Young Africa Looks to Crypto for Payment 3206 Total views 250 Total shares Data from Google Trends shows that Lagos, Nigeria ranks as the number one city based on the volume of online searches for Bitcoin ( BTC) . While this data may indicate a high level of interest among the city's approximately 21 million people, it has yet to equate to tangible adoption of the emerging trend of technology.
But that is changing, as a growing movement among young people frustrated with existing payment systems looks for alternatives. Bitcoin as a dollar substitute For the most part, “Lagosians” who are aware of the existence of Bitcoin see the top-ranked cryptocurrency as a substitute for the United States dollar. BTC exists for them on a spectrum that lends itself as a viable substitute for foreign currency.
Payment companies like PayPal do not allow Nigerians to receive money transfers from abroad, thanks to the notoriety of internet fraudsters in the country — and the companies that offer such services usually charge high fees.
Thus, it is common to see the city's growing freelancing community beginning to pivot toward cryptocurrency payments. Many of the youth in the city, having battled with underemployment or unemployment, have sought to try their hands outside the traditional working environment.
The National Bureau of Statistics (NBS) reports that Nigeria's unemployment rate rose to above 23 percent in 2018. In a city like Lagos, many young university graduates can be seen making a living as freelancers, offering services from copywriting to website design and even computer programming.
Given that many of their clients are based abroad, there can be issues with receiving payment for the work done. However, with a BTC wallet and a plethora of local exchange services, these freelancers can receive payments easily from clients spread across the globe.
Apart from freelancers, business owners are also using Bitcoin, as well as other crypto-focused platforms, as substitutes for foreign currency and banks. Companies like BitPesa offer easy access to liquidity, which can be a hassle to businesses in frontier markets like Lagos, especially in the context of foreign trade.
In a private message to Cointelegraph, Victor Alagbe, the Chief Operating Officer (COO) and Blockchain Strategist at OneWattSolar, an energy startup looking to leverage blockchain technology in boosting renewable energy adoption across Africa, said:
“I see crypto taking up a strong position in the remittances space. It’s often cheaper, less stressful (in terms of documentation) and faster to send and receive crypto. Many younger folks in the diaspora are now leveraging crypto to send money back home. Some techies working remotely are also getting paid in crypto.”
In 2001, the government at the time introduced mobile telecommunications technology to the country. In the 18 years since that landmark event, mobile telecoms have become a significant sector in the nation's economy, contributing 10.5 percent of its gross domestic product as of mid-2018.
Nigeria has over 100 million active internet subscriptions, mostly on mobile platforms. Bitcoin as a payment technology leverages on this access to the web, allowing tech-savvy Nigerians to participate in the growing cryptocurrency trend. Bitcoin underutilization
While the peer-to-peer (p2p) trading aspect of the emerging BTC narrative continues to take shape in Lagos, there is a massive underutilization of the technology itself. Even with the potentially paradigm-shifting aura attached to cryptocurrency, Lagos — and, by extension, Nigerians — seem content to focus only on BTC as a dollar substitute without diving deeper into the technological ramifications of broader Bitcoin adoption.
Data from Bitnodes , which tracks the global Bitcoin nodes distribution, shows that there are virtually no nodes in the country. Yes, Lagos leads the way in online BTC searches. But only a handful of people run actual Bitcoin nodes.
This reticence for a broad-based adoption isn't entirely down to apathy toward the technology itself, but is, instead, a representation of the lack of proper infrastructure on which to support a vibrant digital economy. In a city that lacks constant electricity supply , the fact that people aren't running Bitcoin nodes hardly comes as a surprise.
Concerning Bitcoin underutilization, Alagbe opined:
“There’s still a whole of lot education that needs to go into helping people understand the relationships between Bitcoin (crypto) and its underlying Blockchain technology. However, the Nigerian market is likely to focus on crypto to the exclusion of other applications of Blockchain inasmuch for as long as there’s profit to be made in the speculative side of cryptocurrency.”
Another startling indicator of Bitcoin underutilization in the city comes from the lack of retail acceptance of the cryptocurrency. While metropolitan areas in the United States, Europe and parts of Asia have increasingly seen more retail ...