Nigeria ranks at No-23 in trading Bitcoin, according to estimates gathered from various sources. By the end of 2017, Nigerians traded around US$5 million per week through Bitcoin. The figure may appear small compared to Bitcoin traded in the USA and Europe or parts of Asia. However, for an African nation, this distinction is rather unique: it indicates economic and political stability alongside technological advances. According to various reports, Bitcoin users in Nigeria have grown exponentially- by over 1,000 percent since 2013 when the crypto-currency first arrived in the sub-Saharan country of Africa. Though debates rage over how and when Bitcoin arrived in Nigeria, it is widely believed the crypto-currency was popularized by a scammer running a Ponzi scheme. While thousands of Nigerians lost hard-earned money trying to get a few Satoshi if not Bitcoin, the scam helped people understand how crypto-currencies work, the significance of the Blockchain, and pros and cons of investing. There are other reasons too why Bitcoin popularity continues to soar in Nigeria.
One of the reasons for Bitcoin’s popularity to soar in Nigeria is the presence of several NGOs and groups in the country. For example, NGOs like Cryptographic Development Initiative in Nigeria (CDIN), among others, continue to educate ordinary Nigerians about the benefits of Bitcoin and other crypto-currencies. Simultaneously, several Blockchain groups have emerged in Nigeria after the Bitcoin scam, called MMM or Mavrodi Mondial Moneybox impoverished thousands of citizens. These groups maintain vigil over cryptocurrency trading in the country. They serve as vigilantes and alert people about potential fraud. Nigeria is a great example where Blockchain users, Bitcoin investors, and law enforcement authorities work jointly to prevent scams involving cryptocurrency.
In recent years, Nigeria’s otherwise strong oil-based economy has run into severe doldrums. The slide was triggered in 2008–2009 when the global recession set in. Unfortunately, Nigeria continues to experience this recession to date, despite some recovery in 2012- 2013. Today, US$1 trades for nearly 360 Nigerian Naira, which is causing concern among a lot of wealthy Nigerians. Unable to trade Naira in the open market, Nigerians are forced to sell them at lower rates to willing foreigners in exchange for US Dollar, Euro, Japanese Yen, and other currencies. For such Nigerians, Bitcoin presents an ideal way to trade Naira for something that will be accepted worldwide. Bitcoin is independent of any government regulations. It is a borderless currency. Hence, buying and selling in Bitcoin is easy for Nigerians. It protects them from future vagaries the Naira may face.
Given the size and population of the country, Nigeria perhaps has the highest number of Bitcoin exchanges anywhere in sub-Saharan Africa. A majority of these offer state-of-the-art services for selling or buying Bitcoin: they are connected to the Blockchain and can conduct transactions fairly quickly. These brick-and-mortar establishments have instilled confidence among Nigerians that Bitcoin is here to stay and flourish. Nigerians view these Bitcoin exchanges as avenues for investment. They are eager to invest in anything that ensures financial stability for their family and self. And Bitcoin serves this purpose.
Though Nigeria’s national economy shows excellent signs of recovery, highly qualified and skilled professionals from the country, especially from the oil sector, are working elsewhere. These professionals remit money home for the family to meet daily expenses. However, fears over the future of the economy linger. Consequently, a large number of expatriate Nigerians are prompting their families back home to invest in Bitcoin rather than Naira-based savings schemes. Despite the prevailing high price of Bitcoin, they find saving in this crypto-currency is safer. It can be traded from anywhere in the world. Despite occasional downslides, Bitcoin has a remarkable history of recovery.
Similar to citizens of any developing country of the age, size, and demographics of Nigeria, people here too look for investment options that provide high returns. They are not attracted by conventional savings products for two reasons: low returns and the economic doldrums that Nigeria is currently witnessing. Given this scenario, Bitcoin serves as an ideal option. Investments in Bitcoin are found to pay off sooner or later. Since launch in 2009–2010, Bitcoin rates have never slid down for long periods. As mentioned earlier, Bitcoin exhibits an amazing record of recovery. Thus, returns on investments in Bitcoin range between 30 percent and 100 percent, depending upon the price at which Nigerians bought the crypto-currency.
Most Nigerians view Bitcoin as a safe investment capable of providing large returns. With the possibility to earn free Bitcoin and its fraction, Satoshi, millennial Nigerians are exhibiting growing interest in this lucrative crypto-currency of the future. Understandably, Nigeria has been hit occasionally by Bitcoin scams. Despite vigilance by NGOs, Blockchain groups, Bitcoin exchanges, and citizens have ensured the cryptocurrency is left largely unscathed by illegitimate activities. In the coming years, Nigeria has the potential to grow as a major Bitcoin market.