Is Bitcoin Really Immune to Inflation in Nigeria?

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Monday, June 03, 2019   /  05:30PM  /  Sponsored Post  / Content & Header Image by Coin Cola

 

In 2015, the naira continued to plunge from its initial price of 160naira to a dollar at the start of the year to 500naira to a dollar by the end of the year. The new government’s fiscal policy had contributed to inflation due to the ban on the number of dollars that can be gotten from banks. This caused a shortage in the number of dollars in circulation leading to disparaging exchange rates between the official price and the real value in the black market. 

Importers were perplexed as the only way to get dollars is via the black market which due to the scarcity of the dollar has increased its exchange rate by over 200%. There was panic in the Nigerian market due to the rising inflation as the country is an import-based economy with 80% of what it consumes imported from overseas.  

The price of goods and services increased and the naira lost value leading to a loss of purchasing power for Nigerians. The Nigerian government was able to arrest the situation by 2016 but by then the country was already into recession. 

This is a classic real-life example of how fiat currency is heavily reliant government decisions and policies. The bad decision of the Nigerian government to implement strict fiscal policies without taking into cognizance the negative effect om the economy led to sharp inflation of the naira. 

 

Why Bitcoin is Immune to Inflation in Nigeria

1.      Bitcoin is a Decentralised Currency

Bitcoin is the opposite of the naira as it is a decentralized currency, which means that there is no central bank or institution controlling its policies. 

The coin movement is dictated by the market forces with all users getting a share in the direction taken by the cryptocurrency. Since this is the case, events such as regional conflicts, changes of government or policies do not affect the value of the coin. This is the major reason why Bitcoin has gained increasing acceptance around the world as many users feel safe with a coin that has no government interference. 

It is no surprise that citizens of developing countries such as Nigeria have taken totrading with Bitcoin in recent years. More information available here on how to convert gift cards to bitcoin and get a Bitcoin Bonus. 

 

2.     Bitcoin Has a Specific Total Number of BTC Produced

Bitcoin unlike traditional fiat currency (Naira) has a specific number of BTC that can ever be produced which is (21,000,000 BTC). This makes it difficult for the coin to become an inflation coin, unlike the naira which the government can decide to print more copies. 

It is a well-known fact that when there is a lot of money in circulation, inflation is bound to occur. With Bitcoin this is avoided as the total number of circulating BTC is known making the coin stable and resistant to inflation.  When you make a trade on thebuy Bitcoin In Nigeria Page you can get 0.0001BTC immediately. 

 

Why People Purchase Bitcoin in Nigeria

As a Nigerian reading this article, you could be skeptical about buying Bitcoin due to the lack of popularity within the mainstream media. However, Bitcoin is one of the digital assets people seek to own in this age of information technology. Here below are some reasons why Bitcoins are purchased.

 

1.      Low Transaction Fee For Cross Border Payments

A major challenge that Nigerians face when purchasing goods or services from foreign merchants is the total costs of conversion of Naira to the accepted currency and bank charges. You could be requested to pay as much as 25% in charges for goods and services which can be avoided using Bitcoin. Bitcoin eliminates third-party agents in transactions and uses exchanges in its stead which means that transactions fees are all but eliminated.

 

2.     Good Source of Investment

Bitcoin is a good source of investment for the long-term as the price of the coin has shown upward movement in 2019. You could invest in Bitcoin as an alternative to saving the money in the bank as the cryptocurrency tends to move upwards in value.

Bitcoin trading is another alternative where you make daily transactions within the crypto market.

 

3.     Quicker Transactions

Bitcoin uses blockchain technology to facilitate transactions leading to fast and secure transactions between users. Sending or receiving cross border remittance could take several hours or days using the traditional financial method. But with Bitcoin, such transactions are completed in minutes and within a secure environment.

 

Bitcoin Trading in Nigeria

There are several Bitcoin trading platforms that Nigerians can use to purchase Bitcoin. One of them is CoinCola - a dual trading platform that enables users to trade gift cards as well as cryptocurrency. The exchange platform has gained a sterling reputation over the years and is one of the few platforms that allows local payment methods for Nigerians.  CoinCola, has one of the lowest transaction fees in the crypto market (0.7%) and provides a secure environment to buy and sell Bitcoins. For more details visit the website HERE


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