Here is How to Buy Bitcoin in Nigeria

Nigeria is a booming market for cryptocurrency right now, and here is how to buy bitcoin in the country using some of the leading platforms available.

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How to Buy Bitcoin in Nigeria

When it comes to the selling and buying of bitcoin, Nigeria is at the forefront having the highest Google searches for Bitcoin after the US and ranking top in peer-to-peer transactions. If you are interested in joining the current revolution and being well informed on how you can trade Bitcoin safely in Nigeria, please read on.

What is Bitcoin

According to Bitcoin.com, Bitcoin in the practical sense is money that exists in a digital form.

Bitcoin Price Highlights

The price of Bitcoin is the current price at which bitcoin is being traded. It is determined by the buyer and seller. Despite this, its price varies across exchange platforms such as Coinbase and Binance because of market inefficiencies.

Statista Data Grab

Within the past five years, Bitcoin has witnessed dynamic surges in its value rising to around $1,290 in March 2017, the highest ever it has been before then. This trend continued across the months getting to a peak of $19,783.06 nine months after on December 17, 2017.

Read Also: All You Need To Know About Making Money With Binance Peer-To-Peer Trading In Nigeria

Up till the year 2021, the price of Bitcoin continues to increase with surges and minimal decline along the way. On April 10, 2021, Bitcoin recorded its highest ever price to date some months after Elon Musk and Tesla announced their investments in Bitcoin peaking at above $60,000.

Though the value of Bitcoin in the crypto market suffered a crash to half this price in May 2021 due to rumors of Tesla selling its Bitcoin holdings, the price is still on the high side when compared to how it was a year ago.

The Features of Bitcoin

It is Decentralized

The very first and intriguing feature of bitcoin is its decentralization. This simply means that there is no central power or regulator as the case is with traditional currencies which are designed, issued, and managed by a central authority.

Transparent transactions

Bitcoin transactions are visible to everyone in the digital world of cryptocurrency though Individual Bitcoin assets are concealed to promote privacy and confidentiality which motivates positive trading.

Anonymity

It is to be stated here that the identity of users of Bitcoin remains anonymous and the chances of tracking transactions back to Bitcoin users are very minimal. This is to prevent online robbery or digital theft.

Fast transaction

When compared to other modes of transaction such as bank transactions, bitcoin transactions are faster.

Nonrefundable mode of transaction

Bitcoin transactions are a one-way mode of transaction. Any transaction made from a sender to a buyer cannot be reversed unless the buyer is willing to do so.

Digital Currency

Bitcoin is not a physical currency but a digital one. You can never carry a bitcoin in your purse or pockets in the form of notes or coins, but you can easily carry it on your phone or tablet.

Simple to use

Most of the time, to open and manage a bank account is quite tedious and long. This is not the case with a Bitcoin account. You can set up your account in a matter of minutes.

Value is determined by demand

The value or price of Bitcoin is not fixed like other assets. It depends on market dynamics. The value of Bitcoin is determined by the strength and volume of its demand.

How to Buy Bitcoin

If you are interested in buying Bitcoin in Nigeria and ready to explore the untapped benefits in the world of cryptocurrencies, there are different exchange platforms, brokers, and marketplace that can help you. Below is a guide on how you can go about this.

Buying Bitcoin on Binance

Binance is the biggest cryptocurrency trading platform on earth today, recording up to $2.46 trillion in May 2021 transaction volumes. The platform offers the largest trading base for listed crypto and offers the major trading pairs with leads like BTC, ETH, XRP, USDT, DAI, BNB and BUSD on the P2P front.

At present, to buy Bitcoin in Nigeria using the Binance platform will only be possible using the P2P platform it offers. Firstly, you need to register your new account using this process:

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           You need to sign up for a new account  and complete the KYC procedure
      

·        Your driver’s license, international passport or national ID card will be needed

·        You also need to link a bank account to your profile to use for the transactions

·        You will be notified if your application is successful, and you can start using your new account.

How to buy Bitcoin on Binance P2P  Platform

On the platform, log in to to your account, and navigate to the P2P page from your account dashboard.

  • Locate the  the P2P and express tab and click on your preference
  • With the express tab, the platform matches you with the available sellers on the platform with you deciding
  • transfer the funds to the seller and wait for at lest 15 minutes
  • You will have to click on payment made tab to notify the seller
  • Your BTC will show up on your balance after the seller confirms receipt of payment made.

Buying Bitcoin on the Coinmama Exchange platform

Coinmama as an exchange platform was founded in 2013 with the mission of making simple how Bitcoin (BTC) is traded. The platform has more than 2.9 million users in over 190 countries in the world. It also provides the platform for some users in selected markets to sell their Bitcoin.

How to open an account on Coinmama

  • Go to the sign-up page to create your account. Fill in your email in the allocated spaces as well as your country of residence to get started.
  • Thereafter, click on the verification link sent to your email

Verification

  • Complete the requested form to confirm your identity and safeguard your account.
  • Thereafter, you will be required to upload an ID to approve you for purchase. Choose the ID type you will like to upload based on your country of residence. Take a photograph of the front and back of your ID with your phone camera with all four corners visible and clear image and text, then upload them to your account.
  • Then, write “Coinmama” and date on a piece of paper. Hold the paper and the ID you’ve just uploaded and take a photograph of yourself. Ensure your face, ID, and paper note are visible. Then upload the photo to your account.
  • After successfully uploading, click to submit. Your form and documents will be reviewed by the verification team for verification. If everything is okay, you will be approved to buy Bitcoin online with Coinmama within fifteen minutes.

How to buy

  • Sign in to your account to buy bitcoin. Select the cryptocurrency (Bitcoin) you want to buy and the currency of your choice
  • Select the package of your choice and input your desired amount, thereafter you can tap “buy”
  • Input your selected third party wallet address
  • A confirmatory link will be sent to your email to confirm your wallet address, click on it if it is correct
  • After your payment has been approved and the wallet address confirmed, the coins will be immediately delivered to your wallet.

Buying Bitcoin on the Luno Exchange platform

Luno has been in the cryptocurrency industry since 2013 with transactions worth more than 14 million dollars. The platform has customers in over 40 countries.

Must-Read: FIVE CRYPTOCURRENCIES WITH MORE THAN 10,000% ROI IN 2021

How to open an account on Luno

First, you need to go to the sign-up page to create your account. Similar to that of Coinmama

Verification

  • Complete the requested form by filling in your first name, middle name, gender, date of birth, phone number address, city, and zip code. You can also click on the ‘I’ve confirmed my email’ option in the Luno app. After which you will be automatically verified with the submitted phone number and personal details.
  • If not, you will be required to upload a document for verification (driving license, identity card, or passport). Open the Luno app and sign in, tap Profile on the Menu, navigate to Settings, select Upgrade. The document is required to show your identity number, name, date of birth, and a clear photo.
  • You may also need to confirm your address. To get this done, you will upload a photo or an ID which contains your name, address, residency, and issue date. This ID must not be older than 3 months.

How to deposit

  • Open the Luno app and sign in
  • Select Wallets from the menu
  • Choose your local currency wallet
  • Select Deposit
  • Choose the method with which you’d like to top-up your wallet
  • And follow the on-screen prompts from there

How to buy

  • Verify your identity on Luno.
  • Deposit to your local currency wallet, once it reflects in your wallet, then you can proceed to buy.
  • Thereafter, you can simply tap the specified amount on the homepage screen to buy or specify the amount of your choice. Then pay or make use of Luno Exchange.

Buying Bitcoin on Coinbase

Almost all users begin their crypto journey through Coinbase. The platform has been in the cryptocurrency industry since 2012 with quarterly trade worth more than 335 billion dollars. The platform has more than 56 million verified users, 8,000 institutions, and 134,000 ecosystem partners in over 100 countries.

How to buy on Coin base

  • Sign in to Coinbase. Account creation and verification quite like Coinmama
  • Choose either Buy / Sell on the upper right-hand side.
  • Select the Buy field to choose the asset you’d like to purchase. 
  • Specify the amount you’d like to buy either in crypto or your local currency.
  • Choose your payment method.
  • Click Preview Buy to verify your purchase (you can always click the back arrow to make a change).
  • If your details are correct, click Buy to complete your purchase.

Buying Bitcoin on eToro

eToro is a social trading network founded in 2007. It is among brokers hosted on trusted brokers.ng. You need to register an account on the platform to buy bitcoin.

Opening an account involves:

Uploading a valid ID (ID Card or Passport) and a proof of address (electricity, water bills, etc.), through eToro’s platform. Approval takes less than a day.

To buy Bitcoin on eToro:

  • Select a bitcoin exchange or trading platform, in this case, the eToro trading platform
  • Ensure your account is verified
  • Deposit through your preferred deposit method and buy bitcoin fractionally.

Buying Bitcoin on plus 500

Plus 500 is a trading platform founded in 2008 which allows for the trading of cryptocurrencies among other commodities such as Forex and ETFs.

It is among the brokers hosted on trustedbrokers.ng. Though it is one of the main trading platforms in the United Kingdom, it is not open to customers from Nigeria.

Buying Bitcoin on marketplaces such as Localbitcoin

LocalBitcoins is an escrow service that serves as a crypto marketplace helping to match bitcoin buyers and sellers. Users are free to advertise trades for any payment method they choose. Below are five steps you can follow to buy bitcoin:

Step 1:  Register

Register an account with LocalBitcoins.

Step 2:  Search for advertisements

After registration, go to the main page, and search for offers.

Step 3: Select an advertisement

From the list shown, select offers.

Step 4: Pay the seller

Evaluate the offer and pay

Step 5: Mark payment complete

Click the paid button and the transaction will reflect in the wallet

How to store Bitcoin

In the same way money or cards are stored in a purse or handbag containing a wallet, bitcoins are also stored on the phone or computer desktop hosting a digital wallet whether web-based or on hardware.

Bitcoin Price Outlook

Though Bitcoin has struggled over the past few months, even falling by more than half in April 2021, many analysts that bitcoin may overtake the U.S dollar as the dominant form of global finance by the year 2050 which puts the price of Bitcoin at above $66,000 by the end of 2021.


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All You Need To Know About Making Money With Binance Peer-To-Peer Trading In Nigeria

Binance P2P platform gives sellers of crypto the avenue to meet buyers with no hindrance and fees. It is fast becoming the preferred way to trade crypto in Nigeria.

Nigeria is presently the second leading global center for online searches conducted for bitcoin after America according to recent Google data. The range of uses for cryptocurrencies in Nigeria includes remittance for imports, support for family and friends as well as settlement of other bills.

The unfolding scenario makes Nigeria a huge market for crypto service providers, and with Binance as a formidable global leader, we have set out in this guide all you need to know about Binance P2P, and how it works in Nigeria.

What is P2P trading?

When a trader and a seller get matched on a cryptocurrency trading platform with no intermediary taking custody of fees or value thereof, it is a Peer-toPeer setting at work. with Binance, users of the P2P platform are able to buy and sell crypto with ease using their wallets and bank accounts or agreed payment methods.

What to know before getting started?

  • You need to have a registered account
  • Provide KYC details like proof of ID, BVN, and a phone number
  • Binance holds on to the crypto in escrow till the seller confirms receipt of payment
  • The seller should not release the crypto without confirming that expected payments is received
  • A private messenger is available on the platform for ease of buyer to seller chat or to contact customer support.

All of these above safeguards are necessary to avoid sellers and buyers losing funds to fraud, and the process is credible if adhered to always.

How can you make money with P2P trading?

Any market where there are sellers and buyers offer a chance to make money, and Binance P2P platform is not different.

Many people are online and looking for ways to bypass the forex shortages in the country and cryptocurrencies are a formidable pathway. You can trade NGN, DAI, BNB, BTC, XRP, USDT BUSD and ETH on the platform.

1. Work with clear terms

On your sales page, state your transaction terms in simple and clear terms and be sure to abide by these terms. You can state:

  • Make payment to the recipient provided and send me an SMS
  • Or please send a private message after payment or send an SMS
  • Expected turnaround time is 15 minutes, please be patient

If for any reason you are not able to meet the terms, be prompt to communicate this to the buyer to avoid a dispute initiation.

2. Use a reasonable profit margin

For example, if BTC/USD is 40,000, selling at $40,500 will net you more buyers than using $42,000, this is as there are many buyers and sellers on the platform. Several transactions over a month can earn you up to $4,000 in fees instead of waiting for three months to make a single sale with a high margin.

3. In-demand payment methods are preferable

Whether it is you setting your terms or working with someone who does, you need to stick to in-demand payment methods. Do not make assumptions or vague descriptions.

Be bold to say, “Pay to XYZ Bank only” or ‘’Send cash with a money agent only”. Either way, the funds can only be sent to the account or recipient that you have provided.

4.Be friendly with helping new traders

On the platform, you are going to come across new traders, and they might not be familiar with the processes. If you come across one, be patient and provide some guidance. The Binance P2P platform has a private message function that is free of charge to use between sellers and buyers, you can message the buyer to make clarifications.

5. Be responsive

it is your personal duty to be responsive and make sure that you respond to enquiries in a timely manner to keep good ratings. If more buyers rate you poorly and line up complaints on your profile, you will lose your patronage and be out of business in no time.

How to become a verified merchant?

The process here is simple and you need to adhere to the requirements to be accepted:

  • Open a new account and be registered
  • Be KYC-compliant and at least 18 years old
  • Provide a utility bill as proof of residence
  • Have a fiat bank account in your name with at least $100 or its local equivalent
  • Complete and submit an application form
  • You also might need to shoot a small video, holding your ID card, and an inscription that is required of you in order to validate your ID.

With these steps completed above, you will be able to get an approval to become a seller in Binance P2P platform.

Are there risks in P2P trading?

There is a good chance to make money with the P2P platform and there are inherent risks too that are worth highlighting. The safeguards are also shown side by side.

  • Avoid losses as a seller by refusing to take your trades outside the platform so as not to fall prey to scams. Binance provides escrow account to house your crypto till you have confirmed receipt of funds
  • Take an additional step to log into your banking platform to confirm your buyer’s deposit to avoid releasing crypto when payment is not made
  • Use a second phone number different from your bank alert phone number as unscrupulous people can send fake alerts to your phone perpetuate fraud
  • If a payment claim is made by a buyer and it does not reflect in your account, you can file an appeal to get come information and customer support assistance.

Tips to get more trades

You can get more trades by using these tips:

  • Use your referral code and share on social media
  • Post the link to your seller’s profile on your social media pages or crypto-themed groups
  • Join the Binance Africa/Nigeria Telegram group and you can win some referrals there.

How to buy on Binance P2P Platform

Binance is a cryptocurrency exchange platform that was created in 2017. It also provides cryptocurrency users with wallets to store their cryptocurrencies.

How to open a Binance account

  • Go to Binance and click the “Register” button. 
  • Fill in your email address and select a secure password. If your friend gave you a referral code, you can also input it in the “optional Referral ID” space created.

Verification

  • Follow the steps given for verifying your account by clicking the code sent to your email address or mobile number.
  • You may also be required to upload an ID or document or level 2 identity verification. Please follow all the instructions given for easy verification.

Currently in Nigeria, the easiest way to buy Bitcoin on Binance is the P2P platform , which does not necessarily need you to make a deposit

How to Buy Bitcoin on Binance

Because of the regulations on cryptocurrencies trade by the Central Bank of Nigeria, a new way was devised by exchange platforms such as Binance to make buying Bitcoin easier. This new way is what is called Peer-to-peer transactions or P2P. It connects buyers to sellers directly with no transaction fee unlike other platforms on both app and website.

This method allows you to buy bitcoin from several sellers online. Below are the three steps to follow to buy your bitcoin successfully.

Step 1: Pick your preferred currency and payment method.

  • Click on the P2P section.
  • Select the Buy tab and the BTC crypto. Then click on the filter icon at the top-right part of your screen
  • Select your preferred method and currency. As a Nigerian, you are to select Naira and Transfer via Bank.

Step 2: Make transaction

  • Choose an offer from the offers displayed
  • Input the number of coins you want to sell, choose a payment method, and click on Buy BTC.
  • Thereafter, make a transfer to the seller’s account using the information provided before the time lapses. You may also chat the seller up.
  • Ensure that you send the money to the seller and tap on Transfer next.

Step 3:  Bitcoin transferred to your wallet

  • Click on Confirm. Avoid doing this if you have not made any transactions. (It is a violation of the P2P User Transaction Policy).
  • Thereafter, the status of the transaction will display pending.
  • After the seller can successfully confirm, Bitcoin will be transferred to your wallet.

Start Selling and Winning

You can start selling on the Binance P2P platform with all the insights provided in this guide. Be mindful of the safeguards, and you will be able to make a decent amount of income and ROI.

What To Expect From The Crypto Market In H2 2020

The crypto scene has been abuzz with upbeat signals as 2020 H1 came to a close. What does the H2 hold? Let us delve in here.

Photo by David McBee on Pexels.com

2020 has been an eventful year with lots of events having ripple effects on the financial markets and cryptocurrencies by extension occurring in rapid succession.

From the threat of world war 3 to the pandemic, these events have triggered wild movements in stock and commodities prices and cryptocurrencies have not been left out of these price actions as well.

Read Also: Despite The Marketplace Twists,Thorns and Thistles, Here Is How USDT Has Weathered The Storm

Going into the second half of the year, what can we expect to see? Below are some speculations:

Increased Adoption

Cryptocurrencies have come a long way from being considered a fringe technology. Just in the first half of the year, there was an additional 5 million blockchain wallets created, increasing the global number of cryptocurrency users from about 45 million to just over 50 million.

These wallets are held across various exchanges like Remitano and others. It is predicted that this figure will rise even more sharply as we commence H2. The utility, speed, security and seamlessness of cryptocurrencies and blockchain technology will attract even more people to sign up and get involved in the ecosystem.

Penetration into emerging economies

Emerging economies hold a lot of potential for the expansion of the cryptocurrencies market. Remitano, a crypto exchange created in 2014, seems to have realized this and have tailored its operations to capitalize on the possibilities in these markets.

With operations in countries like Nigeria, Cambodia, Vietnam, Cote d’Ivoire, Thailand, Tanzania and Zimbabwe, among others, it can take advantage of reaching a great number of unbanked or underbanked people.

Crypto markets will offer them the technology-enabled ease of transacting with cryptocurrencies rather than the regular fiat currencies. Remitano is also introducing an NGN wallet, based on the Nigerian fiat currency – the naira. This will make it even easier for citizens to purchase cryptocurrencies, and it is expected that this will be extended to other emerging economies before the end of 2020.

Launch of Facebook’s Libra

Despite all the controversy surrounding it, Facebook still seems on track to launch its cryptocurrency, Libra, by the second half of 2020. There has been a mixed reception to the idea with some people considering it a good idea and lots of other parties opposing it. Whichever side you’re on, Libra’s launch is something to look out for in the second half of the year. It will be interesting to see how it all plays out.

Adoption by more countries

China is said to be close to completing the creation of a national digital currency – an unprecedented step that will make cryptocurrencies even more popular, and perhaps, drive its adoption among other countries. The Chinese digital currency will likely be launched by the second half of 2020, and it is surely another event to look forward to.

Finally, we expect that the usual volatility in the crypto markets will continue into the second half of 2020, as major events like reopening and the American elections will swing market sentiments in different directions.

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The 10 Leading Stablecoins of 2019 and What You Should Expect

Stablecoins were the stars of the cryptocurrency firmament in 2018. Now, let us look at what the 2019 scene holds for them.

Bitcoin and Litecoin at the background

What is the leading stablecoin?

With the recent events in the cryptocurrency industry, investors are now seeking better ways of acquiring more gains by switching to more stable coins.

And, the recent ups and downs faced by cryptocurrencies especially in 2017/18, have positively impacted the rise of stablecoins.


Generally, stablecoins are cryptocurrencies with intrinsic values that are linked with fiat currencies such as the US dollar or other assets like gold.

They are more acceptable than cryptocurrencies such as Bitcoin because they appear to be more stable and reliable. They offer a price peg for various goods and services while still maintaining the properties of a store of value and a medium of transfer.


Currently, there has been an influx of stablecoins in the market with a few of them presently trending. Here are the top 10 leading Stablecoins in 2019.


Tether (USDT)


Tether token, which is among the most successful Stablecoins in the world, was initially issued by the Tether Limited Company and it’s backed up by the US dollars. 1 Tether is equivalent to $1.


The USDT coin was therefore designed to settle payments in any asset or fiat currency that’s convertible to the U.S dollar.

The Tether token is available for trading in various cryptocurrency exchanges such as GoCoin, Shapeshift, and Bitfinex among other crypto exchange platforms.


TrueUSD (TUSD)

TrueUSD is another successful US-based token. It was developed by a US-based Fintech company known as the TrustToken.

The TrueUSD was initially designed to enable more efficient daily to daily financial transactions and the institutional adoption of cryptocurrencies.

The TrueUSD is a fiat-collateralized cryptocurrency that is legally backed making all its transactions as much transparent as possible. Additionally, all the financial transactions of this token are verified and attested by 3rd parties.

Given its underlying technology and its centralized nature, the TrueUSD will indeed flourish more in 2019.

BaseCoin


BaseCoin is a cryptocurrency designed to maintain its price stability by reducing high volatility experienced by many cryptocurrencies such as Bitcoin and Ethereum. Its value is linked to the US dollar.

The BaseCoin token operates in a decentralized nature which makes it quite hard to verify how the market is adopting its tokens. Its data is majorly provided by 3rd parties.

MakerDao (DAI)

The MakerDao was initially launched in 2017 by the MakerDAO Company. Concerning the backing assets, DAI is unique as compared to other Stablecoins.

It uses a complex system of CDP- Collateral Debt Position, unlike other coins such Tether that is directly backed by the US dollar. The DAI token is supported with smart contracts that are designed to keep it stable.

Though the fact that the US dollar does not back the DAI coin still looks strange to many, significant investors such as a16z crypto fund by Andreessen Horowitz has shown considerable interest as it owns about 6% of DAI.

USDc (USDC)

The USD coin is a US-based startup launched by the Center consortium and Circle platform.

The USD coin is a promising coin that has shown much progress and is expected to grow rapidly in 2019. This coin is based on the ERC20 token protocol. 1 USDC is equivalent to 1 US dollar.

PaxoStandard (PAX)

PAX was initially approved on 10th September 2018 by the New York Financial Services Department.

PAX gets its monthly reports audited and published by Withum which is the leading American Audit firm.

Currently, PAX has gained favourable attention especially given the fact that it’s regulated and approved by the world’s first government.

Alchemist SDUSD

The NEO cryptocurrency Blockchain is the team behind the Alchemist. The NEO platform is decentralized and allows its users to issue the SDUSD tokens mainly based on user existing portfolios in the platform.

According to the NEO platform, the Alchemist token is designed to offer a solution to the rampant issues of volatility in the cryptocurrency ecosystem. The coin is expected to make significant progress in the year 2019.

Gemini USD (GUSD)

Gemini Dollar is among the most accepted and latest Stablecoins in the market.

It was an ERC-20 token, released on 10th September 2018. The coin was created and released by cryptocurrency exchange, Gemini, that’s owned by the Winklevoss twins and operates on the Ethereum Blockchain platform.

The Gemini dollar is another unique Stablecoin that’s independently audited by the BPM Accounting and Consulting regularly.

Carbon

The carbon Stablecoin is built on Hashgraph, and it uses smart contracts to maintain its stability. It works on the Ethereum Blockchain system.

It’s was created to reduce the emission of toxic gases in the atmosphere in order to preserve the environment.

The carbon platform brings together environmental-related entities such as carbon emitters, clean energy generation companies, and other parties.

Given the recent global concern for environmental preservation in the world, the carbon Blockchain project will definitely succeed.

EpayUSD (EUSD)

The EpayUSD is a 3rd party payment company launched by Epay. It’s linked to the US dollar where 1 EUSD is equivalent to 1 US dollar.

The Epay’s Global Remittance Network uses the EUSD as an accounting symbol designed to accelerate capital circulation and transactions.

Conclusion


The advancement of stablecoins in the cryptocurrency industry is expected to rise given the fact that they are more viable and useful as a currency as compared to other cryptocurrencies.

However, we shouldn’t forget about the issue of volatility which is the major issue affecting the advancement of the cryptocurrencies.

How Cryptocurrency Payments Are Reducing Transaction Costs Globally

One area that cryptocurrencies impacts the global stage is price reduction. Low transaction cost and faster payments make account settlement good to go.

Cryptonews Image

It’s not news to anyone who has been following the cryptocurrency trend that, while they have attracted lots of attention, they have also failed to penetrate our economies as well as some analysts expected they would.

Indeed, cryptocurrencies have run into several difficulties, putting them into the odd position of being household names, but not household items. That is, everyone knows what a cryptocurrency is, but most people don’t own any or know how to use them.


Yet while the cryptocurrency craze has brought few widely recognized improvements to our economy, there is one specific area where it should, as penetration grows, show a great improvement in most peoples’ lives.
That area is transaction costs.

High costs we ignore

Bank transactions are never free. Every single transaction that happens involving a bank, be it a debit/credit card purchase, a bank transfer, issuing a check, or even getting cash via an ATM, has a cost.

The allied cost can often be small enough for people not to notice or care, and in some cases the cost is paid by our counterpart, so we completely ignore their existence.


However, these costs add up. It might be a few cents here or there, but little by little, they end up making a dent on our finances – we just don’t notice. When we hear that it costs $10,000 to move $1,000,000, we assume that’s a rich people problem.

We don’t have a million dollars to move, so why should we worry if the rich are paying a lot? They have a lot, so it’s only fair.


Except that it’s not the raw numbers that matter. It’s the percentages.

Fortunes are made cent by cent

Now, let’s assume instead of the 10K example, I tell you that your bank charges about 1% per transaction. It’s little, right? What’s one dollar for every hundred you move? The bank has to make money, so it makes sense they’ll charge.


Yet it adds up. That means that if you move only a thousand dollars a month using your bank account – a small amount of money – you’re paying your bank $10 a month. Which amounts to $120 a year.


Reconsidering it yet?

Crypto to the rescue

Cryptocurrency transactions have been somewhat demonized by the media. While most claims against them aren’t false, some have been overblown or reported as inherent problems with crypto while being transient ones, results of the economy rather than poor design.


While cryptocurrency transactions can be slow – the Bitcoin and Ethereum networks both have but a fraction of the capability of Visa and Master Card – that might not be a problem for long. New blockchains are being currently developed with the aim of solving the transaction bottleneck.


As for the issue of value fluctuations – where the initial wave of worries about crypto transactions being expensive – crypto markets are stabilizing. And any cryptocurrency that enters widespread use will, by virtue of its widespread use, gain enough stability that day-to-day price changes won’t be huge.

Fairer costs at no cost

Let’s go back to the $1M example, since it’s good to illustrate just how much money you might be losing once all things add up – and let’s be clear: while you might not regularly move a million dollars, the average American moves more than a million dollars through their lifetime.


On the Bitcoin network, known for its scalability problem and slowness, you could move more than a hundred million dollars for the paltry sum of… ten cents.


That’s several orders of magnitude lower than those of a regular bank. As such, some of crypto’s early adopters have taken to performing their large-scale transactions through the blockchain, since whatever they lose from them taking longer, they more than make up on savings.


Not that they always take longer. Transactions inside a same bank are instant, but between banks – or countries – aren’t anyway.
The point is, using crypto you can go from 1% transaction fees to 0.01% fees.

Only one drawback…

While banks use percentages to calculate transaction costs, cryptocurrencies use a more lineal approach, usually tied not just to the amount of money but also to the current state of the blockchain.


This means charges move between smaller amounts, but depending on the blockchain they might have minimums to be paid. Over the Bitcoin blockchain, for example, the minimum amount for a transaction is ten cents.

This means that you might be able to move a hundred million for that much… but if you spend $5 on crypto for an ice cream, it’ll cost you that much, too.


Thanks to this, for now, cryptocurrencies remain a great option – for larger transfers. Their fees vary between ten cents and five dollars. This depends on the blockchain, the amount, and how busy the chain is at the time.


However, this should change. As the scalability problems are solved, transaction costs – and times – should halve. Eventually, we might see small charges for large transactions, and almost nonexistent ones for smaller ones, turning cryptocurrencies into the best way to save money overall.

Last Words


As for now, the writing is on the wall for many companies: Cryptocurrencies are a way to save money in transactions. Not only that, but they offer an alternative to dealing with regular banks, and can in some cases be faster than regular bank transfers.


It’s due to this that, while cryptocurrencies haven’t yet gained mass acceptation, several important parts of our society are actually dealing with them already. It’s just difficult to argue with a 99% reduction on transaction fees.