation rate. Last year, most African economies were hit hard by the recession. As a result, inflation has skyrocketed, and many national currencies, which were already plummeting before the pandemic), continued to devalue.

For example, South Sudan had a whopping 102% inflation rate between 2016 and 2017. In 2020, the Nigerian Naira suffered a 24% devaluation. As the fate of national currencies remained uncertain, cryptocurrency rapidly became a tempting alternative. Despite the sceptics’ lack of trust in crypto, Bitcoin did not crash because of the pandemic. In fact, it even peaked at $64,000 in April, convincing many that crypto really is here to stay. Other cryptocurrencies, like Ethereum, Stellar, and Binance Coin, have also had a favourable evolution.

Lack of banking infrastructure

Numerous times, Africa has been dubbed “the unbanked continent” due to its lack of banking infrastructure. In 2014, 66% of African consumers did not have a bank account. While this percentage has increased in the past few years, African banks continue to rely on traditional, outdated methods, and their services remain unreachable for people with low income.

There is also a general distrust for banks, which pushed people to choose Mobile Network Operators instead, which are a type of alternative financial services providers. Crypto transfers work in a similar way to MNOs, which convinced many Africans to give them a try.

Potential challenges

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Long-term prospects for Africa’s crypto ecosystem are generally positive. However, in order for this technology to reach its full potential, several challenges need to be addressed first.

Lack of high-speed Internet

High-speed Internet is essential for cryptocurrency transfers. However, Africa currently lacks a stable infrastructure. In 2019, Africa had the slowest data speeds, which proved quite problematic when the pandemic hit, and remote work and online learning became essential. Internet access and broadband speed greatly differ from country to country. While speeds are higher in Eastern and Southern Africa, people in West and Central Africa often have to learn and work at speeds of 0.16 Kbps. Due to the lack of competition, Internet prices are higher too.

Low financial literacy

Unfortunately, despite the rising crypto adoption, Africa still has one of the lowest financial literacy rates in the world. According to the Global Financial Literacy Survey conducted by Standard & Poor’s, financial literacy is inconsistent. Botswana ranks the highest, with 52%, but most African countries have low financial literacy (Angola 15%, Nigeria 26%, Sudan 21%, Ethiopia 32%). This will need to be addressed in order for people to use cryptocurrency safely.

Lack of regulation

Although cryptocurrency adoption seems to be unstoppable, most African countries don’t regulate it, which could lead to financial scams. Even experienced investors could be at risk here, so people with low financial literacy who don’t understand exactly how blockchain works could be even more vulnerable.

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5 Reasons Why Cryptocurrency Is So Popular

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Cryptocurrency has been one of the hottest topics of discussion for the last few years. This is why most people know what it is and are willing to invest in it right now. However, you might not know that cryptocurrency is thriving across the globe.

Especially when the COVID-19 debuted last year, many investors turned to bitcoin (and other cryptocurrencies) as an investment option. Today, there are multiple reasons why cryptocurrency is growing and is here to stay. So If you’ve been looking for the top reasons behind the massive growth of this currency, you’ve come to the right spot. 

Read on to learn five reasons why cryptocurrency is booming.

Fees Are (Typically) Negligible

One of the primary reasons behind the massive success of cryptocurrency is low fees. Bear in mind, the varying payment options on the web entail a certain deduction whenever a transaction is made. In contrast, when you deal in cryptocurrencies, the fee is typically small. Therefore, it is mindful of people to pay through cryptocurrencies and also rest assured about the safety of their payment.

Potential for Substantial Profits

Of course, another primary reason for people to put faith in crypto is for the chance to make substantial profits. Lots of people who invested a few years ago are reaping incredible profits right now and crypto trading hasn’t cooled down in the last few years.

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Cryptocurrency is Decentralized

One of the biggest reasons to put faith in cryptocurrency is because it isn’t associated with any government. Because it is a decentralized currency, it isn’t controlled by any firm or government. So people willingly invest in it without any fear of demonetization. Therefore, this currency has the power to remain stable, even if the economic situation isn’t healthy. The potential that cryptocurrency is the safest option In the future makes it even more appealing to everyone.

Security is Paramount

In today’s time, with fraudulent practices on the rise, everyone wants to rest assured about the privacy of their information on the web. Because cybersecurity has become a major concern for everyone today, people are looking for a payment method that is safe and secure. Luckily, the availability of cryptocurrency breathes life into these goals. The security provided by cryptocurrencies is what has allowed many people to trust them blindly.

It’s Easy to Get

You don’t have to be a millionaire to get cryptocurrency. Contrary to popular belief, anyone can invest in cryptocurrencies. All you have to do is, look for a reputable exchange where you can buy crypto. A few years back, people might have thought about cryptocurrency as something hard to get. Now, it is all over the place, and anyone can invest in it. If this is your first time investing in this option, you will find the process to be customer-friendly and simple. 

Disclaimer: This is a sponsored post written by a third party. Readers should do their own due diligence before taking any actions related to any company, product, or service mentioned in this article. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product, or service mentioned in this post. 

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