THE CRYPTOCURRENCY TAKE-OVER IN AFRICA
Global challenges creating a whirlwind in financial sectors of the world and Africa’s fiscal economy etc seem to have persuaded Africa’s youth to lean towards the adoption of cryptocurrency as a means of transaction. Despite the obvious attraction, several questions are still being thrown around about how cryptocurrency will finally shape the future of finance in the growing economy.
During a study conducted by Arcane crypto — a cryptocurrency research team based in Norway in collaboration with Luno, a leading crypto exchange provider, it was re-established that due to Africa’s young, digitally-driven population, rapid inflation rates, malleable currencies, and a lack of solid banking infrastructure, Africa would be a good market for cryptocurrency operations.
According to Cornmarket cap’s Q1 2020 report on cryptocurrency adoption, Africa had the second-highest adoption of cryptocurrencies worldwide. The continent had a percentage of youth growth 91.47% owing much to Nigerian’s 210.6% growth in young cryptocurrency users. Nigeria has the highest population of youths on the continent reaching about 33.7 million youths with a country whose total population is 195.9 million as in a 2018 census
At 210.6%, Nigerian youth lead the rest of the world in percentage growth of cryptocurrency adoption, far ahead of Australia (+158.07%), Spain (+120.71%), Canada (+112.45%), and Mexico (+97.33%) that make up the top 5. Although research proves the population is a major factor.
There are arguably very impressive statistics considering the cryptocurrency market was not spared from the global pandemic in Q1 2020 when the market cap plummeted by 57% to $150 billion in March 2020. Considering the socio-economic position of the average African it wouldn’t be far fetched to conclude that the main drive for African users of cryptocurrency is to buy and sell for a profit.
WHY EVERY NIGERIAN NEEDS A CRYPTO WALLET
It is becoming increasingly clear that cryptocurrency and blockchain technology together with the internet is becoming the backbone for financial transactions both new and foreseeable future.
This is for the following reasons :
1: Asset Transfer
A financial analyst according to Finjin cybersecurity blog described cryptocurrency blockchain as a ‘’large property rights database’’. This means that assets can be transferred from one party to another and the records of that transaction are kept by a decentralized record-keeping system. The records can be verified without the need of a third-party entity such as the central bank or government.
2 : Confidential transaction
The nature of blockchain technology provides an advantage that transactions can remain anonymous. This means although the record of the transaction is kept, no real names or aliases are needed. The privacy of your financial history remains a mystery to third party which reduces the risk of identity theft.
3: Transaction fees
Cryptocurrency usually reward the miners ( companies that perform special operations on transaction information) which means that there is no need to charge extra on transactions, Typical banking operations usually have ridiculous banking charges on various operations, The only charges one might encounter are charges which cryptocurrency charge for account maintenance.
4 : Adaptability
An estimated 2.2 billion people all over the world have assets to the internet and mobile facilities. This means that access to and use of cryptocurrency as a means of exchange is on the rise and increasing fast. This is especially true in Africa as it continues to experience a rise in the population of youth as a percentage of the general population. An increase in internet usage among youths and an increase in the adoption of cryptocurrency and blockchain services across the continent. The acceptability of cryptocurrency is another huge advantage. The acceptability of cryptocurrency for international transactions is no longer in question. The dollar in recent times is beginning to lose its value as a central currency for international transactions due to its volatility as a result of faulty fiscal policy decisions and the general instability of the global economy in recent times due to the coronavirus pandemic.
5: Increase in value
These last few weeks have seen a significant increase of cryptocurrencies like Ethereum and Bitcoin to all-time highs even as oil prices and other prices and other currencies, assets are reducing its value,
Even though cryptocurrencies are susceptible to a lot of positive and negative changes in the short run, they have proven to be an excellent store of value in the medium and long term. This is because unlike money that has no real value on its own apart from the fact that it is trusted by the general public and backed by the government, Cryptocurrencies like Ethereum have intrinsic value. This is because of the technology which the blockchain operations are based upon, Ethereum is also a platform upon which third-party software can run.
Not to mention the fact that the increase in trust of cryptocurrency worldwide continues to cause the value to increase
