Until some days ago, I thought “mining’’ was a term used to define actual digging in mines for metals.
Well, I got the shock of my life when I sat down with Ghana’s Cryptocurrency evangelist. It was an insightful session, perhaps we should ignore the warnings about cryptocurrency not being a legal tender in Ghana and think about world-wide-wealth instead. You did not hear that from me.
Meet IT Guru, tech evangelist and Cryptocurrency enthusiast, Derick Agyei. The cool and soft-spoken IT Manager at Primeval Media was interestingly not the least bit phased by what becries the world of Cryptocurrency at the moment. He in fact thinks, now is the best time to invest. You might ask,
“What is Cryptocurrency?”
According to Wikipedia, A cryptocurrency (or crypto currency) is digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrency is a kind of digital currency, virtual currency or alternative currency. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, which serves as a public financial transaction database.
Let me break this down a bit, back in High School, we were taught about asset and liability. Asset was said to be both tangible and intangible economic resource. As long as it is valuable or likely to produce value, it is considered an asset. So, even though you cannot touch them, they are assets, digital assets.
If you have a good understanding of how stocks work, you will get most of the logic behind this. You may have shares with Barclays Bank, of course you can touch every Barclays Bank building in Accra, but can you touch your shares with the bank? No you cannot, but you are aware, you even have proof to back your claim to the shares. You probably spend your waking hours in keeping up with the stock market just so you are certain your shares are still valuable or are growing in value. If you understand to this point, you deserve a Bitcoin.
How to become a Cryptocurrency owner?
Mr. Agyei said cryptos can either be mined or bought. He however explained that not all cryptocurrencies can be mined.
Cryptocoins like bitcoin can be mined. You will need the internet and a computer at least to be able to mine. He also said like stock, you can invest in cryptos; by buying when they are low priced, like now (“you should buy now, he hinted”) and you can sell when stocks rise. You can also trade with your mined coins.
Is it legal?
If you live in the part of Ghana where the sun shines, you should have an idea about the Bank of Ghana advising Ghanaians not to trade in Cryptocurrency. Yes, Cryptos, bitcoin in particular, is illegal in Ghana. Not like you will get arrested for trading in them, it means you are trading at your own risk. This is also the case in a number of countries that have outlawed the currency. They include Bolivia, Ecuador, Nepal, China and Africa’s Morocco.
Derick Agyei thinks it is neither a bad nor good idea for the country to have outlawed Cryptocurrency. As he explains, Africans would much rather observe things they are not familiar with before joining the bandwagon. It is our nature to be careful… especially with our money. In his words, “Cryptocurrency is a relatively new technology as far as Africa is concerned, and we are always late to Technology. Especially when/if we do not understand the implication.” He continues, “ Also, I think the government is taking into consideration the security issues with crypto. They are likely waiting for the technology to be accepted worldwide, especially by the international market.”
I cannot say if this is good or just a complex Africans generally have to deal with. Sometimes, fear of the unknown/being too careful, may be a deterrent to your success.
The other day, A cyberheist at a little-known virtual currency exchange helped wipe billions of dollars off the value of bitcoin and other digital currencies. It begs the question, why cryptocurrecency? What singles it out when it still stands the same risk or maybe even more than the average means of making money in Africa?
Mr. Agyei first explained how the cyberheist was remotely possible in the first place.
“Cryptocurrency is fueled by blockchain” he said. You might want to know how this concerns us and how it answers the question in all of our hearts?
In layman’s terms, without blockchain, you cannot mine or even trade in cryptocurrency. And yes, you got that right, you need the internet to create a network of computer systems, which in turn create the block chain. So that is how the internet comes into the picture and that also explains how online theft comes into the picture.
Word on the street and as we learn during our conversation with Mr. Agyei, it will seem the strongest motivation behind trading in cryptos besides its value, is its power over inflation. The currency is limited in quantity, thus functioning more like precious metals (Clearly, it does not matter where you mine. At the end of the day, mining is mining, I guess).
In Lionel Shriver’s 6th January article, Why cryptocurrency is the answer, he says, “Imagine a secure international cryptocurrency whose steady value was not subjected to deliberate, systematic decay, whose supply was strictly limited, whose coin was universally accepted, and whose production was beyond the control of the state. Even if the investment couldn’t be expected to appreciate in the slightest, I’d put my every last farthing in such a currency in a heartbeat.”
In the preceding paragraph, he said, “Hilariously, even the Bank of England is now considering generating its own digital currency — which Mark Carney would prefer to use only for transfers between central banks, but which many of the governor’s colleagues would like to market directly to consumers. I say ‘hilariously’, because a Bank of England Bitcoin would be linked to the value of the pound. Great. Can’t wait.”
Fellow Ghanaians, if the Bank of England which has not bothered to “concern” itself with cryptos is considering a venture in digital currencies, what are you waiting for?
Derick Agyei after issuing a disclaimer that he is no financial analyst, (however hints that now is the best time to invest and you will not be doing yourself a disservice by investing in Cryptocurrency), advises that you…
Do the following to secure your cryptos:
- Secure your password. Never share it with anyone.
- Ensure you have a 2-factor authentication (2- FA) on your account. This notifies and requests a verification via SMS or google 2-FA each time there is a log-in on your account.
- Keep your token or coins in an offline wallet or hardware wallet like ledger nano.
- Each time you mine or purchase new coins, transfer them to your offline or hardware wallet.
*Disclaimer: This is not a financial advice. Do you own research and make your decision as it best concerns you.*