Blockchain Technology in Nigeria 2022
Blockchain Technology in Nigeria 2022
Blockchain Technology in Nigeria 2022
Blockchain technology in Nigeria. The blockchain is based on a decentralized system and is a form of database that holds records of all the transactions, and the blocks are an encrypted form of these records. The blockchain-primarily works with crypto coins and orders these processes.
Blockchain is a secure digital ledger of economic transactions that can be programmed to record financial transactions and virtually everything of value. Blockchain technology could eliminate banks and other financial institutions by facilitating direct transfers between people and businesses.
Blockchain technology is currently gaining momentum in Nigeria, and it holds so much potential for diversification and growth. With this technology, Nigeria could grow even more significant than it already is.
Why did they ban Blockchain Technology in Nigeria?
Blockchain technology was banned in Nigeria by the Central Bank of Nigeria (CBN) on the 5th of February 2017. The CBN circular directed all Deposit Money Banks (DMBs) to close accounts with customers operating cryptocurrency exchanges immediately. According to the CBN, this ban is that cryptocurrencies are being used for money laundering and other illegal activities.
The CBN circular also said that the anonymity associated with cryptocurrencies make it attractive to criminals involved in money laundering, terrorism financing and other illegal activities. Therefore, they have decided to exercise caution by not having anything to do with cryptocurrencies.
To put it more Clearly,
One of the reasons for the ban on blockchain technology in Nigeria was anonymity. This is because it is a decentralized network.
The first reason why blockchain technology was banned in Nigeria was security issues. The central bank officials were worried that criminals and terrorists could use this technology to launder money.
The second reason why blockchain technology was banned in Nigeria was privacy issues. The central bank officials were worried that the anonymity of blockchain technology could be used by criminals to hide their identities.
The third reason why blockchain technology was banned in Nigeria was financial stability concerns. The central bank officials were worried that many people using blockchain technology could cause a liquidity crisis, which would affect the stability of the financial system.
The fourth reason blockchain technology was banned in Nigeria was that they thought it would hurt local businesses. They were also worried about scam artists who could use this technology to steal money from people. The government felt that banning blockchain technology would help prevent these things from happening.
Why crypto is booming in Nigeria despite govt ban
Nigeria’s crypto scene is thriving. According to a report by Blockchain Atlas, the country has the highest number of cryptocurrency users in Africa.
The most recent statistics show that Nigeria is home to about 2.4 million cryptocurrency users, about 83% of all crypto users in Africa, which has been steadily growing since 2018.
Nigeria’s crypto boom has not gone unnoticed by regulators. The country’s federal government banned cryptocurrencies in 2017 and 2019, while the Central Bank of Nigeria (CBN) issued a circular barring financial institutions from facilitating crypto transactions.
But the CBN ban, which came into effect on February 5 2021, has done little to stop the boom.
The growth is not far-fetched: the economy is in crisis, and people are looking for ways to hedge against inflation and make money.
Despite the ban, cryptocurrency trading has boomed in Nigeria during the past year. According to data from LocalBitcoins, peer-to-peer Bitcoin trading volumes in Nigeria averaged over $3 million per week.
Nigeria’s crypto market is driven by two primary factors: a largely unbanked population and a weak currency.
The recent recession caused by COVID-19 has led to more people seeking alternative means of income apart from their regular day jobs which have been rendered useless due to lockdown measures across the world.
Going by its decentralized nature, blockchain technology makes it easier for users to access information on their smartphones or laptops from anywhere at any time.
NFTs boom in Blockchain Technology in Nigeria
Have you ever heard about NFTs? You probably have, since it is everywhere at the moment. If you are still not familiar with this term, don’t worry. Here you will find what NFTs are and how they work.
What is an NFT?
NFT stands for “nonfungible token.” Even though fungible items can be exchanged for other ones of the same type, nonfungible assets are unique and cannot be replaced by others of the same kind. In simple words, fungible items can be traded and exchanged because they have the same value as others of their kind. Let’s take an everyday example to understand better: gold bars or dollars can be traded and exchanged because they have the same value as other gold bars or dollars. However, a painting or a house cannot be exchanged because they are unique and have different values depending on the subject depicted in the photograph or on the location of the house.
Nonfungible tokens are digital assets that represent something unique such as artworks, music tracks, collectibles such as CryptoKitties, or even real-world property like homes or cars. They are recorded on blockchain like cryptocurrency (Bitcoin), but their value can vary.
For instance, a painting is an NFT — it’s something that can’t be broken up into smaller pieces and sold individually. Real estate is also an NFT.
NFT Boom in Nigeria
According to a report by NewsLogical on April 23, 2021, NFTs are experiencing a boom in the Nigerian space as investors and artists look to join the craze. The report states that since February 2021, there have been over $2 million worth of transactions involving Nigerian NFTs. This represents about 35% of all transactions on the African continent for that period.
These happenings will have a significant impact on the Nigerian Economy. Blockchain technology in Nigeria is an innovative way of solving developmental challenges in our society. It will make you have a lot of effortless money by investing in a project that you think can make your life better.
Blockchain technology can be the solution to many of the issues plaguing the government in Nigeria as it will eliminate corruption and increase transparency in the government.
In conclusion, we can see that blockchain technology comes with the potential to solve many issues in the Nigerian Economy.
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