Connect with us

Features

Crypto and blockchain in Nigeria: How has the budding industry fared in 2020?

Published

on

Nigeria

Africa is said to be the perfect ground for blockchain and cryptocurrencies to thrive. This is largely due to the fact that the economic realities of the continent are alarming. Africa still struggles with economic instability. Several factors still mitigate against its quest of being a self sufficient economy. 

Blockchain is a transformative technology that could turn the continent around. The word “blockchain” itself, is getting a substantial amount of popularity on the continent. Its most popular application is in cryptocurrencies. Cryptocurrency is gradually transforming financial operations on the continent. Although no significant reduction has been seen in the use of traditional financial systems, crypto is no doubt gradually taking hold of finance in Africa. 

Other applications of this technology exist. Although not as popular as Cryptocurrency, they hold prospects that are just as promising. 

Education, healthcare and  governance, are just few of the African sectors which blockchain could be integrated into. These sectors are germane to Africa’s survival, yet, they remain one of the most poorly developed. 

The rave about blockchain being Africa’s Calvary has been going on for a few years. Just how well is the transformative technology positioning itself in Africa to heal the continent of the woes that plague it? 

A review of the blockchain and crypto related events in 2020 could give us an insight on how these technologies are taking shape in Nigeria. Nigeria is Africa’s most populous nation, and has the largest economy. The problems that rock Africa can be found in Nigeria in no small measure. 

2020, for obvious reasons, is a very peculiar year. Notwithstanding, in the midst of all the chaos, crypto and blockchain still made a mark on the year. 

Crypto-scam intro

Prior to 2020, crypto activity had gained significant ground in Nigeria, but it’s fair to say that a number of people were introduced to crypto through scams. 

Crypto-related scams threatened to undermine the potency of blockchain technology in improving Africa. Crypto criminals made blockchain and crypto innovators to equally seem like criminals. While crypto might seem like a way to avail Africa of its financial woes; it is a great way for scammers to scam. 

To reassure public confidence in the crypto and blockchain space, SIBAN (Stakeholders in Blockchain Technology Association of Nigeria) ensured to protect people against crypto scams. The scourge of crypto scams could kill the rise of crypto dead in its tracks, thereby, making Nigeria and even Africa lose out on the transformative tech. 

Whilst the triumphant entry of crypto might have been brought in through thievery, its dominance, however, is gradually bringing about the much needed development on the continent. 

Bitcoin facilitating international trade.

The ability of cryptocurrencies to easily jump across borders was something businessmen began to take advantage of in 2020. There was no limit, no exorbitant charge and no need for foreign currencies, just good old bitcoin.

 Nigeria is a largely import-dependent country. The trade hurdles encountered by importers due to exchange rates could be quite discouraging. Settling payments especially with their Chinese counterparts can be very cumbersome. Finding foreign currencies is quite hard in Nigeria; a problem that has caused the constant devaluation of the country’s fiat. 

The turn to bitcoin is simply logical. It is a phenomenon that has caught the eye of international media houses such as Bloomberg

While bitcoin might be an easy way of conducting international trade, there are still limits to it. The legality of bitcoin is still hazy, however. Most business people would not openly reveal that they use bitcoin for international trade. Whilst the network itself cannot facilitate too many transactions at once, (a problem that can be solved with the lightning network), but this problem could be solved before mainstream adoption. 

The rise of African blockchain startups.

2020 saw funding, expansion and establishment of crypto and blockchain startups.  In the first quarter of the year, tech startups raised about $350 million in funding. Fintech makes up 82% of the funding. 

Blueloop, a crypto payment platform secured its own funding in late 2020. The company founded by Ben Eluan, Osezele Orukupe and Israel Akintunde, helped its users get payment from anywhere in the world and convert it into fiat that is ready to be spent directly from the platform. The company created the Flux. It operates like a regular banking app but supports cryptocurrencies. 

With a $77,000 funding, the young company is facilitating crypto usage in Africa’s most populous country. 

YellowCard is another startup that secured funding in 2020. The $1.5 million raised in a seed round was geared towards expansion to other African countries. YellowCard is waxing strong and gradually becoming a preferred crypto exchange for Nigerians and Africans. 

Binance-backed Xend Finance also caused a stir in the DeFi space in 2020. Decentralized Finance, which is a relatively new phenomenon in the Cryptocurrency ecosystem, now has a possible frontier in Nigeria. The Nigerian startup announced a public launch in November. With a strategic funding round of $1.5 million dollars, the company hopes to help credit unions with DeFi. The constant devaluation of the currency is a problem for credit unions. Xend Finance will help these credit unions turn their funds into crypto and multiply it with yield farming. 

#EndSars protest featuring Bitcoin

Another highlight of 2020 in Nigeria is the #EndSars movement that rocked major cities of the country for days. The civil unrest will come to feature bitcoin in a way no one imagined. 

Bitcoin is known for making international trade easier and aiding cross border funds transfer, but assisting protests is not something anyone saw coming. When Nigerian youths came together in October to decry the reprehensible actions of the defunct police unit known as SARS, they didn’t think bitcoin would be of help at some point. 

The government of Nigeria, in a bid to stop the organized uprising by youths, allegedly shut down the bank accounts that were sponsoring the protests. Bitcoin however came to the rescue. 

The importance of a currency that cannot not be controlled by the government came to play. A perfect example of how cryptocurrency can liberate Africa was seen firsthand by many Africans. 

Blockage of Naira remittance

Surprisingly, the Nigerian government also has a hand in the promotion of crypto this year. In a communique issued by the Central Bank, it directed international money transfer operators to cease processing diaspora remittance payments in Naira. 

This new directive allows Nigerians to receive international payments into their domiciliary accounts. 

Blockchain and crypto is no doubt taking shape in Nigeria. The year 2020 has created scenarios that have facilitated the popularity and usage of the technology in Nigeria. 

From dominating p2p bitcoin transactions to growing crypto startups, it is safe to say the blockchain and crypto future of Nigeria looks promising. 

It is a trend that is bound to grow in popularity and in adoption. More people will save as crypto, rather than fiat in banks. More international transactions will make use of bitcoin and more crypto startups will spring up to cater for the increasing number of crypto users. 

To envision this kind of growth trajectory for this technology automatically translates to envisioning economic development for Nigeria and Africa at large. 

Comments

Bolu Abiodun is a recent graduate of Theatre and Media Arts, Federal University Oye-Ekiti. A journalist with over a year's experience on the job. A former editor at American Media company Project Forward, he is a skilled content creator, social media manager and digital marketer.

Continue Reading
Click to comment

Leave a comment:

Business

From Libra to Diem: What happened to Facebook’s Digital Currency plans

Published

on

Facebook digital currency
Source: Getty Images (modified)

In 2019, Facebook Inc. announced the Libra, a digital currency project being developed by the company. Libra was unveiled to be a blockchain based stablecoin backed by bank deposits and short-term government securities and was to be integrated into Facebook’s services like Messenger and WhatsApp. The Libra blockchain was said to be able to handle 1000 transactions per second, in stark contrast to Bitcoin’s 7 transactions per second. Needless to say, the news that the largest social media company was working on a cryptocurrency rocked the market for a while. But for some reason, we haven’t seen anything really significant happen since then. Why?

First off was the regulatory hurdle. It would appear that Facebook realized that it didn’t have top marks in the trust department, especially in public opinion. To this end, the Libra project was grilled by U.S lawmakers in July 2019 and the central theme was the issue of trust and data privacy. Other regulators also commented on the issue, with European Central Bank board member Benoit Coeure reportedly saying that digital currencies such as the Libra could challenge the supremacy of the U.S. dollar. Similarly, France’s and Germany’s finance ministers at the time had expressed concerns over the Libra, citing risks around financial security, investor protection and anti-money laundering laws.

Libra also faced the hurdle of its project partners dropping out of the initiative. Founding members eBay, Visa, Mastercard as well as PayPal withdrew from the project which may have had a hand in stalling it. The regulatory scrutiny surrounding the project and Facebook’s own unpalatable reputation might have influenced the decisions of the partners who left the project.

This story would be incomplete without mentioning the efforts at rebranding which morphed the project from Libra to Diem in late 2020. These efforts may have been subtly aimed at distancing the digital currency from the scandals and scrutiny that plagued Libra as a result of its association to Facebook. However, those efforts haven’t been particularly successful. As a result of these factors and more, the Diem association scaled back its earlier hoped for global launch and instead settled for a U.S. stablecoin. That doesn’t seem to have happened.

All in all, it would appear that Facebook is adamant in the pursuit of this blockchain system. However, regulators aren’t completely convinced. The headache seems to be about the issues around it’s possible widespread use, considering the amount of Facebook users. The apprehension is about such a currency’s competitive power with other fiat currencies as well as privacy concerns.

Comments
Continue Reading

Africa Blockchain Institute

Africa Blockchain Institute Organized The First African Blockchain Summer Bootcamp For Teenagers In Ghana

Published

on

In the spirit of catching them young, the Africa Blockchain Institute organized the first-ever Blockchain Summer Bootcamp for teenagers (age range 13 to 19 years old). A successful Bootcamp, according to the participants’ testimonials and stakeholders, held at the OpenLabs, Ring Road, Accra Ghana, between Monday 2nd August, and Friday 6th August 2021. 

The teenagers applied from across Africa, and selected participants all converged at the OpenLabs, Ghana, for an intensive five days of learning, interacting, and implementing personal  Blockchain projects. The participants were divided into three significant tracks, thus; Blockchain Development, Blockchain for Creatives and Blockchain Entrepreneurship. 

Blockchain Summer Bootcamp for Teens by ABI
Blockchain Summer Bootcamp for Teens by Africa Blockchain Institute

Across these three tracks, the teenagers learnt introductory units to Blockchain Development for societal challenges, Blockchain evangelism, Non-Fungible Tokens, and how Cryptocurrency works. Another highlight of the program was the excursion to the Accra Digital Centre, where the Boot Campers were introduced to the tech ecosystem and feel of the Ghana Tech Lab and Accra Innovation Hub spaces. A visit was also made to the Museum of Science and Technology, and the teenagers got to understand the history of technology in Ghana. 

Worthy of mention was the panel session aimed at motivating the students to pursue a career in technology. While making his comments during the panel session, the founder of BankLess Africa, Mr. Muntala Mohammed Shaibu, urged the teenagers to stop seeing themselves as too young to experiment with new technologies. In her remarks, Ms. Elohor Thomas, CEO & Co-Founder of CodeLn, urged the teenagers to continue to explore their interest in technology and blockchain early.

Blockchain Summer Bootcamp for Teens by ABI
Panel Session, Blockchain Summer Bootcamp for Teens by ABI

The Bootcamp ended with personal project presentations from the Blockchain Development and the Blockchain for Creatives & Entrepreneurship tracks. Projects such as NFT blogposts, Blockchain product reviews and Blockchain for transport and logistics were presented. The best presentation won the OpenLabs scholarship for Robotics Course. Thanks to Dr Sujith Jayaprakash, the Director of OpenLabs, Ghana, for the offer of scholarship. In his closing remark, the Executive Director of the Africa Blockchain Institute, Mr. Kayode Babarinde, urged the teenagers to continue using the  skills and knowledge gained during Bootcamp to explore Blockchain-related solutions further. We also appreciate Mr. Ganzaro Omar, Chairman, AfroBlocks, for his supports, and fostering collaborations with the Ghanian Blockchain community.

The Africa Blockchain Institute will continue to hold future Blockchain Summer Bootcamp series in various African cities to drive Blockchain knowledge into innovators early enough. 

Oluwaseun David ADEPOJU

Head of Research,

Africa Blockchain Institute. 

Comments

Decentralize Daily

From Crypto and Blockchain to AI, Fintech and Web 3.0 delivered twice in a week (Mondays and Fridays)

Continue Reading

Features

CBN Crypto Ban Increases P2P But Is It Also Increasing Crypto Scams?

Published

on

Crypto ban

The Central Bank of Nigeria CBN on the 5th of February 2021 caused an uproar within the crypto community in Nigeria and globally. The Apex bank released a circular that prohibits financial institutions from processing crypto-related transactions. Banks and other financial institutions were also directed to close accounts that made crypto-related transactions.

As expected the directive did not sit well with crypto enthusiasts, traders and most Nigerians alike. In the CBN’s defence, they were protecting Nigerians from crypto-related scams, volatility of the crypto market and several evils perpetrated with cryptocurrencies. Though valid reasons, many Nigerians still express their resentment of the directive. Cryptocurrencies which serve as an alternative to the weakening Naira are faster and easier at facilitating cross border transactions. 

However, the ban has not hindered crypto transactions in the country. The country still ranks high when it comes to crypto transactions globally. Business Insider reports that between January and March 2021,  p2p trading value of bitcoin in Nigeria was worth $99.1 million. This is $9 million more than the value of bitcoin p2p transaction in Kenya for the whole of 2020. Cleary p2p has increased significantly since the ban. It is therefore safe to say that the ban has increased crypto activity in Nigeria. But has it increased crypto scams too?

The dark side of p2p

While volatile nature cryptocurrencies might in truth lead to loss of funds, the ban by the Central Bank of Nigeria could make Nigerians more vulnerable to crypto scams as they now purchase these digital currencies from unregulated sources hence, p2p.

“It was very easy just buying bitcoin straight from the Luno app but now I need to find someone who is willing to sell me bitcoin and there is really no way to ascertain the person’s trustworthiness.” This statement by crypto newbie, Adekunle Agbetiloye sums up the troubles and vulnerabilities crypto newbies go through to buy and sell crypto assets.

Kunle has been fortunate to have friends that are more grounded in trading cryptocurrencies. This has prevented him from falling into the hands of scammers that find newbies like him, easy picking. In his words “I know people that have fallen victim to crypto scammers that is why I only transact with people that I know personally”.

Ezekiel Juwon wasn’t lucky enough to buy from someone he knew personally. He recounts how he unsuspectingly sent money to a crypto scammer. In his words, “as a beginner I think it is more convenient to buy directly from crypto apps than dealing peer-to-peer. As someone who has experienced crypto scams first hand, I know this for a fact”. Juwon also adds that regulated p2p platforms created as an alternative to trading crypto can also be dangerous. He is convinced that more people will suffer his fate if the ban isn’t lifted. “Everyone wants to get in on crypto, it saves you from poverty so the ban just makes newbies vulnerable”. 

Just like Adekunle, Oyin Komolafe is fortunate to be surrounded by crypto veterans. She says “aside from the grace of God, what is helping me is that I am surrounded by people who know their way around crypto. However, I am sure that newbies will be susceptible to crypto scams because of the CBN ban”

What experts have to say   

However, Crypto expert and blockchain stakeholder, Samuel Attah feels crypto platforms have created alternatives that should keep crypto newbies safe. He sights Bundle as an example of these platforms. In contrast, some of these new users have said they do not find these platforms easy to use. 

Another crypto trader who identifies himself simply as Smogz, says these alternatives by crypto exchanges and crypto platforms require a lot of expertise. Smogz believes that the ban will increase crypto scams. “Crypto platforms serve as a shield to protect crypto beginners from scams. Now that these beginners have to look outside of the confines of these platforms they are open to being ripped off”

It is clear the crypto ban cannot stop Nigerians from using cryptocurrencies. Although a risky investment venture, crypto assets are known to be a source of wealth. Ensuring the safety of Nigerians while they use these crypto assets should be a priority.

Comments
Continue Reading

TRENDING

%d bloggers like this: