cryptocurrency

The 4 ways of buying cryptocurrency in 2022: Image: Adobe stock

The 4 ways of buying cryptocurrency in 2022

Bitcoin and other leading cryptocurrencies are estimated to continue to gain traction and acceptance.

cryptocurrency

The 4 ways of buying cryptocurrency in 2022: Image: Adobe stock

With the growing number of countries experiencing both high inflation and national currency depreciation, Bitcoin and other leading cryptocurrencies are estimated to continue to gain traction and acceptance.  This is due to the fact that cryptocurrencies, especially Bitcoin, are widely regarded as viable alternatives to fiat savings, with many pointing to their long-term value growth potential and broad availability. 

Across the African continent, Bitcoin is a favourite for value preservation among users.  Consider Nigeria, where the national Naira lost over 209% in value in just seven years. This catastrophic loss of purchasing power is just one of many factors which have deteriorated the population’s faith in fiat as a means of value storage and transacting.

Among the handiest and most accessible ways to get Bitcoin are: cryptomats, Peer-to-Peer exchanges, Centralised exchanges, personal transactions, and special legal financial frameworks.

Cryptomats

Cryptomats are more of a rarity in most countries. These devices work like traditional ATMs in that they allow one to quickly top up digital wallet balances. Cryptomats also tend to accept other cryptocurrencies as payment methods in addition to supporting certain features such as hard wallet connection ports. 

However, cryptomats are not widespread and therefore it is difficult to seriously consider them a convenient tool for purchasing crypto. Furthermore, the cryptomats have a tragic flaw in that many are unsecure. Should the device’s internet connection fail during a transaction or  any other technical failure happens the funds will be lost and the cryptomat operator will not be held liable.

Peer-to-Peer

Peer-to-Peer exchanges are well known worldwide and operate as intermediaries between users seeking to purchase various cryptocurrencies on individual terms. They often claim to offer the necessary exchange route and sometimes provide additional escrow services as an extra trust layer. Use cases include mainly exchange services that provide fiat on-ramps and cash-out channels. However, the frequent cases of fraud associated with P2P exchanges have significantly undermined the user experience and overall trust association.

Exchanges

Centralised exchanges like Binance or Huobi are convenient for those who want to work professionally with cryptocurrencies. These  platforms have huge liquidity, support, and additional trading tools. Centralised exchanges are also constantly subject to local laws and regulations, even international sanctions, which the platforms must abide by. Almost every centralised exchange is also legally required to file reports to their local governments, which has led to instances of user accounts and funds being frozen upon request from the authorities. In addition, due to their sheer size they are often the targets of cyberattacks as hackers set their eyes on  hundreds of millions of dollars worth of crypto and other held funds. 

Financial services

Lastly, there are legal and compliant financial frameworks like Embily which offer conventional bank-level services, low commissions, and live client support. These services allow the purchasing of cryptocurrencies legally through a simple, secure, and convenient web application. Embily also provides crypto bank cards, allowing clients to spend their cryptocurrencies in everyday life as they see fit. The service is currently partnered with both  MasterCard and VISA depending on the region. 

Key Takeaways

When deciding to buy Bitcoin or other cryptos, potential investors should always weigh the convenience against security of the process. Cryptomats are still very much being tested. If retaining anonymity and privacy is a priority, then Peer-to-Peer exchanges are an option if one is willing to sacrifice security. For those that refuse to settle when it comes to  security and convenience, special crypto services like Embily are definitely worth considering.