Read more about FinTech
You may recall that, in 2020, Nigeria was named the second biggest market on Paxful, a global cryptocurrency exchange platform, just behind the United States. Most of the excitement about these digital coins stems from the fact that they can be traded like commodities. But while most cryptos have been used this way, people and businesses are now starting to adopt these assets as units of exchange, just like fiat (e.g. the naira). The thinking in many quarters is that, at some point in the future, digital currencies (or an evolved version of them) will be the medium of exchange for economies around the world. But is cryptocurrency really the future of finance, as many crypto analysts claim? Is there a chance that Nigeria will give up the naira as it is for a blockchain-enabled electronic coin?
Are Cryptocurrencies Actually Currencies?
For cryptocurrencies to assume the status of actual money, it has to be all of these at once:- A medium of exchange.
- A unit of account.
- A store of value.
Why Would We Want Cryptos To Replace Fiat?
Let’s pick up on the point made about cryptocurrencies as a store of value. As the Bitcoin example shows, some digital coins have become more valuable over the years. That’s because:- Demand for them is growing, and
- There’s a cap on the number of cryptos that can be produced (‘mined’)
Sign up to the Connect Nigeria daily newsletter
Another reason for Nigerians’ enthusiasm for these coins is that it decouples their finances from the formal financial system. So they can trade with it, and utilize it for cross-border transactions, without incurring costs imposed by the apex bank, money transfer companies, and other financial institutions. Given this decentralization and the international use of cryptos, one or a few cryptocurrencies could become a global unit of exchange. Numerous consequences may arise from this; for example, businesses can expand their services to reach people in another continent, and take payments for those services in a universal cryptocurrency. It could also make it easier to track fraudsters. Every transaction that occurs on the blockchain is time-stamped and open to reference by members of the public. So if there’s a fraudster involved in a Bitcoin transaction, you can track his or her withdrawals, deposits, and transfer on the chain. Concerns About The Negatives Of Cryptos In February 2021, Nigeria’s apex bank (the CBN) banned banks from processing transactions linked to people who traded cryptocurrencies. Its officials said they were concerned about the use of cryptocurrencies to launder money or finance illegal activities. Although there was widespread cynicism about the CBN’s explanations, some of its claims did point to reality about digital currencies. The system is mostly unregulated, and criminals may exploit this to rob their victims. It’s hard to halt a transaction after it starts. This is due to the nature of the blockchain; the system is built to not allow reversals, regardless of the intention of the parties involved. This problem does not exist with regular currencies. But security is still a challenge for individuals and exchanges involved in trading cryptos. Many of these have had their coins stolen by unknown assailants. The following objections stand out. First, there’s a limit to the number of cryptocurrencies that can be produced over time. This means that, as the years go by, specific cryptocurrencies will become rarer, and they will be worth much more in the future. Simply put, they are prone to deflationary trends. This could weaken the economies that use it over the next several decades. If you’re going to accept cryptocurrencies as payment for your services, you have to bear the volatility that comes with them. The market value for cryptos may swing rather sharply in a single day. Finally, you will need a lot of energy to power the crypto mining and transaction processes. The global carbon footprint generated by Bitcoins alone is more than the carbon footprint of countries like Nigeria and Argentina. If the world wants to replace fiat, it will have to solve this energy requirement problem.
The Promise Of Cryptocurrencies
Some experts insist that the challenges discussed here are surmountable. We just need to improve existing technologies and build new ones that can sustain crypto transactions. Regular people also have to get on the crypto train. In the end, the fate of cryptocurrencies and decentralized finance will be determined by the government’s reaction to them. For Nigeria, this part of the crypto story has only just begun. Featured Image Source: MediumGot a suggestion? Contact us: editor@connectnigeria.com
You might also like:
- Boost Your Business Visibility with Connect Nigeria’s Christmas Deal
- How to Build an Effective Email Marketing Strategy
- Top 7 Strategies to Grow Your Email Subscriber List
- Why Successful Business Owners Prioritise Email Marketing
Has anyone shopped at Wild Bill’s Tobacco Vape Shop located in 3905 West 96th Street, Suite 300?
Is anyone here in a position to recommend Hen Party Gifts? Thanks x
Good Afternoon everyone , can anyone recommend where I can buy CBD4you?
Has anyone shopped at Dumbcloud Vapor Vape Store in 8584 Us Highway 51 N?
Has anyone ever vaped The Source E-Juice E-Juice?
what is rw hemp cbd oil
Is anyone here in a position to recommend Off The Shoulder Tops? Cheers xox
can cbd oil cure cancer
how does cbd act on pain
Does anyone have any idea East Coast Vapes llc vaping shop based in 5407 S Harlem Ave sells e-juice manufactured by Milkee Bunz eJuice? I have emailed them at vaporstop@gmail.com
Has anyone vaped Vibe eJuice Eliquid?
are all flavored vape juices banned
Has anyone shopped at EZ-Vapes Vape Shop located in 11 Dolphin Lane?
Does anyone know what happened to Dime Piece LA celebrity streetwear brand? I cannot proceed to the checkout on Dimepiecela site. I have read in Marie Claire that the brand was bought out by a UK-based hedge fund for $50 million. I’ve just bought the Shatter Ceilings Yoga Duffel from Amazon and absolutely love it xox
Does anyone know what happened to Dime Piece LA celebrity streetwear brand? I seem to be unable to proceed to the checkout on Dimepiecela site. I have read in Women’s Health Mag that the brand was acquired by a UK hedge fund in excess of $50 million. I’ve just bought the Dimepiece Death Metal Unisex Heavy Blendâ„¢ Hooded Sweatshirt from Ebay and totally love it xox
how to do you take cbd oil
Has anyone shopped at Vape Dynamiks Vapor Store located in 8908 McClellan Blvd?
Do you think these can help me with depression:: Liquid Honey Tincture 50MG by JUSTCBD and Delta 8 Disposable Cartridges by JUST DELTA. No shop seems to have them in stock. thank you xox
Do you know of any online or brick-and-mortar store that sells: CBD Capsules 2 Pack Ease And Discomfort Formula by JUSTCBD and 1000mg HHC Gummies by JUST DELTA. Unbelievable! Nobody has them in stock. thank you xox
Has anyone been to The Vapor House? 😉
Good Afternoon everybody , can anyone suggest where I can buy Irwin Naturals CBD Capsules CBD Fat Reduction 15mg?
Has anyone vaped Saltwater by Coastal Clouds E-Liquid?
Has anybody ever shopped at Studio Vapes Ecig Shop located in 10815 W Jewell Ave Suite K?
By way of introduction, I am Mark Schaefer, and I represent Nutritional Products International. We serve both international and domestic manufacturers who are seeking to gain more distribution within the United States. Your brand recently caught my attention, so I am contacting you today to discuss the possibility of expanding your national distribution reach.We provide expertise in all areas of distribution, and our offerings include the following: Turnkey/One-stop solution, Active accounts with major U.S. distributors and retailers, Our executive team held executive positions with Walmart and Amazon, Our proven sales force has public relations, branding, and marketing all under one roof, We focus on both new and existing product lines, Warehousing and logistics. Our company has a proven history of initiating accounts and placing orders with major distribution outlets. Our history allows us to have intimate and unique relationships with key buyers across the United States, thus giving your brand a fast track to market in a professional manner. Please contact me directly so that we can discuss your brand further. Kind Regards, Mark Schaefer, marks@nutricompany.com, VP of Business Development, Nutritional Products International, 101 Plaza Real S, Ste #224, Boca Raton, FL 33432, Office: 561-544-0719
Can someone recommend Mens Novelty Underwear? Cheers xxx
Has anyone shopped at Vapor Cloud Ecigarette Shop in 625 broadway suite 140?
Good Afternoon everybody , can anyone recommend where I can purchase CBDfx CBD Tincture Wellness 2 1 Tincture 500mg 4000mg?
Hi everybody ! can anyone recommend where I can purchase Nuleaf Naturals?
Does anyone know what happened to Dimepiece Los Angeles celebrity streetwear brand? I cannot proceed to the checkout on Dimepiecela site. I have read in Harpers Bazaar that they were acquired by a UK hedge fund in excess of $50 million. I’ve just bought the Dimepiece Retro Unisex Heavy Blendâ„¢ Crewneck Sweatshirt from Ebay and totally love it xox
CBD Gummies https://royalcbd.com/cbd-gummies/
CBD Pet Treats https://www.charlottesweb.com/all-charlottes-web-hemp-cbd-supplements/cbd-gummies
how to turn cbd crude to distillate
Has anybody been to Vape Supreme? 🙂
wow, what a post
I love it when individuals come together and share ideas. Great blog, stick with it!