Why Nigeria Needs Bitcoin: A Country That Is Too Big To Ignore
Nigeria is a country with great potential. It has the largest population in Africa, ranking as the world's 20th most populous nation. Nigeria also has the biggest economy on the continent of Africa and one of the fastest growing economies in the world. However, there are many problems that still persist today which hinder this growth from happening at a faster rate. The government corruption is one thing that needs to be dealt with if Nigeria wants to continue its rise to greatness, but there are other issues that need tackling too. One problem that I see coming up often is how inefficient their currency system currently is due to inflation - it can take days for funds to make it across borders because they have so many different currencies! This lack of efficiency makes doing business very difficult. Here are some reasons cryptocurrencies may thrive in the Nigerian economy.
Section 1: Why Bitcoin Is Important
At the present time in Nigeria, online banking has been slow, especially during 'payday' times when people can no longer access their accounts as many workers are not paid by the 'salary' period. Bitcoin is helping ease the crisis of infrastructural problems facing Nigeria and its people due to the lack of power plants and roads that many Nigerians are experiencing in their day to day lives. However, with Bitcoin, there is no need for electricity. Even those without access to internet are able to access bitcoin through mobile phones and desktop computers.
Section 2: Bitcoin Infrastructure in Nigeria
Lets compare the amount of bitcoin miners in Nigeria, with the amount of miners in Kenya, for example. About 2.1 million Kenyans mining bitcoin compared to about 500,000 Nigerian miners.
Bitcoin and the Nigerian Economy
In the past, Bitcoin has been widely hailed as the world's most effective currency. Over the past year, it has been seen as a safer alternative to the current USD. So, we can imagine how much more popular the cryptocurrency would be in Nigeria if the transaction speed and cost-efficiency was faster. Even though Bitcoin and other cryptocurrencies can work well as a currency for illegal transactions, I believe cryptocurrency adoption in Nigeria will largely be driven by international companies which will want to use it as an efficient way to make money transfers. If all companies working with transactions within the country were to start using Bitcoin, it would have a huge impact on the economy.
Bitcoin and Corruption
No, I'm not talking about bitcoin of course, I'm talking about Bitcoins and blockchain. Blockchain is a digital ledger which records every single transaction. All of the world's transactions are verified and encrypted so that no one can access it and tamper with the records. It's sort of like having a big box of 1000s of books in your house with all of the books perfectly protected. This is essentially how bitcoin works, and they say the whole point of bitcoin is to build a fully peer-to-peer electronic cash system, which can't be tampered with, and therefore eliminates the need for central banks. If a company creates a bitcoin wallet for people to use, then no company is involved in the process other than itself. It's like a cryptocurrency wallet.
Bitcoin and Inflation
According to a September 2018 article in The Guardian, in 2016 the inflation rate in Nigeria was running at 15.6 percent. It is estimated that this number will hit a staggering 23.3 percent this year, and it will continue to rise. An unstable currency is a problem. A lot of money gets lost in Nigeria each year because it is so unstable and no one knows if they will get a fair value for their money at the time they are sending it. It also makes buying goods that would be the most cost effective very difficult and is often only done when the value is lower.
Cryptocurrencies solve this problem. With the emergence of Bitcoin, you can buy digital goods and services at a fair price. You can also trade and transfer money across borders at a fair value.
Bitcoin's Future in Nigeria
As of June 2017, there are currently between 2.1 and 3.3 million Nigerians (around 2%) owning bitcoin. Despite the small numbers, it's a good indication of bitcoin's current standing in Nigeria. Since only 2.1% of Nigerians own bitcoin (around 2,000), this suggests that even if only 1% of Nigerians ever had the ability to use bitcoin at any given time, there would still be significant potential for growth. The fact that many Nigerians don't know about bitcoin and how it works makes sense - even many Nigerians who can afford it wouldn't know what to do with bitcoin or how to use it for the correct purposes. But this will all change in the near future as the currency gets more publicity and the possibilities increase.
While it may be difficult to predict the rise of Bitcoin in Nigeria, the nation definitely needs to start exploring it for both its benefits and dangers. What are your thoughts on Bitcoin in Nigeria? Do you think it will succeed in the face of a lack of government support or an exchange rate that cannot reach more than 100,000 naira? What about cryptocurrencies in general? Share your thoughts in the comment section below.
Images courtesy of Shutterstock, and Nigerian government
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