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
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.
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Nigeria is ranked as Africa’s largest country with the most crypto traders and ranks third globally. The country accounts for the largest volume of cryptocurrency transactions outside the United States. In the last six months, it has been recorded that about 35% of the Nigerian population has traded cryptocurrency.
As encouraging as these numbers may be, Nigeria, as an environment, has been very unfriendly to cryptocurrency and its related aspects. Last year, the Central Bank of Nigeria ordered all commercial banks and lenders to stop transactions or operations in cryptocurrencies, citing a significant threat to the country’s financial system.
The ban on cryptocurrency in Nigeria was big negativity to the Nigerian youth, especially knowing that over 50 million of the population are involved in cryptocurrency. During this time, a lot of crypto trading platforms were shut down in the country. Also, many bank accounts suspected of dealing with cryptocurrency were locked, including their funds.
Even today (as of May 27, 2022), any bank transaction with a description or notes of “crypto,” “bitcoin,” “P2P,” or any crypto-related words will be locked away alongside the account(s).
The unfriendly treatment of cryptocurrency in the country is alarming. In the plight of making a positive solution, the community led to adopting systems where crypto traders could trade cryptocurrency without involving the bank.
Top 4 Problems Nigerians Face When Dealing with Cryptocurrency
Where to Buy or Sell Cryptocurrencies
Today, finding the right crypto trading platform that works for you significantly can be frustrating. Many cryptocurrency exchanges came into existence to aid in safer cryptocurrency transactions in the country. In this plight, some fraudulent platforms were made in disguise to exploit money from crypto investors. How would Nigerian crypto traders know which platform is genuine or not? With some checklists for selecting the best crypto exchange in Nigeria, you will be given key guidelines on how to choose the best place to sell bitcoin in Nigeria.
Speed of Transactions
A fast crypto transaction is important as the speed of cryptocurrency may block. Most times, transactions take hours to complete. Ideally, crypto transactions on regular crypto trading platforms take between 10 minutes to one hour. Surprisingly, some take over 5 hours. However, a few crypto transactions can take less than five minutes, depending on the app. In cases where we need transactions done quickly, or we accept crypto payments for your business, how do we intend to confirm payment before allowing customers to take their products? Should the customer wait for hours?
The speed of transactions has been a damaging factor for most Nigerian crypto traders. This has been a reason why many Nigerian companies find it difficult to accept cryptocurrency as payment options for their businesses.
High and Inconsistent Fees
Crypto transaction fees are another issue many Nigerians face. To really compare the best options for you, you have to look at the fees before and after conversion. What are the withdrawal fees, processing fees, and receiving fees,… These fees cause a huge discouragement in crypto trading in the country.
Limitations
It is saddening that many Nigerian crypto traders cannot make transactions because many of these crypto trading apps have put some limits on how much they can withdraw, receive, buy or sell. This breaches the purpose of cryptocurrency. Cryptocurrency has made it easy for people to send money from one place to another without a barrier. Why should I not be able to receive my funds because it is below your limit for withdrawal?
Limitations have made many Nigerians lose interest in cryptocurrency or lose their cryptos.
These factors, alongside many others, have caused the trading of cryptocurrency in Nigeria very difficult.
How Breet Solves Some of the Issues Nigerians Face in Cryptocurrency
Breet is an OTC crypto exchange platform that allows users and businesses who simply want to receive crypto and get a flat equivalent of their coin to convert their crypto to cash money immediately.
With Breet’s over-the-counter system, you are saved from the hassle of boring explanations of what and how crypto works and tedious illustrations of cryptocurrency market charts. Breet enables users to securely convert and withdraw their crypto coin to cash money in less than five(5) minutes without the use of peer-to-peer trading or any third-party agent.
Breet is a revolutionary new way to convert and withdraw your crypto coin without the need for peer-to-peer trading or any third-party agent. With just one click, you can have cash money in hand within five minutes.
With Breet, you can sell your cryptocurrency in less than 5 minutes. This is an incredible feature on its own, meaning businesses can now accept cryptocurrencies as payment options without having their customers wait for hours to confirm payment.
Breet is also completely free. There are no hidden charges, no withdrawal fees, no processing fees and no receiving fees. There are zero charges with Breet. Breet’s free usage solves the issue of high and inconsistent charges for many Nigerian crypto traders.
There is no limitation to how much you can receive or withdraw on Breet. You don’t have to have about 10,000 Naira worth of cryptocurrency before you can withdraw. You can even withdraw as low as 100 Naira with Breet Exchange.
Breet is simple, free and certified. There is not much sugar coating to tell before believing that Breet is, arguably, the best crypto trading platform in Nigeria currently. The incredible reviews on the Breet app give perfect evidence.
What more do you need? If not, a crypto exchange that makes crypto transactions easy and makes people happy. You should become a Breet user by downloading Breet mobile app available on all Android and iPhone devices.
The much-anticipated transition of the Ethereum network from proof-of-work (PoW) to proof-of-stake (PoS) consensus is finally taking place. The adaptation of PoS has always been the plan and a vital part of scaling Ethereum by future upgrades. However, abruptly shifting to PoS can pose significant technical and community challenges that are not as simple as using PoW to achieve network consensus. Having said that, what exactly are PoS and PoW?
Proof of Work
Proof-of-work (PoW) is a consensus algorithm that allows for the secure, decentralised verification of transactions on a blockchain. In a PoW system, miners are responsible for verifying and committing transactions to the blockchain. During the verification process, miners compete against each other to solve complex cryptographic puzzles. The first miner to solve the puzzle is rewarded with cryptocurrency, and the transaction is added to the blockchain.
Reasons To Shift From Proof of Work
The Ethereum ecosystem has evolved at an astounding rate in the last year. This growth was primarily due to a significant emergence and explosion of NFTs and Decentralised Finance (DeFi) initiatives. While the change-over was imminent, some factors to be considered for the same are:
The PoW consensus protocol requires users to utilise significant computational power to validate transactions and add new blocks to the network.
Users who devote their computational resources to the shared ledger are miners.
These miners are rewarded with Ether tokens in exchange for the computing power they have supplied to the network.
With PoW consensus, Ethereum takes up to 113 terawatt-hours of electricity in a year. According to Digiconomist, it is more than the total electricity consumption of the Netherlands per year.
The current Ethereum transaction with PoW consensus takes up energy equivalent to the consumption of one week of energy of an average US household.
With so many downsides to its cap, PoW has many advantages, which is one of the main reasons it has been a reliable consensus for so long. The PoW consensus has been robust and secure all these years. But the consensus can be utilised by a cryptocurrency with a massive valuation and relatively simple use case, such as the bitcoin. With the amount of energy and power involved, it becomes difficult for individuals to meddle with a high valuation asset.
Proof of Stake
The consensus protocol Proof-of-stake (PoS) has been introduced to address the issue of over-mining. Proof of stake (PoS) is critical to understand because it could eventually replace the proof of work (PoW) consensus mechanism that is currently used by most cryptocurrencies.
“PoS is a way to achieve decentralised consensus without using energy-intensive mining. It is an alternative to the more common proof of work algorithm. With PoS, a cryptocurrency’s blockchain is secured by its token holders who are required to lock up their tokens as stake and not by miners equipped with powerful hardware. It’s an energy-efficient, cost-effective and therefore, a popular choice for crypto giants like Ethereum,” states Dev Sharma, CEO of Blockwiz, a crypto marketing agency.
In contrast to PoW, in which the individual who completes the mathematical proof first is rewarded with new coins, with PoS, no new coins are created.
Benefits of Proof of Stake Consensus
Proof-of-stake introduces several enhancements over the PoS mechanism:
Improved resource proficiency – you don’t need as many energy mining blocks.
Minimal entry barriers, lower hardware requirements – Even if you don’t possess top-tier hardware, you still get ample opportunities to participate in the creation of blocks.
More excellent resistance to centralization – PoS would imminently facilitate the generation of more nodes.
Staking facilitates the operation of a node. It does not necessitate significant expenditure on equipment purchases or resources, and if you lack the ETH token to stake, you cannot participate in staking pools.
Staking consensus enables reliable sharding. Shards enable Ethereum to generate new blocks simultaneously, leading to enhanced throughput of transactions.
In a PoW mechanism, sharding the chain would reduce the amount of energy required to modify a particular network section.
In a Nutshell
Proof of stake (PoS) is a type of algorithm used by cryptocurrencies to determine who gets to create new blocks on the blockchain. PoS works by requiring users to lock up some of their currency in a smart contract called a stake. In return, they are given the right to validate blocks on the network and earn rewards.
The advantage of PoS is that it doesn’t require the massive energy consumption that PoW does. This non-dependency on massive energy utilisation makes it more environmentally friendly. It reduces the risk of centralisation since few users would be able to control the majority of the currency. Therefore, it’s no wonder that Ethereum is making the much-anticipated switch.
CEO Michael Wu joined Forkast News to discuss crypto’s consumer adoption and what’s next for crypto.
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Managing Partner Annabelle Huang joined Economist Impact’s Asia Trade Week to discuss the future of crypto as payment in Asia.
Managing Partner Annabelle Huang joined Avalanche Summit to discuss the opportunities and challenges in DeFi.
Managing Partner Annabelle Huang joined Goldman Sach’s panel discussion on “Digital assets – Investing in the future” to celebrate International Women’s Day.
Managing Partner Annabelle Huang gave a guest lecture on DeFi and Web3 for the International Finance class at Singapore Management University.
Managing Partner Annabelle Huang joined the DIG FIN VOX podcast to talk about Amber Group’s move to Singapore and into retail.
CSO Dimitrios Kavvathas joined Blockchain Africa Conference 2022 to discuss institutional investment in crypto.
CSO Dimitrios Kavvathas joined FinTech Festival India at a panel discussion on “De-Fi – A better solution for peer-to-peer lending”.
CSO Dimitrios Kavvathas joined the World Blockchain Summit in Dubai at a panel discussion on “Fostering the global crypto ecosystem”.
Europe Managing Director Sophia Shluger delivered a keynote speech on digital wealth at Blockchain Africa Conference 2022.
Europe Managing Director Sophia Shluger joined the CryptoCompare Summit in London to discuss the building blocks of the new digital economy.
Europe Managing Director Sophia Shluger joined the FundFocus Europe 2022 conference to discuss the foundation for the widespread institutional adoption of cryptocurrency.
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Latin America Managing Director Nicole Pabello joined the Ethereum Rio conference to discuss the LATAM Ecosystem in the world.
Institutional Sales Director Justin d’Anethan joined EmergentX’s Annual Digital Asset Summit to discuss the institutionalizing of the digital asset industry.
Managing Director Ben Radclyffe joined Credit Suisse’s Asian Investment Conference to discuss the spillovers between crypto and equity markets.