Technology
How to Invest Safely in Digital Assets
Over the past few years, digital assets such as Bitcoin have seen an astonishing increase in popularity. Much of this can be attributed to the growing list of innovative use cases and benefits offered by these virtual currencies and their underlying blockchain technology.
Some of the widespread use cases of popular cryptocurrencies include:
- Bitcoin — Access to fast and secure financial services to all users worldwide.
- Asset-backed tokens — Grant ownership to a real-world physical assets such as gold and real estate.
- Ethereum — Facilitates building and deployment of decentralized applications (DApps).
- Stablecoins — Provide stability in a highly volatile crypto asset markets.
- IOTA — Powering the future of the Internet of Things (IoT).
Despite some digital currencies offering wide ranging use cases, the majority of people still generally view crypto assets as investment vehicles and stores of value. If simply looking at the statistics, cryptocurrencies have appreciated significantly in price over the last few years and investment in them is very attractive to not only retail investors but even large investment managers like Ark Invest are proponents and publicly traded corporations such as MicroStrategy, Tesla and SpaceX now hold Bitcoin on their balance sheets
Bitcoin, the leading cryptocurrency, has maintained an average growth rate of 87% year-on-year since 2015 — over 100% growth in value was recorded between 2020 – 2021. Thus, it is not uncommon to see people buy bitcoin and wait for it to increase in value to make profits.
As the popularity of digital assets increases and they continue to receive significant attention, more people are increasingly getting exposure into the space. New investors are taking the leap by investing in crypto assets, with a lot of people choosing to buy bitcoin and other crypto assets.
However, just like any other investment, crypto investment poses its own set of risks and challenges — and if not careful, investors can lose their money. Many people are investing in crypto without being knowledgeable on how to keep their investments safe.
Before investing in crypto, all investors must have sufficient knowledge on how to keep their investments safe. Take the time to learn the common safety pitfalls and how best to avoid them.
Below are the top must-know tips to start investing safely.
Research Exchanges
Cryptocurrency exchanges are platforms that facilitate crypto trades. They allow customers to trade cryptocurrencies for fiat currencies or other crypto assets. Exchanges are the entry point for crypto investment and it is extremely important to choose the right one when entering the market. Currently, there are over 200 listed crypto exchanges available in today’s market.
When choosing the right crypto exchange, some fundamental features to watch out for include the location of the exchange and the country’s crypto restrictions, ease of use, the exchange services and support, security features, transaction fees, volume, and liquidity, etc.
Make sure you make properly research before choosing an exchange to use. Look into the exchange’s history, check whether it has any history of security and financial breaches. Get reviews on the exchange from the community and seek the advice of experienced investors.
Beware of fake crypto exchange platforms. It is recommended to stick to reputable and recognized exchanges. For fast and secure crypto transactions, check out reputable global crypto exchange platforms such as Remitano.
The platform features a host of interesting options that enables smooth crypto transactions. Users can buy bitcoin in South Africa through the peer-to-peer channel, swap with other cryptos, make extra income by investing using the Remitano invest option, and much more.
Remitano – the global peer-to-peer marketplace is also currently developing its native token, RENEC, to improve the quality of services delivered to customers, reduce transaction fees and ensure secure and swift transactions. While RENEC is still in the development phase, Remitano has provided an amazing opportunity for old and new Remitano users to earn FREE RENEC.
Understand the Project
Before diving into a crypto investment, it is highly advisable to take time to understand the crypto asset you are planning to invest your money in. Cryptocurrency projects, just like any other business project aim to solve relevant problems. Crypto projects with sound fundamentals, clear use cases, and realistic goals are likely to thrive in the future. Those types of project are good prospects and have potential to provide a good return on investment.
Carry out detailed and in-depth research on any crypto project before investing in it. Read the project whitepaper, understand its use cases, check what the community is saying about the project — this will give you an idea of the issues or highlight strengths and weaknesses. Check the project’s development activity, the exchanges that the crypto token is listed on to ensure its market is liquid, check the total coin supply, circulating supply, and market capitalization, etc.
Avoid investing based on hype and never invest based on FOMO (fear of missing out). This is no substitute for proper research and sensible assessment of risk potential and an understanding of what you are investing in.
Choose the Right Wallet
So, you have decided on the crypto asset you wish to invest in and you have chosen the right exchange to make the purchase. The next thing is to transfer your holding to a secure wallet for safe storage. Knowing the right crypto wallet is one of the most important steps to guarantee safety on one crypto investment. After you learn how to buy bitcoin, you have to store it in a secure wallet, otherwise, you risk losing your investment to digital theft.
Choosing the right crypto wallet can be a daunting task. There are hundreds of crypto wallets in the market — each with its security features and unique level of safety. The category of wallets available includes hot wallets, cold wallets, software wallets, and hardware wallets.
Choosing a safe and secure wallet is very important and should not be overlooked. Make sure you properly research when deciding on the type of wallet to store your crypto coins. Make sure you know the difference between each category of wallets available, understand their strengths and weaknesses before choosing the most appropriate one for you.
Consider such things as – Is the wallet easy to use? Does it have a backup feature? What are the security features? Is the wallet provider transparent on how they operate? And lastly, is the wallet or provider reputable? All these are fundamental questions to seek answers to before choosing a wallet.
Also, ensure you are protecting yourself from online theft by safeguarding your wallet key and password. Safeguard your wallet by incorporating a two-factor authentication system. Beware of scam mining platforms, fake giveaways, shady ICOs and many other scams. All these make you vulnerable and put you at risk of losing your investment.
Diversify Your Investment
Investment 101 — diversify your investment portfolio. This does not only hold true when it comes to crypto investments but all other asset types.
Cryptocurrencies are inherently volatile, and there is always a potential for a market downtrend. This makes diversification a good investment strategy in crypto. By spreading your investment, you are not only allowing yourself to profit on multiple fronts but also reducing the risk of losing all your money if a particular asset becomes unfavourable.
There are over 1000 crypto projects available in the market – each offering their own unique crypto token. You don’t necessarily need to only buy Bitcoin but can also purchase other assets such as Ethereum. Do not put all your eggs in one basket! Instead, hedge your bets through diversification. This will help mitigate the risk of digital currency investing.
Do ensure you do in-depth and detailed research on the assets you wish to invest in. With proper fundamental and technical analysis, you can find some good crypto projects with great prospects.
Understand Your Risk Tolerance
While there is no definite rule on the amount to invest in cryptocurrency, it is recommended that you always invest what you can afford to lose. In crypto investment, you win some and lose some. With this in mind, always invest within your limits. Understand your risk tolerance and invest accordingly.
By allocating investments in alignment with your risk tolerance, you are potentially mitigating losses.
What is the future of crypto trading in South Africa? Find out if crypto will gain more popularity or be subjected to stricter regulations by the South African government.
Article by: Heath Muchena
By Dr. Diane Karusisi, CEO, Bank of Kigali and Dr. Reda Helal, Group Managing Director – Processing, Africa and Co-Head Group Processing, Network International (Image: Supplied).
One of the visible signs of a growing digital economy is its flourishing initiatives for financial inclusion and financial literacy. Rwanda recognizes financial inclusion as a crucial component for realizing its development and economic prosperity and is a remarkable example of a country that is introducing such programs to aid in setting up a vast digital economy, which are increasingly gaining international recognition. The country has set an ambitious target to achieve 90% formal financial inclusion by 2024.
Building inclusivity by involving microfinance institutions, savings and credit cooperatives, and mobile network operators, as well as enabling interoperability in digital payments, play a critical role in ensuring accessibility for populations that have historically been unbanked and rely on cash-based transactions.
Digital transformation
Traditionally, Banks and FIs feel enormous pressure to grow their digital payments penetration in a landscape that is radically different from even five years ago. This pressure is accentuated when Fintechs and wallet operators are added to the mix. Everything from regulatory requirements, a competitive landscape and consumer expectations to product innovations has upended the “business as usual” outlook for digital payment providers. The industry is fraught with challenges that payments leaders must carefully navigate.
Financial institutions are increasingly recognizing the importance of digital transformation and access to data. A legislation on the protection of personal data and privacy that was passed in October 2021 serves as a foundation for enabling trusted and secure domestic and international data flows and maximising the economic and social benefits of data-driven technologies, such as artificial intelligence (AI), for businesses and individuals in Rwanda.
The Bank of Kigali is an interesting example of a financial institution that has transitioned from traditional banking processes and payments to a structured digital platform. Embarking on a digital journey four years ago, the bank introduced several measures including internet banking and a mobile app, ISO standardization, and cyber resilient systems tuned to ensure the safety of customers’ data while enabling digital transactions through mobile phones.
Internet penetration in Rwanda stood at 30.5 percent of the total population in January 2023, with 4.25 million internet users. Incidentally, the ownership of smartphones in Rwanda stands at 26.7 per cent among men and 21 per cent in women respectively, according to the 2022 Rwanda Population and Housing Census, with the number of mobile phone users standing at 11.7 million in June 2023. Mobile phone penetration of 87 percent has consecutively increased the interest in digital payment solutions.
With the surge in mobile usage and e-commerce within the country, it is natural for banks to respond to the momentum and strengthen their digital economy payment services. The Bank of Kigali, for example, sought the advisory services of Network International (Network) to understand how to enhance and structure their product offering to cater to evolving customer behavior.
Network has been at the helm of accelerating digital transformation and has extensive experience in revolutionizing digital finance in the region with a deep understanding of digital payment offerings and technology usage. Network, using generational artificial intelligence and machine learning technologies, as well as market knowledge and data utilization, helps the Bank generate informed business decisions to refine their services proposition in accordance with consumer spending trends.
Threat landscape
In a rapidly evolving digital payments landscape, the threat of fraud looms large. According to TransUnion Africa, digital transactions in financial services surged by 12.2 per cent during the first half of 2023, and the alleged rate of suspected digital fraud attempts for transactions from Rwanda in financial services increased 252 per cent year-over-year (YoY) – the highest rise among industries analyzed. The Rwanda Investigation Bureau reported 254 cases of cybercrime involving up to RWF 416 million in 2021. While fintechs and other new stakeholders in the environment pave the way to superior banking services, they also ensure to bolster their systems with strategic analysis and secure data management systems to counter sophisticated fraudulent activity.
In this regard, Network supported Bank of Kigali with an authorization strategy with detailed analysis focusing on authorization diagnostic, data and fraudulent transactions. Based on the findings of this analysis, Network provided recommendations to aid the Bank in improving operational efficiency, reducing risks, and accelerating growth.
Advanced tools and technology leave no room for error or vulnerabilities, in an environment that is seeing a growing dependence on mobile wallets, digital-only banking platforms, and contactless payments, which fosters adoption of digital payment solutions between merchants and consumers. This security allows for convenient access to digital payment services which include remittances, timely purchases, e-commerce and small businesses promotions, insurance payouts and more.
By enabling innovation and operational efficiency for financial institutions, Network International contributes to government-led financial inclusion initiatives and supports the sustainability of commerce among the masses.
Lisk Chief Project Officer, Dominic Schwenter (Image: Supplied).
With nearly a million developers, a flourishing cross-industry entrepreneurial mindset, and a remarkable surge in blockchain adoption, Africa’s ability to lead blockchain technology impact is undeniable. Yet, technology entrepreneurs face barriers like limited access to finance and expert mentorship. Lisk’s Blockchain Incubation Hub intends to solve that issue.
Lisk is a fast and scalable Layer 2 (L2) network secured by Ethereum. As a member of the Optimism Superchain, Lisk provides builders and users some of the cheapest fees possible in the Ethereum ecosystem (currently sub 1 cent) and is actively contributing to the larger Superchain mission of onboarding the next 1 billion people to Web3. Lisk’s strategic decision to focus on emerging markets stands as a testament to its commitment to innovation and inclusivity. By prioritizing these regions, the team acknowledges the transformative potential they hold for the global community.
Dominic Schwenter, Chief Project Officer at Lisk, speaking of the incubation program, said “As an established infrastructure project, that has long focused on making Web3 technologies more accessible to builders and users around the world, we fully understand the tremendous opportunity the African continent represents for the future of the blockchain industry. By working with established partners such as CV Labs and its VC pillar, CV VC, we intend to bring our mutual excellence to support African pioneers who harness ingenuity to empower their communities. Blockchain is the engine for propelling local economies across the continent and we are well aware of the great quality of the developer community in Africa. There’s no one better to solve challenges than local developers, founders, and entrepreneurs“.
CV Labs is a renowned blockchain accelerator and ecosystem builder within the Web3 space. CV Labs is a business pillar of CV VC, the Swiss headquartered blockchain venture capitalist. Lisk and CV Labs both originate from the world’s most mature blockchain hub – Crypto Valley. Each has local and active teams on the ground in Africa, committed to harnessing Africa’s ability to drive the future of the web – one that enables data transparency, new economies, and, most of all, a better way of interacting and transacting for Africans.
Gideon Greaves, MD of CV VC Africa, said “Our experience in creating interconnectedness among our African and global portfolio companies is a bedrock for their growth. As Africans ourselves, we are very excited to empower the Lisk Blockchain Incubation Hub with our ecosystem pillar CV Labs, leveraging local insights and global understanding for maximum impact. Importantly, CV VC’s investor-focused curation will support the appropriation of grant funds to ensure projects with impact and utility succeed”.
African nations are among the strongest adopters of cryptocurrencies, utilizing them both as a store of value, payment, and exchange purposes. Concurrently, the technology behind crypto, blockchain itself, is increasingly important in other ways for Africa due to its immutability which can address longstanding issues such as corruption, lack of transparency, and inefficiencies in sectors like finance, supply chain, and governance.
Builders on blockchain technology can enhance trust, promote financial inclusion, enable secure transactions, and streamline processes, particularly in regions with unreliable infrastructure and weak institutions. Additionally, blockchain can support individuals by enabling access to financial services and property rights, fostering their socioeconomic growth, and unlocking new opportunities.
Despite restricted global funding, technology ecosystems in Africa are emerging, and 15 African countries feature in the Top 100 Global Ecosystems. As Africa accounts for nearly 20% of the global population and a median age of 18.8 years, the continent’s youthful demographic presents a potent force for innovation. While 77% of VC funding in Africa comes from outside the continent, The Lisk Blockchain Incubation Hub is committed to enabling African entrepreneurs to achieve self-fulfilling revenues and new funding sources by becoming market-ready with viable products that meet African needs.
EMURGO Africa, the investment and commercial arm of Cardano in Africa, today announced the launch of EMURGO Labs, a dedicated development entity for emerging Web3 technologies. The Labs is designed to support the growth of established and nascent Web2 and Web3 organizations. EMURGO Labs is set to spearhead the digital transformation across borders, leveraging the transformative power of the Cardano blockchain.
This will will serve as the central hub for fostering the growth of both established and burgeoning Web2 and Web3 organizations throughout the region. By leveraging the unparalleled power and potential of the Cardano blockchain, EMURGO Labs aims to empower innovation, facilitate cross-border expansion, and contribute to the overall expansion of the global blockchain ecosystem.
“The launch of EMURGO Labs marks a significant step forward in our mission to unlock the transformative potential of blockchain technology in Africa, Middle East and GCC,” said Ahmed M. Amer, CEO of EMURGO Labs. “Through comprehensive support services, strategic partnerships, and industry-leading expertise, I am confident that EMURGO Labs will become the premier destination for Web3 ventures seeking to thrive in this dynamic region” added Amer.
EMURGO Labs is dedicated to delivering a broad spectrum of services, meticulously designed to meet the evolving needs of the digital era, enabling organizations to seamlessly migrate from Web2 to Web3 while also enhancing and expanding the capabilities of already established Web3 entities.
- Blockchain Solutions Development: Partnering with global enterprises, startups, and accelerators, EMURGO Labs is at the forefront of investing in and developing groundbreaking blockchain solutions with real world use cases
- Custom Software Development: Tailored software solutions are crafted to drive digital transformation, propelling enterprises into the future.
- UI/UX Design: With a focus on user-centric design, The Labs ensures intuitive user experiences and sleek interfaces for Cardano blockchain applications, setting a new standard in usability and aesthetics.
Aiming to engage a broad spectrum of stakeholders, from Web2 and Web3 startups, banks, and large corporations to governments and the wider business community, The Labs is strategically positioned. By appealing to investors, blockchain enthusiasts, media, and policymakers, it is poised to become a pivotal player in the global blockchain ecosystem.
