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Should I Get Bitcoin Right Now?

MONEY makes the world go round, and for good reason! To amass a considerable amount of this generally accepted means of exchange and measure of value implies that you possess considerable economic power —you can get whatever you want because the price can always be met. Over time, money has come in various forms: cut pressed iron, salt, cowrie, gold, printed notes, and copper coins.
Should I Get Bitcoin Right Now

Today, money has a new and emerging form. A digital form of money has appeared in the last decade; it is simply referred to as cryptocurrency. A cryptocurrency, according to Wikipedia, is a “digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership”. In other words, it is a valuable resource generated and stored on computers. Some eventually become very valuable over time and in high demand, that’s the case with Bitcoin. 

Bitcoin became the first decentralized cryptocurrency when it was released in 2009. This type of digital money is not managed by any single person or central bank. So, the currency is bought and sold without any particular regulatory body acting as an intermediary. There is also a level of security for each transaction, no particular financial action can be duplicated neither can the personal information of those involved be released. There are several millions of people who have adopted Bitcoin as a means of exchange across the world because of its speed and secure nature. The value of Bitcoin has also grown at such an astonishing pace in just over a decade of its existence. A Bitcoin was worth about $5 in March 2011, it’s worth about $50,000 in March 2021. Bitcoin has undergone several hundred per cent increases in value, time and again, in the handful of years when more people have opted for it as a payment option. This ever-doubling soft cash has become a major investment interest for millions of people around the world, even in Nigeria.

While several people have bought units of a Bitcoin and sold at a ridiculous amount of profit over the past few years, there have been numerous worries about the cryptocurrency equally raised. There is a concern about the extreme volatility of cryptocurrencies such as Bitcoin —the value of a Bitcoin is never stable for too long. Critics believe that there is no true value in a Bitcoin beyond what people are willing to accept and this makes it unreliable. So, there are speculations about Bitcoin reaching a crescendo, falling steeply, and its holders or investors eventually plummeting to bankruptcy. Bitcoin has also been condemned for the tendency of criminals to take advantage of its anonymity and secure transaction channels. Truly, Bitcoin has been used in some illegal transactions from money laundering to outright theft of funds. Bitcoin exchange points have also been hacked repeatedly and several coins worth tens of millions of dollars have been pilfered by these hackers. Furthermore, holders of Bitcoin must keep their unique wallet address and key safe at all cost as any circumstance that leads to the loss of either means that whatever amount of Bitcoin kept becomes permanently inaccessible. 

As of 23rd February 2021, the Central Bank of Nigeria prohibited deposit money banks and non-banking financial institutions from facilitating activities in cryptocurrencies such as Bitcoin. The CBN Governor, Mr Godwin Emefiele, expressed the bank’s disapproval of Bitcoin and other cryptocurrencies based on a number of reasons. He explained that the Central Bank of Nigeria is trying to protect Nigerians from the opaque and untrusted transactions of cryptocurrencies. Aside from its use for covert arms purchase and fraudulent activities, Mr Emefiele stated that the use of unregulated cryptocurrencies like Bitcoin is unlawful in Nigeria because the CBN Act (2007) empowers the Central Bank as the only issuer of legal tender for financial transactions in the country. He further claims that cryptocurrencies like Bitcoin easily allowed people to launder money and evade taxes. However, despite the warnings about Bitcoin being a high-risk asset, many Nigerians believe in trading Bitcoin rather than trading the Naira in Foreign Exchange for the more obvious reasons. The Naira is in a bad place while Bitcoin and a couple of other forms of crypto are promising exponential growth. It is a very tempting invitation to prospective traders, even for a few months, given Bitcoin’s track record in the past ten years. If you are to go by the Central Bank of Nigeria, “Cryptocurrency is not legitimate money” because it is not made by the CBN neither is it regulated by the CBN or any other Central Bank. But if you are looking for a way to bypass the downside of a devalued currency and the complications of what should be a simple intercontinental transaction, then you want to buy Bitcoin.