The nation state, no matter the variety or age, has always been obsessed with controlling the purchasing power of its citizens, most certainly to the downside. This is still more so with respect to Nigeria which is severely affected by chronic inflation. Bitcoin puts an end to such an urge so that you can easily take this power back.
And in this guide we explain in the most practical of terms how to do that.
A Brief Overview of Available Options
According to a survey published by the market research firm Statista, over 30% of Nigerians have used or traded digital assets (Bitcoin and altcoins) by now, making Nigeria one of the leading nations in terms of Bitcoin adoption. It is the biggest cryptocurrency market in Africa, and thus there’s no lack of options available to would-be Bitcoin buyers in this country.
So let’s make a quick analysis of how to buy bitcoin in Nigeria now. There are a few avenues available for Nigerians today:
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global exchanges (Binance, Luno)
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local exchanges (NairaEx, Quidax)
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remittance systems (BitPesa)
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instant swaps aka exchangers (Remitano)
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Bitcoin ATMs
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p2p marketplaces (LocalBitcoins, Paxful, Bitpapa)
Global exchanges are by far the most widely used method of buying crypto across the board, given their huge daily trading volumes. However, to buy Bitcoin with Naira (NGN), any such exchange should support trading of this currency against Bitcoin (a trading pair like BTC/NGN) or anything that can be used as a bridge (for example, USDT).
Case in point, Nigeria is not supported by Coinbase according to this list, so if you wanted to buy Bitcoin with Naira at Coinbase, you are out of luck here. The good news is that Binance, another major player and Coinbase’s competitor, supports NGN and allows you to trade it against USDT, with which you can then buy BTC.
On the other hand, Luno, a London-based cryptocurrency exchange primarily active in Africa and Asia, gives you the option to trade NGN directly against roughly half a dozen cryptos (see here for the full list of supported trading pairs). The downside, though, is that there are issues with depositing NGN, so your mileage with this exchange may vary.
Another option to buy Bitcoin directly with the national currency is to use local exchanges such as NairaEx, one of the most popular outfits in this country. The exchange supports bank transfers and Nigerian debit cards. Its major limitation consists in a rather small number of available cryptocurrencies (even though it supports Perfect Money).
For those who don’t want to trade crypto on a regular basis and just need to buy or sell Bitcoin for Naira once in a while, a number of exchanges that support Naira also offer instant currency conversion services, via a web form or with a mobile application (Remitano).
It’s possible to purchase Bitcoin with BitPesa. It is a remittance system that enables money transfers globally using Bitcoin. To purchase BTC on BitPesa, you will have to create an account there and deposit Naira into it via a bank transfer. Once your transfer is confirmed, you can buy BTC and withdraw the coins to your wallet (here’s a quick howto).
According to Coinatmradar, there are 2 Bitcoin ATMs in Nigeria, both located in the country’s largest city Lagos. With these, you can buy Bitcoin using your bank card. Be aware, though, that Bitcoin ATMs charge a hefty 5-10% fee per transaction. On the plus side, this is probably the best answer to the question of how to buy bitcoin with debit card in Nigeria (provided you happen to live or stay in Lagos).
Peer-to-peer (p2p) marketplaces allow people to trade crypto directly with other users. A number of these marketplaces such as LocalBitcoins, Bitpapa and Paxful equip Nigerian users with a wide array of payment methods that are not available elsewhere (for example, Chipper Cash). It should be noted that many major cryptocurrency exchanges offer both orderbook-based trading and p2p exchange.
And that takes us to the choice of the exchange platform one might want to use to buy Bitcoin with Naira in Nigeria.
Decentralized Marketplaces vs Centralized Exchanges
For an established crypto user, the choice of the exchange platform to trade on usually comes down to deciding between a centralized exchange and a decentralized p2p marketplace. In general, the latter allow more leeway than the former by directly connecting the buyers and sellers. Moreover, you are typically not required to go through a painful identity verification process on a p2p marketplace.
If you want to buy Bitcoin on a regular exchange, you first need to make a deposit in your local currency, usually via bank transfer or payment card. In practice, it means that you effectively lose control over your money, even if temporarily. Exchanges, big and small, routinely make headlines for losing the funds of their clients due to hacks or outright scams.
To buy Bitcoin on a p2p marketplace, you don’t need to deposit fiat into your account. You make a direct money transfer to the seller’s account outside the marketplace so in no case the service can grab your money. Indeed, it would make no real difference to you if it was for the malicious seller to rip you off.
Peer-to-peer marketplaces shine their brightest at preventing these types of fraud.
When you open a trade to buy Bitcoin on a p2p marketplace, the seller’s coins are first moved to the marketplace’s escrow account. After the seller receives his due, he releases the coins and they are deposited into your account on the platform.
If the seller refuses to do this (for whatever reason), the marketplace itself will release the coins into your account after you have proved that you kept your end of the bargain and did actually pay him. In this manner, a p2p marketplace protects both the seller and the buyer from ill intent of either party.
The p2p marketplace Bitpapa takes this even further by implementing the ratings system. Within this system, any suspicious behavior is immediately tagged by the marketplace users. All you need to do is check the rating of your would-be Bitcoin seller. If other users were not quite happy with their trades with him, you would do better by finding another seller.
The good news is that Bitpapa now fully supports Naira, and by following a simple setup, you can buy Bitcoin with Naira here as well. The steps are:
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registration on marketplace
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protecting account (optional)
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finding best sell offer
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executing a trade
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withdrawing coins (optional)
Let’s now look deeper into each of these steps and get the hang of how to buy Bitcoin with Naira on Bitpapa.
Registration on Bitpapa
To sign up with the marketplace, you will need to have a working email account and then come up with a strong password. Bitpapa starts with a dashboard (Dashboard), where you get by following the official link (bitpapa.com). Once there, click the Sign up button:
In the Sign-up form, enter the password and email address, then click Sign up:
To activate your account, follow the link from the email delivered to your inbox. After activating the account, you should be able to log in to Bitpapa:
Hint: You can change the currency of the available balance by double-clicking it (from Naira to US dollar and back to Naira)
Protecting your account
The marketplace strongly recommends that you protect your account by enabling 2FA and setting an anti-phishing word. These options are available under Account settings -> Security. Click on the User icon in the upper right corner of the Dashboard, choose Account settings from the drop-down menu, and then click Security tab:
2FA with Google Authenticator enables one-time passwords in addition to your static password, while an anti-phishing word is used by the marketplace to sign emails that you may receive from the service.
Here you can also submit your identity documents for verification and confirm your phone number. These steps are not required, although some sellers may choose to trade only with verified buyers.
Finding best offer
If you want to buy Bitcoin, you don’t need to do anything else and can start looking for best offers right away – just click Buy on the Dashboard:
Hint: Emojis under the users’ name show their rating on the marketplace so that you can quickly check the reliability of the seller. A smiling face represents positive feedback, a frowning one negative. Trade only with those users who have the highest score of positive feedback.
To buy Bitcoin with Naira, choose the currency in the third field of the Filter form and click the Buy button on the right side of the selected seller:
In the form that comes up, enter the amount of Bitcoin you want to buy and then click the Send a trade request button:
The seller receives your request and the trade is officially open. Please pay attention to the payment window set by the seller. This is the time period within which the trade is expected to be finished.
Trade execution
Once you hit the Send a trade request button, the required amount will be subtracted from the seller’s balance and locked in escrow for the duration of the trade.
The trade chat becomes available:
Hint: Before you send the payment, you can cancel the trade by clicking the Cancel the trade button. In that case the escrowed coins are released back to the seller, so don’t press this button when you have already made the payment. You won’t be able to get your money back unless the seller agrees to send it back to you.
In the chat window, you need to ask the seller to post payment details (in this case Chipper Cash). After you receive them, make the payment and then click the Payment sent button:
The seller checks the payment and if everything goes smoothly, he releases the coins from escrow, which are instantly credited to your Bitpapa account:
The trade is finished and if you choose so, you can now leave feedback and withdraw the coins to an external wallet.
Please note that the marketplace doesn’t charge any trading fees, although you may be charged some amount by the payment system you use to transfer funds. However, the seller should receive the amount as specified by the trade terms. It is the buyer who is expected to pay these fees.
You can withdraw your Bitcoin at any time. For this, click the wallet icon in the upper right corner of the Dashboard and select the Send button for Bitcoin in the drop-down menu:
In the form that opens, enter the address of the wallet for withdrawal, then set the amount and click the Send button:
Because the minimum amount of Bitcoin you can buy on Bitpapa is pretty small, there may be nothing to receive after the network fee is subtracted from this amount, which the screenshot above clearly demonstrates.
But don’t worry, you can sell as little.
Trading on Bitpapa
Bitpapa lowers barriers for entering the cryptocurrency market, but you may still have to deal with high network fees if you decide to withdraw the coins. The fees can make withdrawals not economically viable. But you may not have to. As easy as you can buy crypto on Bitpapa, you can sell it here too. And in that case you can exchange bitcoins for fiat without having to move either Bitcoin or Naira outside their natural habitats, so to speak.
Active cryptocurrency trading as opposed to passive holding may be the answer to both Nigeria's inflation woes and Bitcoin’s intense volatility. Why not take advantage of that?
