In 2016, the MMM Ponzi scheme, whose fame had been prominently spread across Nigeria, shattered the finances of many Nigerians after it experienced an abrupt failure that led to the loss of billions of naira. The collapse of MMM in Nigeria, triggered the birth of a new technology revolution in the country—blockchain.
Few years before MMM collapsed, in 2008, a novel technology known as blockchain, was developed by Satoshi Nakamoto, to serve as the public transaction ledger of the cryptocurrency, Bitcoin. The bitcoin would later popularize blockchain in Nigeria, after the crash of the MMM Ponzi. After MMM crashed in 2016, the attention of many Nigerians was drawn to a new innovation, the bitcoin, that could facilitate a better and more flexible means of financial exchange, and also increase their income. Contrary to public expectations, the collapse of MMM did not entirely scare people away from cryptocurrencies and Blockchain technology. It, instead, helped bitcoin and Blockchain technology gain significant traction in the country.
Before 2016, there was no active blockchain community in Nigeria. Despite the fame the bitcoin received after MMM crashed, many Nigerians were still oblivious of what blockchain technology entailed. The emergence of a vibrant blockchain ecosystem in Nigeria was pioneered by a few key Nigerians, including Chuta Chimezie who is the founder of the Blockchain Nigeria User Group.
The founder, Chuta Chimezie, recounts that he stumbled on the word, “blockchain”, while he was exploring his interest in 3D printing. As he recalls, “I was curious. What are 3D printing and blockchain doing together? So, I decided to find out about blockchain.” The blockchain journey began for him, when he enrolled in the 2016 edition of a blockchain course by University of Nicosia, Cyprus. Interestingly, the course had only 5 African participants, which portrayed a need for pioneers like Chuta to lead the development of an African blockchain ecosystem. Alongside a few of his friends, Blockchain Nigeria User Group was created in 2016, to spur the growth and development of blockchain in Nigeria. The platform has immensely contributed to shaping the blockchain community in Nigeria. In August 2017, the organization organized one of the very first blockchain conferences in Nigeria. This, and many other initiatives like it, have promoted the education of Nigerians about blockchain.
As the blockchain conversation in Nigeria waxed stronger, the industry began to see the birth of disruptive innovative startups like the cryptocurrency remittance service provider, SureRemit, which was launched in 2017. In 2018, several other blockchain startups joined the Nigerian blockchain industry, including Bitmama, KubitX Limited, Coinbarter and Terra Foundation. In the same year, Nigeria was among the top African countries with the highest number of new bitcoin users.
The rapid evolution of Nigeria’s blockchain community prompted the development of BlockchainDev1000, an initiative powered by the Blockchain Nigeria User Group, created to develop 1000 blockchain talents within 2 years. The initiative is in partnership with major stakeholders within the blockchain industry, including IBM West Africa and Hyperledger, and has enrolled about 560 participants since the program commenced. “Adoption of blockchain technology in Nigeria, is not going to happen overnight because it requires a new set of skills,” says the founder of the Blockchain Nigeria User Group. Initiatives like the BlockchainDev1000 are taking up the responsibility of enabling blockchain adoption by equipping Nigerians with the skills required to function in the blockchain space.
2019 marked a redefinition of the blockchain landscape in Nigeria. In 2019, Nigeria peaked as the one of the countries with the highest volume of crypto-related searches, particularly bitcoin, in the world. As the interest grew, crypto-oriented applications gained wider prevalence in the Nigerian financial sector. “I like to refer to cryptocurrency as the first fruit of blockchain in Nigeria,” says Chuta. In the same year, prominent Nigerian crypto trader, Gaius Chibueze, was ranked, globally, as one of the top traders on Binance, which is one of the world’s largest bitcoin exchange platforms. The birth of blockchain startups also continued to experience an increasing surge with the launch of blockchain startups like Paychant, MultiSend and Agriblock.
A lot of progress has been made since the inception of the blockchain ecosystem in Nigeria and regulations are now being put in place to encourage the adoption of blockchain technology. The Security and Exchange Commission (SEC) regulation that was announced in September 2020, has proposed a regulatory framework for crypto assets and investments, and blockchain technology in general. This is a huge encouragement to the growth of Nigeria’s blockchain sector, as there was no clearly defined regulation before it. “The SEC document will go a long way in giving investors the right mindset,” says Chuta. “The Security and Exchange Commission, which is the watchdog of the Nigerian capital market, has recognized the crypto asset class as a commodity, and these are the things that the capital market players have been waiting for. I believe that this policy document will galvanize the industry into the direction of mass adoption.” Currently, the Nigerian blockchain community is collaborating with the National Information Technology Development Agency(NITDA) on a policy document to standardize and regulate the Nigerian blockchain industry.
Beyond the very short term, the future of blockchain in Nigeria is highly unpredictable because of its extremely rapid growth. “Blockchain technology is a rapidly evolving technology. A ten year prediction is something nobody can imagine,” says Chuta. Nonetheless, one thing is certain, and that is the fact that blockchain is here to drive another industrial revolution in Nigeria. With proper regulations now being put in place and the increasing interest of Nigerians in the technology, the growth of its ecosystem within the next two years, will be much more rapid than has been previously experienced.