It is a fact that Nigerians have continued to dance harder than ever in the crypto party in recent years. Contemporarily, even if you’re not trading crypto, it is rare not to have a friend or know someone that trades cryptocurrencies or invests in digital assets long or short term.
Leading the charge and being at the forefront of crypto adoption on the continent, an IMF report late last year says Nigeria has one of the highest numbers of crypto users on the African continent. Similarly, Cointelegraph reported that Nigerians are the most “crypto-crazy” nation as they rank first among 15 countries surveyed according to Google and other search engine’s data,
However, despite all the hype and frenzy surrounding crypto trading and ownership in the West African country, many citizens, especially the older demographic, still believe crypto is a scam. A fluke that would fade with time.
We’ve seen instances where folks who haven’t bought or used cryptocurrencies for once jump to conclusions based on hearsay or half-baked research. All these are a pointer to the importance of crypto education in developing regions like ours, but this article is not about that.
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Below are reasons why some Nigerians believe crypto is a scam.
It enables criminal activities
Due to its pseudonymous nature, there is a popular misconception among Nigerians that bitcoin is a currency for internet fraudsters and scammers. This narrative gained more acceptance amongst the populace when the legendary internet fraudster, Hushpuppi was caught with $15.3 million worth of bitcoin in 2020.
It has also been discovered that internet romance scammers, popularly known as ‘Yahoo Boys’ prefer to get payments from their ‘clients’ through bitcoin and other cryptocurrency payment methods due to the technology’s untraceable nature. All to the detriment of crypto’s credibility in the mindset of several Nigerians.
However, this misconception has been proven to be patently incorrect, thanks to data made available by the transparent nature of crypto transactions. The latest data from Chainalysis show that just 0.15% of the total volume of cryptocurrency transactions is associated with criminal activity.
By comparison, 3% to 5% of the global GDP is estimated to be associated with criminal activity. This implies that the rate of criminal activity in traditional finance is much greater than criminal activity in the cryptocurrency world.
Crypto will make you lose your money
This might be excusable. I would also believe crypto is a scam if my friend who invested during the market boom of 2020-2021 referred me, and I got caught up in the dreadful bear market and intermittent crashes of 2022. Nobody would have told me to change my mind that crypto is all hype and “you will lose all your money.”
The problem with this narrative is the kind of crypto education that Nigerians get. Many influencers preach crypto as a get-rich-quick scheme, so retail investors get devastated whenever the tide doesn’t move in their favour quickly.
Indeed, Bitcoin, the most popular cryptocurrency, has experienced massive volatility, including several crashes of 70% or more, but at the end of the day, it is an asset with inherent value. That value is based on its utility as a global payment, which means that it is open to anyone worldwide and can settle transactions, big and small, in minutes.
This is a reason to be passionate about Bitcoin as a great investment tool and long-term store of value. However, the volatility means that if you’re treating Bitcoin as an investment, you must perform due diligence by doing proper research before investing.
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Bitcoin cannot be spent in real life
Many people still regard cryptocurrencies as ‘internet magic money’ with no intrinsic real-life benefits. This is justifiable because it is difficult to believe that crypto can be used for everyday transactions in a country like Nigeria, where the Central Bank has placed stringent rules on crypto activities.
Until now, there has been a dearth of outlets accepting crypto payments in Nigeria. Also, there is a shortage of bitcoin ATMs. According to Coin ATM Radar, only two BTC ATMs exist in the country. They are situated in Lagos and have questionable functionality.
All these have strengthened the belief that bitcoin is just an electronic currency that serves no purpose in real life, putting its credibility in doubt.
Nevertheless, crypto is increasingly proving to be a tool for financial speculators and a valuable medium of exchange. In places like South Africa, you can spend cryptocurrency at physical retail locations and in even more e-commerce shops online.
Hopefully, when structures are established in Nigeria to embrace crypto payments and usages, Nigerians will realise that bitcoin can truly be spent in real life.
Lastly
Crypto and the technology behind it serve as a powerful force for good. However, the lack of crypto education and misinformed thinking has not made many Nigerians realize that crypto has the potential to protect individuals and society from all financial repression, making it foundational to peace and prosperity.
Nevertheless, as the technology becomes increasingly popular, those misconceptions will be cleared gradually, and more Nigerians will understand crypto’s true nature.
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