Indeed, the first impression is not always the last impression, at least, Nigerians have proven that with Bitcoin.
Bitcoin started gaining traction in Nigeria after the infamous Mavrodi Mondial Moneybox (MMM) Ponzi scheme of 2016, which promised a 30% monthly return on investment, both in fiat and Bitcoin. Many got scammed, and some found themselves in unthinkable debt after investing in MMM and other Ponzi and pyramid schemes that followed.
One would think that such a terrible first experience would make Nigerians hate cryptocurrency for eternity, the reverse was the case as the interest towards Bitcoin in the country continues to surge. In fact, Nigeria has become the number one African country with the highest interest in Bitcoin, according to an earlier report by Cryptopotato.
Another report published last year by The Chartered Institute of Bankers of Nigeria (CIBN), also revealed that Nigeria was one of the African countries with the highest number of new users of Bitcoin in 2018, despite several warnings from the Central Bank of Nigeria that Bitcoin is not a legal tender in the country.
So what’s the driving force behind the growing interest of Bitcoin in Nigeria?
Increased Crypto Education
Lack of education is one of the barriers preventing more people from entering the crypto industry and the Nigerian crypto space suffered from this back in 2016. However, things are fast changing in the crypto ecosystem in Nigeria. Crypto education is on the rise in the country. Meetups, conferences, podcasts, and social media groups are being set up every day to educate more Nigerians on Bitcoin and crypto trading.
Alternate Source of Income
Despite being the “Giant of Africa,” Nigeria is known for its high rate of poverty, thanks to its corrupt government. A 2018 report revealed that Nigeria had become the poverty capital of the world, with an estimated 86.9 million people living in extreme poverty, which is almost half of the country’s population. So many Nigerians are looking for an alternate source of income, and Bitcoin seems to be a perfect match, consider that the cryptocurrency grew by a massive 8.9 million percent in the last decade.
Cross Border Transactions
Nigeria’s gig economy is on the rise. With the increased poverty level, more youths and adults are making an entrance into the global gig economy by providing digital services as freelancers. However, Nigerians have troubles receiving payments from their foreign clients. They are not allowed to use even the most famous Paypal, and other options like Money Gram and TransferWise are not only expensive and slow but also have rigid verification system. Bitcoin, however, offers them a flexible, almost instant and cheaper means of receiving cross border payment after rendering their services to clients and companies.
The Freedom it Offers
Tyler Winklevoss, co-founder and CEO of crypto exchange Gemini Trust, was right when he said people would choose crypto because of the amount of freedom it offers. Unlike banks, no one can control your bitcoin! The cryptocurrency makes it possible to send money globally without someone stopping you.
Store of Value
The many economic problems in Nigeria, including inflation and the flash devaluation of the naira, have made the country’s fiat currency a poor store of value, pushing some to store their value in a deflationary currency like Bitcoin which can protect investors from excess money printing from central authorities and other uncertainty.
Crypto Regulation in Nigeria
Although there are no existing crypto regulations in Nigeria, the country’s Security and Exchange Commission (SEC) announced in September 2019 that it organized a committee that would prepare a guideline to include blockchain and cryptocurrencies in the country’s capital market.