As the cryptocurrency bug in the country continues to spread, many Nigerians have decided to form groups in order to learn more about them. An informal sector has also sprung up, in response to increased demand.
Nigerians have been lured, like the rest of the world by the huge returns made from cryptocurrencies in 2017, with some appreciating as high as 10,000%
What are the benefits of this ?
Trading cryptocurrencies still remains fairly technical, for a large percent of the population. Unlike other financial assets, wrong cryptocurrency transactions can not be reversed. There are also no authorities to indemnify one’s losses.
Several of the groups masquerading as bitcoin experts are more interested in pushing their own Initial Coin Offers. Learning in a community filled with individuals one is familiar with reduces the risk of fraud.
Government has called for caution
The government through the Central Bank of Nigeria (CBN) has asked Nigerians to exercise caution when dealing with cryptocurrencies in view of the highlighted risks. The apex bank has however held stakeholder workshops and plans to establish several departments in respect of blockchain and cryptocurrencies.
In the finance world, opinions have also been divided. Prominent figures like Jamie Dimon and Warren Buffett have called cryptocurrencies a bubble. Others like Nassim Taleb, are however of the opinion that they solve the weaknesses of fiat currency.
Some countries have clamped down
Countries such as China and South Korea have taken a much harder outlook. China last year banned its citizens from buying cryptocurrencies and asked exchanges to shut down. News filtered last week that the country had plans to ban cryptocurrency mining in the country. South Korea has also asked exchanges to stop anonymous accounts from trading.
Where the real value lies
While the financial gains quite attractive, the real value is in the blockchain technology that powers cryptocurrencies. Blockchain technology could be applied to several areas of the economy such as the capital market, and land registration.
