It is common knowledge that Bitcoin is primarily used as a vehicle for speculation nowadays – mostly in the hands of those who are born with a silver spoon in their mouth. For the rest of the world, and that happens to be the majority of the world including Nigeria, it has become a way to escape the abject poverty and financial enslavement by bankers and the state.
A p2p marketplace Bitpapa helps pave that way.
Banking the unbanked
Despite being the world’s seventh-most populous country (and the most populous in Africa), Nigeria is one of the top three unbanked countries on the planet. It is estimated that around 36 percent of Nigerian adults (38.1 million of 106 million) don’t have a bank account and are thus officially considered financially excluded.
Previously, all these millions of the unbanked Nigerians had to use cash or stick to plain barter. Essentially, they were at the mercy of local monetary authorities. The latter didn’t miss the opportunity to steal the purchasing power from the poor by devaluing the national currency (Naira), making these people even more poor in the process.
Suffice it to say that in the decade 2010-2020, Naira lost most of its value against the US dollar. In 2010, it had been trading at 150₦ per dollar, while at the end of 2020 you already had to shell out no less than 450₦ (and even more on the streets of Lagos). That represents a cumulative inflation rate of 200%.
You don’t exactly need a PhD in economics to see how the American dollar, the one and only, came to be the de-facto national currency in Nigeria.
Then Bitcoin arrived and took over.
Diaspora remittances have long been one of the major sources of capital inflows into the country, up to a point where they started to exceed the revenues from oil exports – the mainstay of the Nigerian economy. And yet, the official figures have inexplicably declined recently – with cryptocurrency adoption surging in Nigeria and around.
After all, Bitcoin is not just about speculation and profiteering.
Quite ironically, the number of Nigerians reported financially excluded these days correlates well with the estimates of locals who have recently dipped their toes in the crypto waters. The recent report by a cryptocurrency exchange KuCoin shows that about 35% of adult Nigerians have used crypto in the first half of this year.
They might well be the same folks.
A new dawn
It is a widespread practice for governments habitually abusing their financial power through depreciating national currency to ban anything that threatens their monopoly on money printing. The Nigerian government proved that simple truth once again.
On February 5, 2021, the Central Bank of Nigeria issued a directive that made transactions in cryptocurrencies illegal, at the same time ordering local banks and financial institutions to close the accounts of individuals and organizations (for example, cryptocurrency exchanges) that were in one way or another involved in cryptocurrencies.
This is where Bitpapa, a peer-to-peer marketplace, comes into play.
Its main task is to facilitate the execution of cryptocurrency trades, but, unlike centralized exchanges, it doesn’t accept fiat deposits. With this service, the buyer directly pays the seller by sending money to his account, while the marketplace holds the seller’s bitcoins in escrow until the seller confirms the payment.
From the central bank point of view, there is no cryptocurrency trading taking place – only the transfer of money between the two individuals using one payment method or another (for example, card-to-card payments). Blocking these payments would effectively entail blocking all such payments and shutting down the payment system itself.
Even the Nigerian government is not likely to go that far.
The marketplace only holds crypto which is used to protect both parties to the trade. The buyer of the cryptocurrency can be sure that the seller won’t disappear with his money – in the worst case the coins locked in escrow will be released to a good buyer by the marketplace itself. The seller, on the other hand, is not expected to release his coins until he has actually received the payment.
And everyone is happy (other than the Nigerian central bank).
There’s more to come
Bitpapa brings to the English-speaking community of Nigerian traders a smooth trading experience via a user-friendly website, easy-to-use mobile app, and sophisticated Telegram bot. But Bitcoin is not the only cryptocurrency option there. You can also trade ETH, TON, XMR, as well as USDT stablecoin.
And in Nigeria you would like to buy these with Naira, right? Bitpapa now allows you to effortlessly trade crypto for Naira, no strings attached, no verification required.
The service equips Nigerians with an array of payment methods which include not only the common ones (like bank transfers or gift cards), but also unique to Nigeria and Africa in general (for example, Chipper Cash). Moreover, as Bitpapa expands its operations in this nation and receives feedback from users, more payment channels will be added.
But it is not only about trading, even though the marketplace helps build complex trading strategies capitalizing on both short-term volatility and long-term growth. Bitpapa is looking toward closer cooperation with the Nigerian crypto community by organizing online and offline meetups and events with the aim of fostering cryptocurrency adoption in Nigeria.
Make sure your voice is heard and your presence known.
Final notes
Bitcoin and other cryptos are often criticized for extreme price instability, and rightfully so. But there’s always a way back to making new tops and new highs at the end of the day. For fiat currencies, however, it is always a one-way street toward depreciation, with complete loss of purchasing power down the road. Then, as long as you stick to battle-tested cryptos and trusted trading platforms, you should be okay in the long run.
And with Bitpapa, you get the whole package.
