What’s Cryptocurrency and how does it work

Here’s everything you need to know about cryptocurrency.

cryptocurrencies-bitcoin, Litecoin, Ethereum, Ripple, Dogecoin, Electroneun

In my earlier article, I discussed the  use of one of the cryptocurrency in Nigeria. So, what is this cryptocurrency?

Cryptocurrency is a form of digital money just like the naira and dollar, but instead of being printed in paper; it is digital. It can be exchange with naira and dollar and you can be spend online in payment and purchase of items.

Cryptocurrency is designed to be secured, and in many cases, anonymous. It is a currency associated with the internet that uses cryptograph. Cryptography was born out of the need for secured communication in the Second World War. In cryptography, legible information is converted into almost untraceable codes, to track purchases and transfer. In this digital era, it has evolved with mathematics theory and computer science to become a way of secured community information and money. However, its application is better experienced now in exchange or transfers of value.

How does cryptocurrency work?

Cryptocurrency uses decentralised technology to let users make secured payment and store money without the need to use their name or go through a bank. Central bank does not have control of the use of cryptocurrency unlike the printed paper currency. Transactions including purchases, bond, stocks and other financial assets can be traded and exchange using the decentralized technology with existing money.

How can I buy cryptocurrency or bitcoin

Users can buy currency from brokers then store and spend them using cryptocurrency wallet. You can earn cryptocurrency online and buy with you money in form of money exchange. In Nigeria, Bitcoin exchangers are more than 30 companies. Some bitcoin exchangers in Nigeria are Nairaex, Etradexchange.net, and Naira4dollar.

What are the most common cryptocurrencies used in Nigeria

The most common cryptocurrency traded in Nigeria are;

  • Bitcoin
  • Ethereum
  • Litecoin
  • Ripples
  • Bitcoin paxful
  • Electroneum
  • Dogecoin

Bitcoin is split into Bitcoin gold, Bitcoin core and Bitcoin cash. Bitcoin is the king of all cryptocurrency. It is the first and the most commonly traded cryptocurrency till date. The current price is valued around $17,000 – $19,000.

Ethereum – currency token used in the ethereum  blockchain. It is second most popular after bitcoin and valuable cryptocurrency. The current price is valued around $7500.

Litecoin –this currency is most similar in form to bitcoin. However, its payment and processes is faster than bitcoin. This allows many more transactions than bitcoin. Litecoin and Monero can be save in the same wallet –Coinomi

Ripples – This is another distributed ledger system that was founded in 2012. Ripples can be used to track more kinds of transactions, not just of the cryptocurrency. It has been used by banks including UBS.

Paxful coin – Bitcoin in Paxful wallet, this coin thrives well in Nigeria.  It may be peculiar to Nigeria.

How do I store or keep my cryptocurrency

You have to create a wallet. That is where you save your money (cryptocurrency).

What are most common digital wallets Nigerians Uses?

The most common cryptocurrency wallet Nigerians used are;

  • Blockchain wallet
  • Paxful wallet
  • Coinomi
  • Coinbase wallet (online bloker)
  • Electroneum wallet

How do I make money with cryptocurrency

Making money with cryptocurrency is an idea that simple and straight forward if you want to learn it. I recommend you read this: How to invest in Bitcoin, Litecoin, Ethereum and other cryptocurrencies in Nigeria – Complete Guide


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