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Top 5 best cryptocurrencies to buy in Nigeria

Franklin Izuchukwu
By Franklin Izuchukwu
A cryptocurrency Analyst analysing the crypto market.

Many believe that the 2008 global economic crisis gave birth to cryptocurrency even though the idea was floated long before the 2008 economic crisis.

People blamed the 2008 economic Crisis on the greedy actions of few individuals in government and financial corporations.

Thus the idea behind Cryptocurrency was to create an independent financial system devoid of government control.

Today, there are over 5000 coins or tokens in the cryptocurrency market. The demand to access the cryptocurrency market has been on the rise, and therefore there is a need to know the best cryptocurrency (coins or tokens) to buy in 2021.

Knowledge is power, and without knowledge, ignorance takes the lead. As a cryptocurrency investor and enthusiast, proper research on any coin or token is advised before buying and selling.

Clacified seeks to bridge the gap between knowledge and ignorance; the article will guide and provide a purview into the top 5 best cryptocurrencies to buy in Nigeria.

There are 4 important questions a cryptocurrency investor is expected to answer before investing in any crypto coins or tokens:

  1. What gives this coin or token value, or what is it used for?
  2. What is the market capitalization of the coin or token?
  3. What is the maximum supply of the coin or token?
  4. How many of these coins or token are already in circulation?

The economics of demand and supply comes into play in the stock and cryptocurrency exchange market. For example, whenever the market demand for bitcoins increases, the price goes up.

Still, if the supply of bitcoin increases without a corresponding increase in demand, the price will start sinking.

This analysis does not negate that other fundamental factors, like government crackdown, policies, and daily news, affect the cryptocurrency market.

For better comprehension read more about cryptocurrency, its associated terms and abbreviations here.

Note:

The cryptocurrency market is very volatile. It is highly unregulated and therefore prone to regular downward and upward spirals.

Below is a list of the top 5 best cryptocurrencies to buy in Nigeria.

Bitcoin is the defacto king of all cryptocurrency for now.

1. Bitcoin

Bitcoin is a decentralized peer-to-peer electronic transaction that is processed on a system of ledger called a blockchain. Bitcoin is the best cryptocurrency to buy in Nigeria because other cryptocurrencies are indirectly linked to the rise and fall of bitcoin.

Satoshi Nakamoto published the first Bitcoin's white paper in 2008, while bitcoin started circulating in 2009.

According to Coinmarket cap, Bitcoin has a market capitalization of over 7.2 billion US dollars as at press time.

One of the factors that made bitcoin valuable is how difficult it is to earn bitcoins. Bitcoin miners are expected to solve complex mathematical calculations and then receive a reward in bitcoin - this is how new bitcoins go into circulation.

Bitcoin's creators also implemented another feature to limit the supply of bitcoin. The total amount of bitcoin that bitcoin miners can ever mine is 21 million bitcoins.

It took about 4 years to mine half of the proposed supply of bitcoin. Still, it will take another 120 years to mine the remaining half. In economics, this is called a monetary policy based on artificial scarcity.

The potential to be scarce gives bitcoin its value, and the fact that the maximum supply of bitcoin is limited pushes cryptocurrency enthusiasts to buy and HODL more bitcoins.

The overall effect of the demand and supply is responsible for the huge market capitalization of bitcoin.

It s worthy to note that a total of 18,776,000 bitcoins are already in circulation as of press time.

During one of the conferences in June 2021, Twitter CEO Jack Dorsey told a group of cryptocurrency enthusiasts that he believes bitcoin will protect against currency devaluation and expedite funds transfer.

Jack Dorsey also confirmed to Twitter investors that bitcoin would be a big part of twitter's future.

In October 2020, Square announced they bought $50 million worth of bitcoin; fast-forward to February 2021, it appreciated to $253 million.

The Ethereum networks comes with more scalabilty than Bitcoin

2. Ether

Ethereum is a decentralized and open-source blockchain system launched in 2015. It is a cryptocurrency network that supports various cryptocurrency software.

The native cryptocurrency on the Ethereum network is called Ether, though people erroneously refer to ethereum as a cryptocurrency. Ether ranks as the 2nd best cryptocurrency to buy in Nigeria.

The Ethereum network is unique in comparison to Bitcoin, especially as a pioneer of smart contract execution. It is limitless and offers Software developers a platform to deploy other decentralized applications (DApps).

It supports the recent decentralized Finance (DeFi) and Non-fungible tokens (NFT), Ethereum Request for Comments 20 (ERC-20).

More than 280,000 ERC-20-compliant tokens have been launched on the Ethereum network; about 40 of these cryptocurrencies are among the top 100 cryptocurrencies by a market cap like USDT and BNB.

Ether is the second-largest cryptocurrency by market capitalization; it has a market cap of $25,545,874,379, one unit of ether is about $2,675 as at press time.

According to Coinmarket cap, 116,976,938 Ether coins are in circulation. Ethereum has no maximum supply. However, adequate precautions through a consensus are always taken before new Ether coins are released into circulation - to maintain the maximum number needed for adequate security.

On 2nd August 2021, ConsenSys founder Joe Lubin told Cointelegraph that NFT would turn into an enterprise with its own right.

The USDT coin serves as an intermediary between stabilty and volatilty in cryptocurrencies

3. USDT

United States Dollar Tether (USDT) is a stable cryptocurrency issued by a company called Tether. USDT is the 3rd best cryptocurrency to buy in Nigeria. USDT was founded in 2014 and is believed to mirrors the United States dollar in terms of value.

The purpose of the USDT coin is to bring stability to the high volatile market of cryptocurrency. During a market downturn, cryptocurrency investors may choose to store their cryptocurrency assets in USDT because, as a stable coin, USDT's value rarely fluctuates.

USDT also serves as a viable financial option for investors in developing countries like Nigeria where individuals lack access to foreign currency. USDT can provide a haven to save for countries with unstable economies or currencies.

According to Coinmarketcap, USDT is the 3rd highest cryptocurrency based on Market capitalization. USDT has a market capitalization of $61,988,949,804 as of press time.

About 62,000,121,094 USDT coins are already in circulation. There is no known maximum supply for USDT.

USDT parent company, Bitfinex, claims the cryptocurrency is pegged against the USD value, but many investors dispute this assertion. According to Bitfinex, the company maintains the USDT value by storing the same USD in cash, treasury bills, deposits etc.

New York Attorney General Letitia James led an investigation that discovered the claim made by Bitfinex about every USDT being backed by USD was false. Their asset included loans to affiliate companies contrary to popular belief.

The BNB coin is issued by the cryptocurrency exchange site Binance.

4. Binance coin

BNB is known as the Binance coin. BNB was launched in 2017 by Changpeng Zhao and He Yi. BNB is issued by Binance exchange, a top global cryptocurrency exchange site.

BNB is the native coin on the Binance chain. It was created to processes discounted trading fees on the finance network, but its application has surpassed the initial milestone.

BNB is also used as a payment option on Travala and to buy new coins launched on Binance smart chain network etc.

Binance exchange tops global cryptocurrency exchange by trading volume, thus provides a solid ecosystem for the Binance smart chain network.

During the BNB initial coin offering (ICO), Binance released a maximum supply of 200 million BNB into circulation. Binance uses 1/5 of its profits to repurchase and permanently burn the BNB in its wallet. According to Investopedia, Binance will carry out this operation every quarter.

As of press time, there is a maximum of 168,137,036 BNB in circulation, and the number will only reduce with time.

ADA's parent company, IOHT intends to implement the smart contracts execution on the Cardano network

5. Cardano

Cardano is a proof-of-stake blockchain platform founded in 2017 by Ethereum co-founder Charles Hoskinson. The Cardano coin called ADA is the defacto cryptocurrency on the Cardano blockchain network.

ADA ranks 5th on Clacified's list of top 5 best cryptocurrencies to buy in Nigeria.

Cardano's parent company, IOHK, has developed 3 unique products that run on the Cardano network. Atala prism, Atala Scan and Atala trace are viable products that users can use in agriculture, Education, Financial technology, etc.

Cardano seeks to overcome issues such as scalability and interoperability - major drawbacks faced by many cryptocurrency networks.

On 14th July 2021, IOHK announced that the company had completed an upgrade to allow smart contract executions on the Cardano network. This new development will lead to the implementation of DeFi and the building of DApps on the Cardano network.

As of press time, ADA has a market cap of $45,361,919,972 with over 32,106,825,804 ADA coins in circulation. ADA has a maximum supply capped at 45,000,000,000 ADA coins.

Conclusion

This article is only a guide for cryptocurrency investors. Many technical factors affect the rise and fall of cryptocurrencies. Fundamental factors also play a huge role.

Clacified advises that investors consider every possible scenario before buying any cryptocurrency.

There are many scam coins and tokens available in the cryptocurrency space today. Vigilance, proper research, and zero tolerance for greed are crucial to making the best decisions on buying and selling cryptocurrencies.