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20 sats \ 3 replies \ @KenyaCoin OP 12 Oct 2022 \ parent \ on: A Year After Nigeria Launched It to Counter Bitcoin, the eNaira Is a Failure bitcoin
That's a fair critique. Bitcoin's use case as a store of value really only applies over the long term (e.g,. 5+ years). When price discovery happens and the bitcoin exchange rate spikes, there is an elevated risk of a similar (or greater) sized selloff. Even intraday volatility sometimes can make bitcoin painful to hold.
But the naira very likely is, for the foreseeable future, going to continue losing value over time, due to various factors including the current political, economic and social situations in the country.
I am curious. Would the typical Nigerian bitcoin buyer be using a dollar based stablecoin to buy? I really hope that as the US federal reserve action destroys developing country's fiat, bitcoin can actually appreciate in the local currency even if the USD value declines or remains stagnant.
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Would the typical Nigerian bitcoin buyer be using a dollar based stablecoin to buy?
Buying bitcoin in Nigeria is occurring mostly via P2P trade, and from other methods that don't involve the banking network. There is an elevated amount of shitcoin and NFT platforms pushed in Sub-Saharan Africa (e.g., from Binance, Celo, and soon Mara). So some of those have stablecoins which are used to avoid exchange rate volatility.
I don't know the breakdown as to the ratio of bitcoiners using fiat to buy bitcoin versus using a stablecoin. There's relatively few people who run a node, so their bitcoin are oftentimes kept on exchanges like Paxful, Binance, and even regional exchanges like Bitmama. Some do self-custody their bitcoin and shitcoins though. There was (maybe still is) the situation where police were seeing bitcoin / crypto wallets and confiscating those funds, which was one of the contributing factors for the ENDSARS protests a couple years ago which resulted in a violent crackdown.
One thing that is different from the West is the number of people who do not have a bank account. And when sending money person-to-person, the transaction size may be small (e.g., $5, or $2 and less even). So that's why Lightning network holds so much promise.
I really hope that as the US federal reserve action destroys developing country's fiat,
That outcome is becoming more and more likely. I think the only question is how and when the government responds. Zimbabwe is on like their fourth currency now in the past a decade and a half, including a period where they used USD.
But such a crisis destabilizes the nation, and there already are violent conflicts and division. So it's not that I want to see anyone's fiat holdings be destroyed, I just know that the situation is such that there is likely nothing that will stop the local currency from continuing to lose value, and whatever confidence in the currency people retain today will be completely lost over time. I'ld like to think people will adopt bitcoin, but I suspect there will be a pivot to dollars first, or maybe China, believe it or not, ends up seeing their CBDC gain traction in parts of Africa too.
It's really not possible to have even a clue what the future holds.
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Thank you for that fantastic response. I learned a lot
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