Different types of cryptocurrency
Nigeria is the youngest in a long list of countries to take restrictive measures against cryptocurrencies. Here are 6 things you should know about this new type of money.
Last Friday, the central bank of Nigeria banned cryptocurrency trading [Dogecoin, Bitcoin, Ethereum] in the English-speaking African country. In the past, other countries such as China, Iran, India, Bangladesh, Morocco, Thailand, Uganda, and Zambia have taken various restrictive measures against cryptocurrencies.
What is cryptocurrency and why are some countries against it? The answer in 6 questions.
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1. What will be the next step after the Central Bank of Nigeria bans cryptocurrency transactions?
The Central Bank of Nigeria (CBN) explained why it banned cryptocurrency-related transactions in the country, claiming that digital currency is used for money laundering and terrorism.
The move sparked outrage among most young people and raised questions about other virtual payment and savings platforms like Piggyvest.
In a statement signed by Osita Nwanisobi, acting director of corporate communications, the CBN stated that « the use of cryptocurrency in Nigeria is a direct violation of the law. »
But if this central bank recall has sparked mass hysteria, let’s see what cryptocurrency really is and what the future of these digital currencies could be.
2. What is cryptocurrency and why are some countries against it?
Bitcoin was the first cryptocurrency, and experts say that Satoshi Nakamoto, who remains anonymous and unknown, invented it and introduced it to the public in 2019.
Since then there have been thousands of cryptocurrencies like Litecoin, Ethereum, and even Dogecoin.
Different types of cryptocurrency
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency. A currency that can neither be felt nor seen.
It is created through coding, and cryptocurrency transactions are stored in a type of database called a blockchain.
Cryptography is used to encrypt and hide codes to protect money.
What can the cryptocurrency system be used for?
For many things. You can use it to buy products, services and even trade in other physical currencies.
Celebrities and billionaires like Elon Musk, Lionel Messi and Mike Tyson have publicly shown their support for this virtual money.
Why are some countries not trusted?
One thing that sets cryptocurrency apart from the regular currency that you know is that there is no central bank or single administration that regulates it. And here lies the big problem or attraction of virtual currency.
While some countries like America have positively rated the use of cryptocurrency like Bitcoin for transactions, others are still in the hot seat or rightly banned it!
For example, the Central Bank of Nigeria has banned banks from holding, trading or using cryptocurrency for transactions since 2017.
Her last call back caused an uproar and generated many reactions.
But be careful, Nigeria is not the only country that has a problem with the cryptocurrency.
China, Taiwan, Iran, even Canada and other countries have restricted the use of cryptocurrency for transactions.
In fact, the cryptocurrency is completely banned in China! Banks are not allowed to enter into transactions or transactions with them.
Some experts believe that cryptocurrency transactions are largely unregulated, anonymous, and incomprehensible, and therefore have become a kind of aid to things like money laundering, terrorism, criminal activity, buying small arms, weapons, and even tax evasion.
Bitcoin fever is spreading in Uganda and making dreams come true
What does the future of cryptocurrency look like?
Nobody has a clear answer yet.
However, research conducted and published by Deutsche Bank shows that over time, inflation may become mainstream and a big problem for money, and that in which case the demand for alternative currencies is likely to be high by 2030.
But if everyone will finally accept virtual currency as a cryptocurrency in 10 years, this will remain a big question that experts and governments will have to answer in the coming years.