CRYPTO BAN, RECESSION AND COINECONOMETRICS OF NIGERIA

Despite being the largest economy in Africa, Nigeria has been battling recession for years, the latest is from 2016 when it hit high to a point of going down the drainage and pool of inflation. 

Some reports have it that, the Nigerian economy is expected to grow by 1.8% in 2021, though there is high uncertainty about the outlook. The recovery would be driven by rising in oil exports and domestic demand. ... GDP per capita is projected to continue declining because the economy is forecast to grow more slowly than the population. GDP in Nigeria averaged 134.82 USD Billion from 1960 until 2020, reaching an all-time high of 546.70 USD Billion in 2014 and a record low of 4.20 USD Billion in 1960.

THE DOWN OF THE CRYPTO-ECONOMY

The price of Bitcoin hit an all-time high of $19,000.00 on December 17, 2017, sending the world into a frenzy about Bitcoin and cryptocurrency in general. Interest groups, media circles, and populations of people that appeared so far away from the discussion were now participating, driving the world into a state of frenzy concerning the cryptocurrency phenomenon. As many will discover, cryptocurrency is beyond a phenomenon. It is an innovative model of conducting business that is here to stay. This staying power will be driven by reputable sovereign states, such as Bermuda, developing the legal framework for a working model to domicile initial coin offerings (ICOs) and by the prospect of the approximately 2 billion adults without traditional bank accounts discovering the virtues of cryptocurrency to perform everyday transactions through their 

mobile phone. 

Globally, approximately 1.1 billion unbanked have mobile phones which represent about two-thirds of the unbanked population. Cryptocurrencies are digital money created by software programing using encryption technology. The digital coin is generated within a domain that 1 connects to a network of peer-to-peer computers. These digital domains implement an immutable, distributed database called the blockchain which acts as the accounting system or official book of records for all transactions. The network utilizes a form of consensus model to verify transactions. 

What makes this model unique is the decentralization of the accounting 

system. The model relies on cryptography (and unique digital signatures) for security based on public and private keys and complex mathematical algorithms. It runs on a decentralized peer-to-peer network of computers and “miners” that operate on open-source software and do “work” to validate and 

irrevocably log transactions on a permanent public distributed ledger visible to the entire network. This solves the lack of trust between participants who may be strangers to each other on a public ledger through the transaction validation work. The model enables the transfer of ownership without the need 

for a trusted, central intermediary, as exists in current financial systems. The incredible software engineers and mathematics, encryption, and engineering professionals who contributed to making such a platform should be applauded 

for laying the foundation for the innovation to come. It should be noted that although Bitcoin is the first cryptocurrency to have 

achieved critical success, it was not the first cryptocurrency. The first digital cash platform to gain traction was DigiCash, founded by David Chaum, which relied on a system of “Blind Signatures” designed to ensure the privacy of users conducting online transactions. Chaum closed DigiCash in the late 

1990s because he was unable to get enough merchants to accept DigiCash in order for consumers to use it. 

Perhaps, security conscience is what makes many countries reject Crypto Currency and brought many legislations and moves to ban the trade of the digital money in their counties. Nigeria is one among the many Nations that detested the use of cryptocurrency.

On February 5th, the CBN released a ruling that orders all financial institutions to stop facilitating crypto transactions and desist from transacting with entities engaging in crypto. ... The CBN warned in the letter that breaches of the directive will attract severe regulatory sanctions.

Development Of Bitcoin 

These contributions and events laid the foundation for Bitcoin for Satoshi Nakamoto to revisit and inspired him to create a decentralized, immutable 

payment technology, free of double spending and providing privacy and anonymity to the users thereof. Users provide an encrypted address protected by public and private keys to maintain personal holdings, using the sophisticated network to transact and mint new coins through a software protocol. 

Bitcoin Versus Fiat With what can be implied as a ceremonious, symbolic, and successful launch of Bitcoin by one of its most prominent and mysterious pioneers, the infamous but never discovered, Satoshi Nakamoto, cryptocurrency achieved 

what would be the equivalent of landing a man on the moon in the cyber-world, as the statement revealed and imbedded into the Genesys block of the blockchain “The Times 03/Jab/2009 Chancellor on the brink of second bailout for banks.” The timing of the Bitcoin launch appears strategic and poses a direct jab at the modern-day banking systems as it comes on the heels of the near-collapse and failure of large financial institutions such as Lehman Brothers and Bear Stearns. As pointed statements such as the Genesis block comment highlight, there is a competing relationship between centralized payment systems owned by the banks and decentralized payments owned by no one but managed by a peer-to-peer network of computers. The natural comparison of cryptocurrencies to fiat currencies 

always occurs. 

These comparisons do not have to be contentious, with renowned banking executives denouncing cryptocurrencies as “fraud,” only to later ignore earlier statements as they implement initiatives to include technologies powering cryptocurrencies for the strategic development of their corporate strategy.

WHY THE CRYPTO BAN?

Meanwhile, Nigeria as a lingering economy is banning trading Crypto Currency in Nigerian Banks, citing as purpose in depending on the ever plunging Naira, and at the same time converting terrorism that has been bedeviling the country since 2010, a lot of people see the government action to ban the Crypto trade as an unwise decision, people opined that banning Crypto at this critical moment will not be good for the ailing Nigerian economy. The world is diving into another wave of economic downturn, is now going harshly and pushing more countries into critical days, recession looming and inflation surging up. Countries around the world are having second thoughts about the cryptocurrency trade thereby devising ways to regulate the trading to help their economy. 

As the cryptocurrency industry progresses towards a mainstream adoption stage, Dubai, one of the seven emirates in the United Arab Emirates (UAE), also continues to solidify its position as one of the top crypto-friendly jurisdictions in the world.

Turkey, Germany, and some other developed countries are having a transition to push their economy into modernism by allowing Crypto trading in their economy. Many Central Banks are making policies that will help them includes Crypto into the economy. Meanwhile, some developed economies are transitioning toward improving their trade indices by allowing Crypto to be part of the exchange of values, Nigeria is blocking that chance of having an improved economy by diversity, diversity in the sense we have to look into economics beyond the orthodox economy inherited for years. 

SHOULD NIGERIA LEARN?

The new normal has seen African youth and young adults shift more to working remotely as job opportunities in the continent are very few, especially for the former who make up the biggest demographic. "Number goes up" technology has made them cognizant of the opportunity of getting the most out of their time and effort by being paid in the best store of value on Earth, bitcoin.

... to be continued