Nigeria – the future crypto hub of Africa – once they ditch the reputation as internet fraud central

The two biggest economies in Africa are probably Nigeria and South Africa, with Nigeria being the fastest growing population and set to be the most populous country in Africa in coming years. And thus the most booming city in Africa might be Lagos, with 21 million citizens. Well it turns out that Lagos is the top city in the entire planet right now in online searches for Bitcoin, according to Google Trends.

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Despite that, the bitcoin adoption among retailers is lagging significantly. Also Nigeria’s unemployment rate is rising, currently above 23%, while the country is notorious for its internet scammers, fraudsters and conmen. Nevertheless, they have over 100 million internet subscriptions, primarily on mobile platforms so the most prolific emerging economy is ripe for Bitcoin adoption, particularly since PayPal refuses Nigerian customers their facilities to receive money from overseas, precisely because they are so notorious for being fraudsters. And there is little they can do regarding internet security because it is the human element that facilitates massive corruption, even at a government level, where a simple bribe will protect you.

As a result Lagos is a unique city with a growing educated sector of youth who are moving into the freelance sector and being university graduates, they are taking work online as web designers, computer programmers and copywriters. And with their employers often overseas, they are now increasingly taking up the opportunity to receive payment in bitcoin, thanks to the local exchanges they have. Like other countries around the world with uniquely complex and varied reasons why their local currency or economic system is hampered, Nigerians are finding bitcoin to be a valuable payment alternative and currency movement platform.

The miracle of bitcoin as a global decentralized cross-border payment remittance system and dollar substitute is finding excellent use cases in Nigeria. And with their mobile telecoms industry in its eighteenth year, contributing 10.5% to the GDP, mobile bitcoin transactions are becoming easy and practical for African millennials. Yet underutilization of the technology still exists. For example data from Bitnodes shows that there are basically no nodes in Nigeria.

As we see by the Google search stats, it’s not because of lack of popularity but rather a lack of proper infrastructure in Nigeria which is limiting a more robust digital adoption. Lagos lacks a constant electricity supply. Even South Africa has been experiencing unexpected power cuts that come in phases every few months or years, lasting a few months at a time. So the lack of nodes is not surprising.

Also there is still a need for extensive education in the relationship between bitcoin and the underlying blockchain technology that can be used for many things other than finance. And retailers also certainly lag behind in the acceptance of cryptocurrency payments for goods and services. So far it isn’t seen as anything more than the ability to invest in speculative products for quick gains as opposed to a means of payment. Only South Africa registers any significant retail adoption of bitcoin on the African continent at the moment.

The current global trend is digital evolution and a potential powerhouse of Africa like Nigeria could really fall behind if they don’t join the race to embrace the new emerging digital landscape. The problem may stem from the fact that Nigeria has been burned by major scamming and internet conmen over the past 15 years and are now the global home of internet fraud. As a result they are much more sceptical about digital currency in general. For example the Russian “Mavrodi Mondial Moneybox” (MMM) scam ripped through the nation in 2016/7 and many Nigerians actually got to know about bitcoin during this scam, so see it as equally suspect.

Every country has its own unique dynamics to contend with, but Nigerians have really missed out on the benefits of blockchain due to lack of education, despite having an otherwise educated society generally speaking. In time though, once they overcome their suspicion for the unknown, they will potentially become a major hub in Africa for the developing digital economy. Organizations like the Cryptography Development Initiative of Nigeria (CDIN) and the Nigerian Blockchain Alliance (NBA) already exist and are raising awareness about cryptocurency scams, and together with agencies like the Nigeria Electronic Fraud Forum (NeFF) aim to prevent further criminal activity via the crypto industry.

If we look at charts form the Coin Dance website we can see a massive increase in bitcoin trading volume on the peer-to-peer platform Localbitcoins from 2016 onward. This is probably due to that year being the worst recession for Nigeria since 1987. At that time more companies looked to bitcoin to protect them from the economic downturn.

"Over the course of my involvement in the Bitcoin OTC scene here in Lagos, I have observed an exponential increase in the number of people adopting BTC trading. More people are getting into the business, earning steady commissions, and improving their standard of living."

Adekemi Bitire, marketing executive at IBIC OTC Exchange, Lagos

Middle class employees of companies, as well as university students really took to bitcoin then as an alternative means of income. This is due to the current reality of Nigeria being under the “weaponization of ignorance and poverty” by the ruling oligarchy, which is greatly disenfranchising the masses, who are told to live within their means - a veiled glorification of poverty among those desperate to achieve economic emancipation. As a result Nigeria is ripe for the libertarian ideals of cryptocurrency, despite those ideals being at odds with the underlying socialist politics of mass economic disenfranchisement.

In a country with 83 million registered voters, only 31 million have bank accounts, mostly in the cities. This 63% discrepancy is a huge cause for concern in a nation that could potentially be the biggest and most powerful in Africa. The same demographic was seen in Southeast Asia but there cryptocurrency adoption is increasing far faster. More user-friendly crypto payment methods in undeveloped rural areas would greatly facilitate mass adoption, and empower upwardly mobile people in pursuing legitimate channels to improve their lives. Nigeria really needs to be shown that bitcoin is more than another “hustle”.

“I think the fact that the Nigerian market is interested in crypto is good for the eventual mainstream adoption of Blockchain technology. Blockchain introduces trust in inherently trustless environments such as ours; hence, when Blockchain-powered projects (DApps) that are not overly bundled with crypto hits the mass-market, they’ll probably be quick to gain traction.”

These are the words of Victor Alagbe, COO and blockchain strategist at OneWattSolar, an energy startup looking to leverage blockchain technology in boosting renewable energy adoption across Africa. If there is one thing Africa has, its sunshine, and solar energy could really power even bitcoin mining farms in a cheap and clean process, benefitting the entire nation. So the potential is there and pioneers are pursuing the opportunities in Lagos and Nigeria as a whole.

All that’s needed is education at a grass roots level and in time useful technology and crypto financial products and services could ultimately raise Africa’s emerging powerhouse to its full potential.

Nigeria already has one of the biggest movie industries in the world, called Nollywood. Now they simply need a crypto valley of their own, which could perhaps be called Technollywood.