Nigeria lost its title as Africa’s largest economy about a month ago since falling into recession. However, Bitcoin use has not taken a due uptake there when compared on the same scale with other African Bitcoin markets in South Africa and Kenya going by previous details from fiatleak.com and LocalBitcoins.com. And this is for several reasons.
Though it has the market, the largest population size on the continent, the remittance prowess that ranks in the top five in the world and a worsening economic situation - a faltering currency and plunging oil revenues, one would have expected Nigeria to be the happening point for Bitcoin. However, that is not the case yet.
Low level of financial literacy
According to Adeolu Fadele, founder and lead researcher at Cryptography Development Initiative of Nigeria, there is a low level of awareness about Bitcoin and Blockchain in Nigeria because of low financial literacy.
“One of the reasons is the low level of financial literacy generally even among the educated populace,” he said in a chat with Cointelegraph. “Not many people understand the concept of money. I am talking about even the fiat currency. Money is one thing nobody asks question of how it works. This is because it just works almost naturally. If you get into the history of money, one reality that will strike you is that you never really understood money when you thought you did.”
He also noted that based on his research into the dynamics of money as related to cryptocurrencies in a setting like Nigeria, the current economic downturn in the country may be the factor more Nigerians need to embrace cryptocurrencies.
“Well, I can tell you that people don't touch it unless it breaks. No one would have a need for an alternative form of money unless the one in use breaks.”
He believes that the rate of adoption of cryptocurrencies will depend on the failure of resilience of the fiat both in Nigeria and globally. That is why adoption is faster in those countries that have suffered one financial crisis or the other like Brazil, Argentina, Greece and Cyprus.
“The current financial distress in Nigeria is helping cryptocurrencies indirectly,” notes Fadele. “The general public will never look for a solution unless they have a problem.”
Bitcoin to gain mainstream adoption in 10-20 years
However, despite the low level of use, Fadele who has worked with a financial regulator for years and written many exams on the subject of money, maintained that as a fan of the mainstream economy, he never expected virtual currencies to have gotten the attention it has presently in Nigeria.
“It beats my imagination,” he stated. “It is bigger than expected in 2016.”
He cites a Garners research that says programmable money like cryptocurrencies will gain mainstream adoption in about 10 to 20 years to come. He added that with the look of things, adoption might happen faster than that particularly with Blockchain.