Connect with us

News

Inside Nigeria’s vibrant crypto and blockchain community; how it all started

Published

on

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. 

Blockchain Nigeria User Group Meet-up at Jelurida Africa, Lekki Lagos Island
Blockchain Nigeria User Group Meet-up at Jelurida Africa, Lekki Lagos Island

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. 

Chimezie Chuta
Chimezie Chuta / Flickr

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.

Lagos Blockchain & Digital Assets Conference 2019. – Organised by Blockchain Nigeria User Group
Lagos Blockchain & Digital Assets Conference 2019. – Organised by Blockchain Nigeria User Group

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.

Blockchain Nigeria User Group Meet-up 2019 (Chimezie Chuta/Medium)

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.

Comments

Kehinde is a driven human who is passionate about leveraging technology to transform the future of humanity and the way we all live. His interest lies in constantly getting valuable information and being part of a mission that seeks to create a transformative radical shift.

Continue Reading
Click to comment

Leave a comment:

Crypto Assets

Crypto prices drop as global market fear increases

Published

on

Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

Comments

Decentralize Daily

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

Continue Reading

Bitcoin in Africa

The rise of CBDC in African economies

Published

on

Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

Comments
Continue Reading

Decentralize Brief

Bitcoin trades above $51k ahead of El Salvador’s adoption

Published

on

Bitcoin growth

Bitcoin price has rallied above $51,000 ahead of El Salvador’s adoption. The immediate surge in price may be due to the social media campaign that everyone should buy sats of Bitcoin to support El Salvador’s plan to make the coin a legal tender or it may be due to the news of El Salvador’s adoption of the coin as a legal tender on September 7. Users of social media platforms like Twitter and Reddit are discussing how they will buy Bitcoin of $30 each to mark the new El Salvador Bitcoin law.

The surge in Bitcoin’s price began in the last 24hrs with the price rallying around $51,955 with a 3.37% increase. This is an all-time high after the April crash that brought the price of Bitcoin from $64k down to $28k. The move by El Salvador to be the first country that accepts Bitcoin as a legal tender and the social media campaign that leads to a surge in price ahead September 7 are a repetition of events that occurred late last year and early this year with regards to institutional investors and how the price of Bitcoin skyrocketed.

El Salvador, a country in Central America, has been preparing heavily to adopt Bitcoin by installing ATMs to allow citizens to convert the token into US dollars. Last week, the country’s Legislative Assembly passed a law to allow for the creation of a $150m Trust to support the conversion of Bitcoins to US dollars.

To promote the use of Bitcoin, the government states that it will give the adult population of El Salvador $30 in Bitcoin once they download “Chivo” the wallet issued by the government. This was confirmed by the Finance Minister, Alejandro Zelaya.

What this means for Bitcoin investors

Apart from the adoption by Salvadorians, on-chain analytics show that Bitcoin is in high demand. The fourth halving that occurred will make Bitcoin become a scarce token in the nearest future. Thereby increasing the price sporadically.

With El Salvador’s interest in Bitcoin, other countries are likely to follow suit- Panama is considering following El Salvador’s lead. History will repeat itself as this development will serve as another crypto rout that occurred early this year when Tesla and MicroStrategy announced their support for Bitcoin.

El Salvador’s new law allows the use of Bitcoin as a legal tender it can be used to buy goods, pay for taxes and bank loans. This means more demand for Bitcoin, with the fourth halving that occurred, it means less supply. A common rule of economics for demand and supply will apply. Prices are projected to keep rising. At the time of writing this report, Bitcoin is trading at $51,839 with a projection of $52k before the end of today and higher tomorrow when Salvadorians begin to use the token.

Comments
Continue Reading

TRENDING

%d bloggers like this: