I have watched with dismay as Nigerians and especially Nigerian youths once again are engaging in another quick get rich scheme called Cryptocurrency trading. Snake oil salesmen and women are now telling vulnerable Nigerians once again that they can make millions with cryptocurrency trade. That it is the best investment out there. Most Nigerians do not understand what cryptocurrency is, which makes it more likely for them to succumb to another quick money-making scheme. Few years ago, Nigerians were seduced into a Russian founded Ponzi scheme called Mavrodi Mundial Moneybox (MMM) and other similar Ponzi schemes which wrecked life of so many Nigerians.
A cryptocurrency is a digital currency that can be used to buy goods and services, but unlike regular currency, it uses online ledger with strong cryptography to secure online transactions. It uses digital files as money. Cryptocurrencies work by using a blockchain technology which is a highly decentralized technology spread across many computers that manages and record encrypted transactions. Currently, there are approximately 6,700 different cryptocurrencies that are publicly traded.
The problem with cryptocurrency is that it is highly unregulated and unstable. The value of cryptocurrency often fluctuates widely. Investors often drive the prices upward for quick gain. The price volatility could wipeout trader’s money without notice and without recourse to recover lost revenue. Often owners of the cryptocurrency companies and traders are unknown. Many investors see cryptocurrency as mere speculative investment instead of real investment. Granted that it can be an effective way to transmit money and money transmission could be done anonymously. The anonymity it offers have made it attractive to criminals and fraudsters. These outlaws have started using it as a preferred medium to steal and launder ill-gotten wealth in and out of Nigeria. Other countries around the world are experiencing similar problems. Nigerian government including the Central bank have already seen adverse effect of this strange and unregulated medium of transaction. It was not a surprise that major financial institutions including American Express, Visa, Mastercard who were in talk with Face book to launch their own Cryptocurrency bailed out when they took time to evaluate the future implication of such venture.
Nigerian Central Bank governor, Mr. Godwin Emefiele must be commended for taking decisive action to mitigate the current and future avalanche of problem associated with this strange and unregulated instrument that most Nigerians know nothing about by mandating commercial banks to close all accounts associated with cryptocurrency trading. Also, our youths should not be allowed to get the impression that there is a short cut to wealth acquisition. There is no short cut to success. Looking for short cuts has been a major hindrance to the development of Nigeria. Nigeria will only develop when all able-bodied Nigerian understand that progress and success requires an honest day’s work for an honest day pay.