HOW BLOCKCHAIN WORKS IN NIGERIA: Have you ever thought of an easier way to get financial transactions completed within an instant, without having to really deal with the hassle of centralized banks? Imagine you have to send money to your family members, you send money to your parents but when you try to send the same money to your siblings during that same time frame, the transactions fail.
This failure can be a result of a number of reasons; technical issues, there was a hack in the bank, their servers were down, the receiving account was accidentally restricted, there was a database issue, the daily transfer limit being exceeded, additional charges that may result to insufficient funds, etc.
All of the issues highlighted above can be solved with the use of blockchain technology to create cryptocurrency. Cryptocurrencies are a form of highly secured virtual currencies which are immune to counterfeiting, don’t require a central authority, and are encrypted and protected by strong cryptography algorithms.
HOW BLOCKCHAIN WORKS IN NIGERIA
Nowadays, there are thousands of cryptocurrencies (Ethereum, harmony, ripple, cardano, vechain, seedify, shiba-inu, tron, avax, solana, litecoin etc.) available for use worldwide, but one ranks the highest: BITCOIN! Cryptocurrency is so unique, in that it’s transactions are available in a public ledger. For each time you send a cryptocurrency e.g. bitcoin, from one person to another, a block is created in the public ledger with the transaction details permanently inscribed on it. These blocks regarding the sender’s transactions are continuously linked to each other, taking reference from the previously created block and eventually creating a BLOCKCHAIN. So, in essence, blockchain is a collection of linked public financial records protected by cryptography that makes it highly resistant to alteration.
Every user in the blockchain network is in possession of two keys; a public key and a private key. The public key is the same as the “wallet address” that everyone on the network knows of and can easily get access to.
The private key is a unique address only the user has knowledge of, it is something like a password to get access to the wallet. In the diagram above, the user passes the number of coins he/she wishes to send as original data along with his/her public key, this enters what is called a “hashing algorithm” in the scrambled data portion which is encrypted with the private key of the sender to digitally sign the transaction. The receiver then uses his/her own private key to decrypt it back to the original data.
As of 2022, Nigeria ranks in the top 5 countries with the highest consumers of bitcoin (amongst other cryptocurrencies) in the world, and this is due to economic reasons. Cryptocurrency is helping people achieve financial freedom. Most users prefer to store their money in virtual currencies other than fiat because of fiat devaluation, and other inadequacies in the centralized financial industry.
This is not the only way in which Nigerians are making use of the blockchain technology. Blockchain technology has given room for innovation in the financial sector, with young entrepreneurs sourcing for funding from VC’s to create cryptocurrency exchange platforms for users in the country and spanning across Africa in the process. We would not delve deep into what the products they offer, but notable among these include;
DartAfrica, where you can easily swap cryptocurrency for fiat when needed and get paid instantly, reducing the need for a third party.
Bitmama is another startup providing numerous services from p2p exchanges, copy trading, to virtual and physical cards.
Mara also provides exchange services and also go as far as providing an academy to enlighten interested people about the benefits of the blockchain.
The Central Bank of Nigeria went ahead to create it’s own cryptocurrency, the eNaira, which has not been much of a success as citizens find it difficult to trust a government who flagged local bank accounts that were involved in cryptocurrency transactions. The reason for this according to them was it poses a danger to the country’s financial system.
Adoption of blockchain technology is rapidly growing in Nigeria, as people are beginning to see it as a better, faster, and more secure form of payment. People also create communities and actively participate in airdrops, AMA’s, whitelisting, etc, steady on the look out for new coin listings on top crypto exchanges as a form of investment opportunity.
Although the recent state of the cryptocurrency market has been upside down as a result of the issues affecting Terra Luna, FTX, Celcius, Wormhole, Voyager, BlockFi etc leading to their failures, this has not put the whole market in disarray, as there is hope for a great comeback.