Nigeria, the most populous African nation is gradually warming up to Bitcoin even though its adoption rate is still low. Unlike other countries in the continent like South Africa, where you can find a Bitcoin ATM, the same cannot be said about the West African country. However, the latter can be attributed to a number of factors.
Google Trends shows that Nigeria has made the most searches for the term, “Bitcoin” more than any other country. A State like Lagos is among those with the highest search volume. Given that it is one of the most-tech inclined states in the country, it does not come as a surprise. Nigeria is also one of the top 4 countries that transacted Bitcoin in 2018, the others being the U.S., China, the U.K., and Venezuela.
Limited Payment Options Triggers Bitcoin Adoption
Currently, a number of youths who have turned to importation, blogging, and freelancing deal with customers abroad and as such, they have to send and receive cross-border payments. However, there are limited options to receive the US dollar and even convert it to the country’s local currency, Naira. PayPal, for instance, has limited the African nation from receiving funds and only allows them to send payments.
As a result, people have come to rely on Bitcoin since there are no restrictions as to who can use it and how. All that is required, is to set up a Bitcoin wallet and then make a purchase from cryptocurrency exchanges or peer-to-peer platforms. Thus, the digital currency has become a substitute for the dollar.
Unemployment Rate Turns Attention to Bitcoin
The rate of unemployment in the West African country has also made Bitcoin seem like a get-rich-quick scheme. The unemployment rate rose to 23 percent in 2018 which has drawn more graduates to online jobs. In this aspect, a number of tech-inclined individuals have resorted to trading Bitcoin in order to make a profit. LocalBitcoins, for instance, reported a 1400% increase in Bitcoin transaction on the platform as of March 2018.
Blockchain Startups Foster the Adoption of Crypto
The interest in cryptocurrency can also be attributed to the efforts of startups in the region. An instance is the case of Kubitx, a crypto startup which launched the first cryptocurrency exchange in Nigeria in October 2018. Kora, a Blockchain startup also revealed in September 2018 that it is going to use Blockchain technology to bring about low-cost cross border payments.
In the same vein, Pundi X, an Indonesian payments and blockchain company introduced POS devices in the region in order to facilitate Bitcoin payments. According to Pundi X at that time, the introduction of these devices in Nigeria is because it is the most populous black nation where the cryptocurrency industry is massive and successful.
Despite Interest in Bitcoin, Adoption Rate is Still Low in Nigeria
Despite the sudden interest in Bitcoin, the region is yet to create significant use cases for the virtual asset. Coinmap reports that there are currently no shops in the region that are accepting Bitcoin. Asides that, use cases have not been created with the use of the blockchain to track supply chain as is evident in some countries.
Bitcoin mining has not found roots in the region given that it is still struggling with good power supply. Thus, it would be difficult to run a mining farm that demands high power consumption.
Events like MMM, a Ponzi scheme that was once paraded as an investment of a lifetime have left a sour taste in the mouths of many. It has also given them a negative impression of Bitcoin, another investment opportunity that promises profit without doing anything.
Over-Reliance on Financial Institutions
While many Nigerians have come to rely on banks to hold their money, others as of 2019 are still unbanked. The latter can be linked to the Independent National Electoral Commission’s (INEC) report of 83 million registered voters whereas the Central Bank of Nigeria (CBN) revealed that only 31 million people own a bank account. As such, the huge margin means there are still a number of people who do not own a bank account or feel they have not made enough money that warrants being saved.
This and many more have retarded the adoption of Bitcoin in the region and it is believed that the country may once again be backward in the advancement in this modern technology.