Nigeria has come a long way from being a Cryptocurrency scam flooded country to the trading of about $4.7 million in Bitcoin a week. As it has been the trend there, Bitcoin’s journey in Nigeria began with a scam. Mavrodi Mondial Moneybox (MMM), a 30-year-long global Ponzi scheme that began in Russia, roped in millions of Nigerians. From late 2015 to the end of 2016, many Nigerians became a victim of this fraud. The scheme promised them with 30% returns in as little as 30 days. MMM’s operators started requiring victims to use Bitcoins when the government began to crack down their bank accounts. By Christmas 2016, it had robbed an estimated 3 million people in Nigeria. It was a huge number in a country where per capita income is less than $3,000—of $50 million.
But one thing the scam had successfully managed to do was an introduction of Bitcoin in Nigeria. It convinced many of them that Bitcoin was the future. Lucky Uwakwe, co-founder of Blockchain Solutions Ltd. said: “It was MMM that made Nigerians understand how Bitcoin worked.” Blockchain Solutions Ltd. is a leading cryptocurrency consulting firm in Lagos. Today, Nigerians are trading about $4.7 million in Bitcoin a week, up from about $300,000 per week a year ago. That’s Number 23 globally. That is far below than USD or Japan’s Yen, but comparable to Chinese Yuan or Indian Rupees.
The scams still have not lost pace. Fake traders are still flooding Nigeria’s exchanges, messaging apps and even the streets of Lagos. These scam traders promise fast money and disappear once they get it. Adeolu Fadele, founder of the Cryptographic Development Initiative of Nigeria says, “A lot of people have had their fingers burned.” Cryptographic Development Initiative of Nigeria is a group that aims to educate regulators and the public about digital currency.
So the traders in Nigeria have now begun their own informal trading circles. These groups have an old-school approach to verifying transactions. Many traders make an informal group on social networking site like Telegram consisting only of known people. The admin of the group first reviews any new person’s identification before adding him/her to the group. The admin compares passports and other documents with the real person and takes other suitable measures. Many such networks can be found in Nigeria with more than 800 members in some groups. An occasional scammer still joins in sometimes. But more often than not, within few days he/she is taken care of.
In conclusion, it has been a long journey for Nigeria from being a scam filled country to Ranked 23 globally. And it still is going to be a hard path in future. But with proper knowledge and awareness, Nigeria is coming out of the mess it was at once.