Fueling Nigeria’s Economy with Cryptocurrencies and Blockchain
29 Aug 2022
According to CoinGecko crypto price tracking platform, Nigeria has shown more interest than any other country in the world in cryptocurrencies. This is despite the decline in value of digital assets in April 2022. For many residing in Nigeria, cryptocurrencies provide a viable alternative to fiat in the face of the continued depreciation of the naira. Additionally, they also provide shelter from governmental control.
In Nigeria, many do not have resounding trust in the ruling body of the nation. This is why the e-naira, the government’s official central bank digital currency, did not really resonate with the Nigerian population upon its launch. In addition to the fact that the national currency has been declining in value, many have minimal trust in the governmental bodies of the country.
Cryptocurrencies flourish despite governmental restrictions
So despite the government’s best ability to bar Nigerian banks from transacting with cryptocurrencies in the hopes of steering the population away from the likes of Bitcoin (BTC), Ethereum (ETH), and Elrond (ELGD), digital assets have continued to boom and rise in popularity in Nigeria.
Many use digital assets from the countryside to the city of Lagos for various daily transactions. Not to mention the fact that transacting with Bitcoin and cryptocurrencies is so easy in the eyes of a Nigerian - most rely on peer-to-peer services on a daily basis to get their funds across.
Nigeria’s population and its interest in cryptocurrencies is fueled by the use cases and practicalities of digital assets. Its crypto economy took off partially because of the declining value of the naira.
As covered by AAX Trends previously, the implementation of an e-naira in the country did nothing to slow the growth of cryptocurrencies.
Poverty imminent in Nigeria
Nigeria consists of the most populous country in Africa. Yet, 40% of its population figure below the poverty line. Needless to say, many are actively looking for solutions to secure their wealth and to get themselves out of poverty. How can Bitcoin and altcoins help when one is in a financial rut?
In face of the naira’s depreciating value, many have secured their wealth with Bitcoin and other cryptocurrencies. Many generally believe that cryptocurrencies are the future of money.
Of course, the use cases are slightly different for Nigerians living in the countryside and for those living in the city.
Problems faced when living in countryside Nigeria
For Nigerians residing in the countryside, job security is a huge concern. Many are faced with unemployment and the dilemma that they cannot conduct business internationally. With the limited employment opportunities, many struggle to get themselves out of poverty. The mere fact that one is only just surviving from one day to another - as opposed to thriving - is enough to trigger desperation. Subsequently, with poverty comes higher crime rates.
Using Bitcoin and blockchain for the better
With the advent of Bitcoin and other cryptocurrencies, more job opportunities can be created. Its underlying technology also creates a whole new sector worth exploring. With blockchain technology, various use cases can come to life that can help people in need.
Take for example non-profit organizations that leverage blockchain technology to uplift their causes. Blockchain technology is increasingly used to save costs, trace the flow of information, and reduce the transaction waiting time. For Nigerians, not only can blockchain technology help in creating employment, but it can also fuel the growth of local businesses by allowing for a borderless transaction experience. With more opportunities available, Nigerians can therefore have more resources and chances to pull themselves out of their situation.
Additionally, cryptocurrencies are a great investment tool for those looking to stay ahead of currency devaluation and inflation. By hedging with Bitcoin, one can protect against inflation, as BTC is essentially deflationary in nature. Over time, its purchasing power increases while its inflation rate diminishes. This is due to the fact that Bitcoin’s supply is capped at 21 million.
An overview of Lagos
In big cities in Nigeria such as Lagos, Uyo, Port Harcourt, and Abuja, the problems faced by the population are slightly different. With better job opportunities and more access to resources such as electricity, many are faced with a different problem - a higher cost of living.
In Lagos for example, the center of Nigeria, cryptocurrencies are heavily used, despite the government banning banks from using cryptocurrencies.
This is where blockchain technology can come to play a role as well. Blockchain can fuel the economy by creating more job opportunities. It can also make day-to-day transactions faster, more seamless, and more efficient. Additionally, it can help boost Nigeria’s economy and bring it up to speed with the global digital transformation that can be observed.
In summary, the Nigerian community has shown tremendous interest in the use case of cryptocurrencies despite government restrictions. Nigeria's lack of trust in its ruling body and the continuous depreciation of its national currencies has prompted the community to look for a way out of its daunting situation. Cryptocurrencies like Bitcoin offer a practical solution that would benefit individuals when exploring solutions to grow their wealth and businesses. New opportunities could further help develop the city and this hope is further renewed with the advent of cryptocurrencies and blockchain disruption.
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