The Rise of Blockchain in Nigeria is an incredible feat for a country as young as Nigeria, which has a comparatively low population size. This technology has helped Nigerians do business in a new way, and a company has recently raised $15 million in Series A funding. To learn more, read our detailed report, “The Rise of Blockchain in Nigeria: How it’s Transforming Local Trade.”
Blockchain is a digital ledger in which all transactions are recorded chronologically and publicly. Satoshi Nakamato first conceived of a distributed blockchain in 2008, which would use a peer-to-peer network to store a secure history of data exchanges. Rather than having a central authority, blockchain would be self-maintained and managed. This distributed ledger has since become the backbone of digital currencies.
Although cryptocurrencies are gaining popularity globally, the country’s central bank recently frozen the accounts of some cryptocurrency users. This was allegedly done because users were illegally obtaining funds through foreign exchange dealers. As a result, many companies are hesitant to discuss cryptocurrency in the country. Many people, especially aspiring entrepreneurs, feel that it could cause harm to their business. The government, however, is not afraid of cryptocurrency and may be embracing the technology in the future.
The rise of crypto assets has been rapid, and the sector is now intertwined with the regulated financial system. Policymakers struggle to understand how to best regulate this unregulated sector and ensure financial stability. However, the unpredictability of the market can result in a tangled web of regulatory actions that may exacerbate instability. It is estimated that the market capitalization of cryptos has reached $2.5 trillion, which may reflect the economic value of the underlying technological innovations. In an environment of stretched valuations, however, the growth may be a froth and a risky situation.