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Nigeria’s Progress In The Field Of Bitcoin

The cryptocurrency frenzy continues to spread across the globe with some countries fully embracing this new era of digital currency. In such countries, the citizens not only use cryptos for trading but also to pay for goods and services using their debit cards; these debit cards work as typical credit cards only that they use crypto coins instead of the fiat currency.

Well, some, on the other hand, have remained adamant in their stand against the use of virtual currencies by the citizens. Probably, their decision may have mainly been swayed by the fear of cryptocurrency turning out to be the biggest ‘Ponzi scheme of the century’ or as other anti-cryptocurrency like to call ‘a bubble.’ But, given the technology that runs the cryptos this bubble will not bust anytime soon if indeed there is a chance of it busting.

The journey of cryptocurrency in Africa has not been an easy one too, especially in Nigeria. Given the country’s history of Ponzi schemes such as the infamous MMM ( Mavrodi Mundial Moneybox) that ripped Nigerians off their cash; it is understandable why the Central Bank of Nigeria and other financial regulators dread the use of cryptocurrencies. Nevertheless, Nigeria has witnessed a spike in the adoption of Bitcoin with its BTC trading volume been the second highest after that of Zimbabwe over the past one year.

Bitcoin in Nigeria

Significant use of Bitcoin in Nigeria started in early 2016 when the country was experiencing national oil prices crash with the economic crisis worsening the situation at the same time. Consequently, the government adopted a regulatory approach to money usage outside the country, making importation and exportation of goods and other businesses suffer severely. Then came Bitcoin which made it possible for business owners to transfer large amounts of money without any regulation by a central power.

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The increased growth in Bitcoin in Nigeria was largely contributed by ordinary citizens looking for survival in the hard economic times. The citizens were in desperate need of an earning vehicle that would yield returns in the shortest time possible. The stock market proved not to be reliable considering the volatility of the Naira. Luckily, Bitcoin turned out to be the perfect investment since it is not affected by any economic pressures. By the end of 2016, Nigeria experienced an increase in the number of cryptocurrency exchanges and Bitcoin companies. Today, credit to the increased adoption of Bitcoin, Nigerians can now access sell and purchase Bitcoin with their debit card or bank transfers.

Top Bitcoin exchanges in Nigeria

Here is a list of the top exchanges in Nigeria

  1. Luno

Luno is a global crypto exchange with a presence in South Africa, Singapore, Malaysia, and Nigeria. This exchange platform allows its users to trade Bitcoin as well as store them in their wallets. Apart from its low withdrawal fees and free deposits, Luno offers its market makers a 0% fee meaning that, one can place a buy order at no cost at all and wait for a potential seller to take it. However, there are limited deposit options since the exchange site only accepts deposits through bank transfers, no credit card options. Additionally, as a user, you will have to wait for about 24 hours on a working day for your bank account to be accredited with funds after withdrawal.

  1. NairaEX

NairaEX is the most used exchange site in Nigeria mainly because it’s of Nigerian origin. The best thing about this exchange site is that it processes withdrawals almost instantly- about 5 mins to a maximum of 12 hours. Moreover, the users can store, buy or sell from anywhere in the world. NairaEx is also planning to include wallets of other cryptocurrencies soon, so as to cater for the growing cryptocurrency investment in the country. As far as the users’ privacy is concerned, NairaEx needs to improve on identity verification process.

  1. LocalBitcoins

LocalBitcoins is a popular escrow service that also connects Bitcoin buyers and sellers. This platform accepts cash deposit as a payment method, but the customers are at liberty to opt for whichever payment method they may desire. Users can also request an in-person meeting with a buyer or a seller as a faster and private way of trading Bitcoins. Great caution should be exercised since the site is prone to fraudulent activities by users masquerading as buyers or sellers. Compared to other exchange sites, LocalBitcoins charges slightly higher processing fees.

  1. Bitpesa

Despite being a Kenyan based company, selling Bitcoins via the popular M-PESA mobile payment service, Bitpesa has managed to gain roots in Nigeria’s Bitcoin field. Nigerian users can pay through Paga account or debit card. In terms of privacy, the debit cards offer a secure payment method plan since the user shares less information. The company also has a strong presence in Uganda with users paying through MTN or Airtel.

  1. Mycelium local trader

Similar to LocalBitcoins, Mycellium trader also helps the users locate and meet a seller or a buyer at absolutely no cost. This is the most secure way of trading since less personal information is shared- only your cell phone number. Although the platform offers an excellent trading platform, it may not work perfectly in sparsely populated areas that are characterized by fewer buyers and sellers.

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Interestingly, the MMM Ponzi scheme that began in Russia may have ignited Nigeria’s love for Bitcoin, in spite of robbing close to 3 million Nigerians. The MMM operator required the victims to use Bitcoin in an attempt to avoid the government’s crackdown on banks linked to the scheme. This gave Nigerians an opportunity to understand how Bitcoin works. Currently, according to CryptoCompare- a Bitcoin trading research site, Nigerians are trading about $4.7 million in Bitcoin a week which is an increase from $300,000 per week in 2017.

Unfortunately, scams have still continued to flood the market with the promise of fast money. Others have gone to the extreme end of selling some non-existence crypto coin luring the unaware victims with quick cash on investment. To combat this menace, groups like Cryptographic Development Initiative of Nigeria, have been founded so as to educate the mass about digital currencies.

Clearly, the future of Bitcoin, as well as cryptocurrency in Nigeria, looks promising. With the Bitcoin surge notwithstanding, the citizens of Nigeria have continued to show a huge interest in Bitcoin and other virtual currencies at large. It is, therefore, safe to conclude that Nigeria has fully accepted Bitcoins.

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Updated: 5th June 2018 — 7:09 pm