How Bitcoin Could Fight Ponzi Schemes and Save Nigeria’s Economy

As Ponzi schemes make inroads into the Nigerian investment ecosystem, the next generation of leaders are indirectly learning to rely on luck and chance rather than genuine mental empowerment in the pursuit of their life goals.

It has become a pattern for investment schemes whether genuine or not to aim at making inroads into the Nigerian investment ecosystem. This move appears to be paying off as most of these schemes have received their biggest patronage from Nigeria.

Hetty Orkuma, a Nigerian businesswoman and entrepreneur says:

“Any business investment or otherwise not thinking of breaking into Nigeria has not done its investigations. Nigeria's biggest resource is its population. Next is an unwavering belief in the benevolence of the Supernatural on them if called upon. Recently recession has added to the strength of this belief. Another factor is the huge population of the half-educated who supply liberal advice for the non-educated.”

The year 2016 saw a surge of investment schemes and HYIPS in different forms fueled by a common denominator - cryptocurrency. Considering the low level of cryptocurrency knowledge, especially within the African continent, the rate at which the Nigerian population embraced the various money making systems reveals that they are yet to understand that Bitcoin or cryptocurrency is not an MLM, Ponzi or a pyramid scheme.

Bitcoin can fight Ponzi schemes

Adeolu Fadele, President of the Cryptography Development Initiative of Nigeria also known as CDIN, clarifies the misconceptions that exist within the Nigerian crypto industry by telling Cointelegraph that all network marketing or crowdfunding schemes need a medium for transactions and a form of currency.

Fadele explains that normally these schemes employ the services of any available transaction platform that suits their target audience.

He says:

“The official banking system and fiat currencies like the Naira have always been employed to date. Any viable currency can be used for any purpose or abused including Bitcoin, Naira, Dollars, and so on. The abuse of the currencies does make them the cause of the crime and this is where regulatory control comes in.”

Fadele notes that the regulation of Bitcoin is already automatically embedded within its system. He says that cryptographic control is already adequate regulation for Bitcoin and other cryptocurrencies.

To this effect, Fadele says that Bitcoin can help fight Ponzi schemes by providing the issuer the opportunity to insist on smart contracts guaranteeing the safety of their investment. However, he notes that Bitcoin cannot stop people from subscribing to Ponzi schemes only awareness can help to achieve that.

Banks have become inconsistent

Orkuma identifies the existing socio-economic problems currently faced by the country as one of the major factors behind the bad business decisions by its citizens. She says that the way the country is running in this period of recession does not help matters.

The inconsistent nature of the banking system has led to a loss of confidence from customers, indirectly encouraging them to take their destinies into their own hands no matter how risky it may appear.

Orkuma explains:

“People now say to themselves that if a government approved and regulated a body like a bank that doesn’t give you interest worth mentioning acts this way, what then is the great risk in diving into a Ponzi scheme which if it doesn’t fail can fetch you loads of interest?”

However, Orkuma points out that the failure of previous Ponzi schemes has not in any way dissuaded people from joining the next one. The prevailing psychology is usually for them to join up quickly with the next one hoping to be the tip of the pyramid and cash out before a crash.

The fading future

Orkuma identifies the danger posed by this existing pattern as she notes that this will take away from Nigeria's growth as a nation. She notes that the next generation of national leaders are being raised to believe in luck and chance. However, she still believes that it is not too late to arrest this trend if the government is really willing to do so.

“Nigerians are naturally hard-working when they find what to do. Providing jobs and creating avenues for soft loans to young entrepreneurs will get the people busy and earning a living reducing the zeal of risk taking,” she concludes.


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