There’s a lot of uncertainty around the future of Cryptocurrency in Nigeria right now. In addition, recent events have made it challenging to use crypto here.
The Central Bank of Nigeria banned banks from enabling cryptocurrency transactions on the 5 of Feb 2021, which came with a lot of turbulence in the Nigerian crypto space. But knowing the relentless spirit of Nigerians, another path to making these crypto transactions emerged.
The ban on Cryptocurrency was established due to its decentralized nature. The government is concerned that crypto would be a means to carry out unlawful transactions. The Nigerian government also issued a warning to the citizens to avoid the risk of being scammed of hard-earned money to crypto.
This ban on the use of Cryptocurrency has become a challenge to Nigerians. However, we can find different ways of transacting crypto with peer-to-peer as the number one option. Transacting this way has been going on for a while, but it became a trend after the ban. Before the ban, people could link their bank accounts with their crypto wallets.
Presently, the bans and warnings from the Nigerian governments have been a basis for why till today, many people in Nigeria find it problematic to accept Cryptocurrency as a means of exchange.
The lack of knowledge on Cryptocurrency and how it works has made many Nigerians see it as a scam and the Nigerian government banning it in the first place. They introduced the Nigerian version of a digital currency called E-Naira.
Now, let’s give a breakdown of what Cryptocurrency is and how it works.
Table of Contents
What is Cryptocurrency?
Cryptocurrency, or crypto, as enthusiasts fondly call it, is a digital or virtual currency used for transactions.
The beauty or advantage of this digital currency is that the government does not regulate it like the physical currency. It is a decentralized economy where anyone can do however they please with their money without any regulatory body.
How Does Cryptocurrency work?
As its fans fondly call it, crypto is any currency that only exists in the digital world. It is a digital payment forum that does not depend on physical financial institutions to verify transactions. Instead, it operates a peer-to-peer system (P2P) that allows anyone to receive payments seamlessly. For instance, Abiola in Nigeria can send money to Amy in Chicago, and someone in Tibet can send money to another person in Jamaica. All this is accomplished without hidden charges.
Cryptocurrency is encrypted, making it difficult for hackers, albeit possible to be hacked by intruders.
The first Cryptocurrency was Bitcoin, founded by a group of people under the pseudonym Satoshi Nagamoto in 2009.
Now, Bitcoin wasn’t welcomed with an open arm. On the contrary, people were skeptical; rightfully so, because this payment system had no face to it. However, with the rise of bitcoin in 2014, people began to pay more attention to the system and understand how it works.
This currency, known as Cryptocurrency, runs on a distributed public ledger known as the blockchain. Discussing the future of Cryptocurrency won’t be ideal without looking at blockchain. Let’s look at what a blockchain is and how it works.
What is Blockchain?
Blockchain is the powerhouse that stores every cryptocurrency transaction. Therefore, every transaction done using crypto can be effectively traced or tracked by the blockchain.
Now, think of a blockchain as a digital footprint from which everything can be traced. It is the technology that many cryptocurrencies operate on; it has its unique way of keeping records.
Blockchain is the technology designed solely to make transactions more secure by recording data in multiple locations, making it harder for hackers to tamper.
A blockchain is a distributed ledger(DLT) that allows record-keeping across multiple computers called “nodes .”Nodes verify, authorize, and store data within the ledger.
A blockchain categorizes data added to the ledger into blocks (visualize the arrangement of blocks used for building). Each block can only hold a specific amount of data; new alliances are continually added to the ledger forming a chain.
Each block has its unique identifier called “hash .”The hash safeguards the data within the block from intruders. Once data is added to the blockchain and encrypted within a hash, it becomes permanent and unchangeable.
The Future of Cryptocurrency
The crypto market is an all-time booming digital currency, and it is projected to get bigger as financial analysts have projected that bitcoin will hit an all-time high of $5 billion by 2030
There have been talks by Nigeria crypto enthusiasts that crypto might get unbanned after the present government leaves office. It is, however, not feasible as the future of Cryptocurrency looks quite possible. Furthermore, to have Cryptocurrency banned in Nigeria, many papers will have to be done and signed by relevant government bodies. Therefore, a viable future of Cryptocurrency in Nigeria would only be possible if its ban is lifted.
However, it has been suggested by investors and lovers of crypto that, instead of placing a ban on it, which will impede the future of Cryptocurrency, the government should regulate it. Yet, they are worried about many of the consequences of regulation.
The Nigerian government has deemed crypto a scam venture used for money laundering and terrorism. Of course, we can not negate that people are getting scammed on various crypto platforms every day, but that doesn’t mean other good investors and traders should pay for the sins of these rotten eggs.
Nigeria is now ranked second only to the US for trading bitcoin. The volume of crypto received by users in Nigeria despite the ban is high. The proper order of crypto surging through Africa’s fastest economy will likely be much more significant if not for the ban. Although, many trades are untraceable by critics.
In 2021, we witnessed the rise of Bitcoin, which is the highest currency in the world of cryptocurrencies, but this “high” is unstable as it keeps showing inconsistency on market charts. For instance, the Luna coin, which was $118 and went down to $0 in less than one week!
This volatility is a big part of why experts recommend keeping your crypto investments to less than 5% of your portfolio to avoid a financial crisis.
But how high will this virtual currency go? Excerpts say it’s only a matter of when not if.
Can I Buy Cryptocurrency in Nigeria?
Crypto can be bought and used as a means of transaction in Nigeria. Even with the stringent ban by the government of Nigeria, there are various crypto platforms where lovers of this virtual currency buy and trade, and you too can get on these platforms with ease as most of them are easy to navigate.
Despite the constraints hampering Cryptocurrency, Nigerians are inventing solid and secured platforms to use crypto for different purposes such as trading, investing, spending, etc.
To help more crypto users and enthusiasts understand the ins and outs of Cryptocurrency and reduce the rate of crypto scams and frauds, we explored and came up with a list of prudent crypto platforms that will guarantee the utmost security and protection for Nigerians willing to trade.
Platforms Where You can Buy and Trade Crypto in Nigeria
The following platforms are where you can buy and trade Cryptocurrency in Nigeria.
Binance is one of the most used crypto platforms by many Nigerians. This crypto platform is available in almost all African Countries like Nigeria, Kenya, etc.
The platform offers multiple crypto options. You can trade and exchange Cryptocurrency using this platform. It also allows you to set up and build your crypto portfolio. Before you get started on this platform, you must verify your identity. You can use your NIN or voters card for this. Once you’re verified, you can begin trading. Also, this platform provides a tutorial on how to trade; binance academy, helping newbies learn and ensuring the future of Cryptocurrency in Nigeria.
To get started, click Binance, which offers 24/7 customer service support. This platform holds your hand through your trading and exchange experience.
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This platform is one of the easiest and safest platforms to buy and sell crypto. Coinbase makes it very straightforward for anyone to kick off their crypto portfolios.
To get started with Coinbase;
- Create an account
- Link your bank account
- Start buying and selling
Coinbase has built a reputation that allows users to trade and exchange their crypto with adequate security.
The coindirect platform is most convenient for business and private clients. With this app, you can sell and buy over 40 cryptocurrencies such as bitcoin, Ethereum, Solana, etc.
The Luno app has been one of the most popular crypto platforms for years. This app is easily navigated by both old and new traders.
The platform is user-friendly for anyone who wants to buy and sell cryptocurrencies.
Paxful is another excellent platform where you can do anything related to Cryptocurrency. You can buy, sell, save, invest and even earn in crypto using the Paxful platform.
With over 6 million users, Paxful meets all their cryptocurrency needs, making it a trusted platform to trade and invest.
The platform offers its users numerous payment methods to trade their cryptocurrencies.
You can get started with this platform by clicking on Paxful.
Buycoins is among the simplest and banked-on places to start your crypto journey, especially if you are a Nigerian. With the platform, you can begin your crypto trading with as low as N500.
To get started with Buycoins, all you need to do is to follow these procedures;
- Create an account on the Buycoins platform.
- Link your local bank account to the Buy coins account. This is to enable you to make deposits and withdrawals.
- You can now start buying and selling your cryptos.
These platforms have verified, reliable, and secure means of trading crypto, showing that the future of Cryptocurrency in Nigeria is secured. Moreover, they are user-friendly and available for all stages of crypto users to comprehend how Cryptocurrency works.
This article has given an insight into the future of cryptocurrency in Nigeria. The prospect and feasible ways on how it can be controlled from the invasion of hackers. Despite the ban, it has also listed verifiable platforms where every Nigerian can easily trade and invest in this digital currency.
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Rabi Yahaya is a content writer whose works have been published by prominent websites in Nigeria.
Remotely works with local and international clients to create engaging content for brands. Creating compelling articles and stories that talk about issues concerning women. A budding SEO writer.