blockchain technology and cryptocurrency in Nigeria

Nigeria is the seventh most populated country in the world and the first in the continent. Concern about cryptocurrency in the Nigeria has been on the increase as the population of the country can be of significant effect to the crypto industry, if there is a positive respond on cryptocurrency in the country.

From statistics given by the Central bank of the country, its projected that the country has a domestic market product of approximately $500 billion. This has led to the world bank considering the country as an emerging market that need to be utilized to the full potential.

Cryptocurrency is legal in Nigeria, but Nigeria Security and Exchange Commission has warned the Nigerians on the dangers of investing in cryptocurrency claiming that its highly risky and sometimes could be fraudulent.

At this point we are will explain the meaning of blockchain technology and cryptocurrency, the merits and demerits

Meaning of blockchain technology?

A blockchain is a decentralized ledger of all transactions across a peer-to-peer network. It has no central authority that oversees and confirm transactions. In this technology, any participant can confirm transaction irrespective of the geographical location.

Meaning of cryptocurrency

a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority. Though there are a lot of advantages of cryptocurrency over paper money, but under this content we will concentrate on merits and demerits of blockchain technology.

Merits of blockchain technology

Some of the merits of blockchain technology includes;

Accuracy

Transactions on the blockchain network are approved by a network of thousands or millions of computers, which eliminate all human involvement in verification process. This reduce or eliminate errors due to human. Computers errors are minimal, and even though there exist computational errors, it will only occur in one copy of the blockchain. For an to affect the rest of the blockchain, over 51% of the computers must have made the same mistake and this is neat impossible.

Decentralization

Blockchain information’s is not been stored on a central location or device. Rather the information’s is copied and distributed across networks of computers.

If a new block got introduced into the blockchain, every computer on the network get updated to reflect the new change.

Distribution of information’s across networks makes it difficult for blockchain information to be tampered with, unlike if it was stored in a single database. Hacking is difficult due the nature of the system.

 

Cost Reductions

Blockchain eliminate transaction fees thereby reducing cost. This as a result that no central authority is required to verify a transaction for validity.

Efficient Transactions

Most transactions placed through a central authority takes some time to validate as a result of work schedule of financial institutions such as banks, etc. this problem is eliminated in blockchain transactions, as transactions goes 24hours a day, 7 days a week. With each transaction getting secured hours after it took place. This is considered useful for cross border trades that takes longer time to get validated.

Transparency

Blockchain transactions are transparent as they are made public where every member can see but can’t influence it

Security

Blockchain still remain of the most secured, decentralized peer to peer transaction network. In other words, its highly secured and nearly impossible to hack.

Demerits of blockchain technology

What ever that have advantage, also have disadvantage and these includes blockchain technology.

Cost of operations

Although blockchain do save users transaction fees, the technology may not totally be free as many may perceive it. Operating most computers of the network of computers is not surely free. Though this cost is at minimal compared with the traditional alternatives.

Electricity cost

It may amaze you to know that the power consumption of millions of computers on the bitcoin network is equivalent to Denmark Annual electricity consumption. This hug amount of energy consumption by these computers could be really expensive depending on the cost of energy per kilowatt hour.

Cost of procurement of mining device

Most cryptocurrency mining device are expensive, but this may not be an issue on the side of Pi Cryptocurrency as it could be mined by smart phones and laptops from the comfort of your room.

 

Maintenance cost

Maintenance is an integral part of every technology. Just we stated earlier, blockchain are run on network of millions of computers and these computers all need servicing once in a while.

 

Susceptibility

New cryptocurrencies are more susceptible to being hacked, though this may be difficult due to the computational power required to gain majority control of the blockchain. But from researches done so far, this hacking is nicely to increase as hackers now rent computational power instead of buying most of the equipment’s.

Considering all this benefits of blockchain and cryptocurrency, it will amazed you to know that the central bank of Nigeria has no plan of incorporating cryptocurrencies into the financial system, rather busy cautioning the public on the dangers of crypto investment.

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