The Central African Republic (CAR) has adopted bitcoin as its national currency, let’s explore the investment opportunities behind it

7 min readMay 7, 2022

Disclaimer:

This article is contributed by DMEX’s community volunteers. This article consists of personal opinions and/or analyses of the DMEX project. None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy.

In September 2020, El Salvador became the first country on this planet to adopt Bitcoin as its legal tender, allowing Bitcoin to be used in any domestic transaction, from daily grocery purchases to paying governmental taxes. Now, the Central African Republic (CAR) also made the same move.

On 27 April, CAR’s presidential office announced that the country has officially adopted bitcoin as its legal tender. Thus, it has become the first country in Africa, and the second in the world, to recognize Bitcoin as legal tender, alongside the CFA franc. The exchange rate between the cryptocurrency and the FCFA will be freely determined by the market.

Bitcoin: A strong competitor to the traditional monetary system

At present, the world’s prevailing fiat currency is still issued by central banks. Before paper cash came along, gold was the world’s universally accepted currency. Gold and silver are almost naturally inflation-proof, they provided a good equal value exchange medium to facilitate the flow and preservation of wealth for mankind.

For a long time in history, the issue of banknotes always required gold as the underlying collateral. This mechanism has been effectively maintaining the value of the currency and the stability of the financial system during this time. However, in 1971, President Richard Nixon ended the dollar’s convertibility to gold, ushering in a new era in which fiat currency can be issued indefinitely, which poses a potential risk for inflation. Fiat money has the convenience and portability that gold does not have, but one problem that comes with unbridled over-issuance is inflation. This may also be the direct reason why the Central African Republic and El Salvador, both sovereign states, insist on using Bitcoin as fiat currency.

In short, people have suffered from inflation for a long time.

Bitcoin, on the other hand, is the opposite of paper money, similar to gold, but much more convenient. It is also known as “electronic gold”. The total number of bitcoins is 21 million and cannot be over-issued. The way they are produced is by using the PoW mining mechanism, which consumes a lot of electricity, so the cost of mining bitcoins is high. It currently costs around $20,000 to mine a bitcoin, and the price on the secondary market is currently over $40,000.

Bitcoin’s aggregate limit coupled with other advantages equivalent to fiat currency seems to have inadvertently revolutionized the fiat currency system. Why is there a possibility of a revolution in the fiat currency system? Because there are flaws in human creation, the biggest flaw in fiat money is that it cannot circumvent inflation.

Satoshi Nakamoto, the creator of Bitcoin, began by positioning Bitcoin as an ideal peer-to-peer electronic cash system, designed to be in line with the trends in money, and also made more secure than ever thanks to the addition of asymmetric cryptography, and the fact that Bitcoin, which exists as data, only needs to carry a string of private keys in order to complete transactions.

In terms of trends in cryptocurrency, Bitcoin fits into its trend profile. For this, I call it an accidental product of an inevitable trend. And as a product of an inevitable trend, it has a very significant and undeniable potential for growth.

Blockchain technology started out in finance, due to the nature of the technology. In other words, the reason why Bitcoin has shown to be revolutionary to fiat money from the start is largely due to the properties of blockchain technology, which is a decentralised ledger, rather than being created to replace fiat money in turn, and the creation of something to replace something is more creative than the creation of something to replace it inadvertently.

And that’s the point of Bitcoin’s existence: it becomes a mirror of the fiat currency system, a constant warning of the serious problems caused by inflation. Bitcoin and fiat money is an oxymoron, but can be united at the height of their role as human currency. Just as the Central African Republic has made bitcoin legal tender alongside the franc (FCFA), allowing the two systems to coexist without a mandatory “one size fits all” is still a gradual process of exploration.

The best way to obtain bitcoin at the lowest cost is by mining

The adoption of Bitcoin as a fiat currency in the Central African Republic and El Salvador is undoubtedly a huge boon to the crypto industry as a whole.

The release of this information alone, which has generated a worldwide buzz, has completed a global user education for Bitcoin and indeed the crypto industry. Whether you are in the financial industry or not, no matter what colour you are or what country you come from, you have heard of “bitcoin”, “mining” and “cryptocurrency” at one point or another. etc.

There are only two best ways to really get bitcoins: buying them on crypto currency exchange or mining them.

As mentioned above, the cost to mine a bitcoin is around $20,000 and the price on the secondary market is currently over $40,000. Obviously, the best way to acquire bitcoins is by mining.

The essence of mining is to get bitcoins at a much lower cost.

The process of providing services to the Bitcoin network through a miner and thus receiving a reward of Bitcoins from the Bitcoin network. The cost of mining for bitcoins is much lower than the cost of buying bitcoins directly from the trading market. According to the financial return formula, the monthly return on mining is 9.3579% and the annualised return is a whopping 112.2948%. Here’s why investors are flocking to mining in droves.

Mining Power NFT is the best crypto mining method for average users

In the 10 years since the birth of Bitcoin, the mining industry has become scaled up, professional and standardized. The monopoly of the “mining hegemon” on computing power has kept the later ones away. DMEX (dmex.finance) has launched NFT mining, which is perhaps the most suitable way for ordinary users to participate in mining.

What is Mining Power NFT and how does it work? What is the liquidity?

Mining power NFT is an asset that is decentralised and encapsulated by DMEX based on the Erc721 protocol for mining power assets such as BTC. In layman’s terms, NFT is digital mining arithmetic, which has been encapsulated by the miner. The user does not need to buy a mining machine and participate in the operation and maintenance of the NFT, the NFT corresponds to the same equity mining arithmetic. For example, DMEX currently sells NFT, 28.9 USDT/T, 180 days mining cycle, excluding the platform’s 5% management fee, all mining revenue during this period goes to the user.

DMEX currently supports both HECO and BSC chains, and users can participate in bitcoin mining by simply entering the DApp “Mining Power Marketplace” and subscribing to the corresponding amount of arithmetic, with “T+1” settlement, i.e. you can get BTC earnings the next day after subscribing. Due to the decentralized operation mechanism, all operations are done on the chain, which is also more secure and efficient.

What if a user withdraws in the middle of the day? The NFT can be listed and sold in the “Power Shop”, which allows for the complete transfer of Bitcoin power. It is also worth mentioning that DMEX also incorporates a number of DeFi applications such as pledge lending, term finance and aggregated mining, allowing for more diversified returns on arithmetic and arithmetic assets.

In the long run, bitcoin mining returns are much higher than speculative returns. Therefore, my advice to Bitcoin “believers” is always “it’s better to speculate than to buy coins, and to buy coins than to buy arithmetic”. The market opportunity for DMEX arithmetic mining is that it offers individuals a more “neutral” way to invest, with a lower threshold than building your own mining farm, lower risk than short term operations, and lower cost than buying at market price; it also allows mining farms to share the cost and risk and get a more generous cash flow.

If you are a bitcoin “believer”, DMEX’s mining power NFT is absolutely a great choice!