Demystifying The Mindset Of The Avid Nigerian Crypto Enthusiast

Wait, What?!

Here’s what went down in a memorable September 2019 edition of “Wait, What?!” — A Nigerian man woke up one day to find that NGN 28.8 Mn (about USD 80 K) worth of Bitcoin had been transferred into his cryptocurrency wallet in error. 

Yes, from out of the blue, nearly NGN 30 Mn worth of Bitcoin landed his cryptocurrency wallet by mistake and this young Nigerian spent the next 72 hours tracking down who had made the erroneous transaction. He spread the word via WhatsApp broadcasts and Tweets. Once he got hold of the person, he returned all the funds to the last cent!

Incredulous? Wait till you meet Keith Mali Chung, the 28-year-old native of Jos, Plateau State, in North Central Nigeria, who was at the centre of this amazing display of honesty. It was he who returned the USD 80 K worth of Bitcoin that had been sent to him in error.

Keith Mali Chung

He tells WeeTracker that he had two things in mind from the moment he realised someone had made him a lot richer by mistake, and none of those options was the relatively “more convenient” option of disappearing with the funds.

“The message is simple; to lead by example by returning the funds to the rightful owner, to be the light and tell the world that we all are not into cybercrime or corrupt as generally stereotyped,” says Keith.

Had the rightful owner not stepped forward, his second option was to donate to charity. Keith had pledged to donate the accidentally-received funds to Binance, which organizes a series of philanthropic projects via its charity arm.

Keith, who is currently based in Nigeria’s capital city, Abuja, is an avid crypto crusader and educator. A day in the life of the digital currency and decentralised technologies campaigner typically involves travelling around the country and beyond, giving workshops and using other engagements to educate people on the potentials of blockchain technology and cryptocurrency.

Presently, Keith is the President and Founding Partner of LoopBlock Network; a decentralized AI Blockchain Company.

The crypto crusader says his company has built the most-scalable decentralised blockchain technology which processes over 500,000 transactions per second and has an unlimited block size which places it above the EOS blockchain, which is one of the best in the space that processes just 20,000 transactions per second with its 52 GB block size. 

According to him, LoopBlock Network launched operations in 2018 and the aim is to provide the most decentralized and effective technology that will foster the growth of digital assets and decentralized finance (Defi) in Africa.

In our quest to understand the psychology and mindset of the Nigerian crypto trader (as Nigeria is coincidentally the hottest crypto market in Africa), WeeTracker picked the brains of Keith who was willing to share some details of his journey with cryptocurrency and blockchain technology so far.

How It All Began

In 2015, Keith lost the job that was pretty much keeping him afloat and he found himself in a sink or swim situation. He was stuck in a tight spot and he describes those times as a “devastating and frustrating period” in his life.

Determined to get back on his feet, he started looking for jobs on the internet with some particular interest in the fintech industry. After several months of scouring the web, he became drawn to blockchain technology and all the perks that come with it.

“That was how I came across the blockchain technology which came into existence through the invention of Bitcoin,” he tells WeeTracker

“The history of its performance from 2010 to 2015 intrigued me and made me develop an interest in it and what it has to offer for the future.”

By 2016, Keith had made up his mind that this new path was the way to go. And in keeping with that, he committed to it financially.

However, his first investment in crypto turned out a disaster as he had been unsuspectingly lured into a Ponzi scheme that saw him lose NGN 25 K (around USD 70.00).

“My first investment was in a coin called The Billion-Dollar Coin (TBC) with an initial investment of 25,000 naira ($70),” recalls Keith.

“It was a failed investment and the reason being that TBC is (was) a Ponzi scheme with fabricated promises using cryptocurrency to lure investors to invest.” 

Bitten but not broken, he ventured even further, proving that “once-bitten, twice shy” had nothing on him.

After attaining a deeper understanding of what cryptocurrency is, Keith, having recovered from the TBC burn, made a U-Turn and started investing in Bitcoin directly.

And it happened that the digital asset very well the following year, giving  Keith good returns on his initial investment. That set the tone for what is morphing into a career in crypto for the young Nigerian.

Explaining The Early Motivation

“Crypto is not for the faint of heart.”

So goes a popular saying in these parts; a saying that takes its roots from the fact that digital currencies like Bitcoin and Ethereum are highly volatile, moving from sharp crests to depressing troughs in the blink of an eye.

This year, for instance, Bitcoin started with a ‘green’ candle month. January saw Bitcoin climb from USD 6,836.00 as of (01/01/2020) to USD 9341.00 (31/01/2020) after close to six losing months for the second half of 2019.

In the last few weeks, there have been dips in the price of Bitcoin to as low as USD 8 K, though the current price is somewhere around USD 9 K. 

After 11 years and as we enter a new decade, many commentators believe that 2020 will be the year that the real value of cryptocurrencies is recognised.

Marcus Swanepoel, CEO of Luno, a leading global cryptocurrency company, recently commented thus:

“Digital assets are still subject to high levels of volatility but we are seeing greater adoption, workable regulation and better access for millions of people.  In 2020, the continued development of stable coins and the interest of companies like Facebook will accelerate the development of cryptocurrencies.“

So why would anybody decide to invest their hard-earned money in an asset that is so volatile, it could move from a hundred to zero and back to a hundred in a matter of minutes? Why are Nigerians gambling on crypto even though their investments are not protected and they could easily lose huge cash? 

Of course, crypto holds the promise of stupendous gains, but so does it hold a great risk of gargantuan losses. So, what could be leading crypto traders on? Could it be that the motivation mostly comes from the fear-of-missing-out (FOMO)? Keith thinks not, citing his motivation for venturing into crypto in the first place.

“To be honest, I was fully convinced that the present monetary system is faulty and Bitcoin is going to change that, I saw a rare opportunity to be part of a silent but yet the most powerful revolution the world is going to witness in the financial industry. So, it wasn’t out of FOMO but of the knowledge and understanding of the privilege I saw.”

On what drives his current enthusiasm for cryptocurrency and decentralized technologies, Keith ascribes it to “freedom and liberation of the world from the present corrupt system. He says crypto gifts “the separation of money from the state, hence it is bringing power back to the people by giving them back the control of their own finances.”

Current Recommendations

Keith sums up why he invests in crypto and why he would advise anyone to invest in crypto at this time in these words:

“I believe in the shift of wealth, and I understand that crypto is the tool that will determine the next greatest transfer of wealth to the new generation, the metrics and the principles it is built on, is making the world to gaze. 

“Bitcoin alone has multiplied over 3.5 million times in the last 10 years making it the best performing class of asset as against the traditional assets including stocks, bonds, gold or whatever. 

“I see Bitcoin as schmuck insurance, it is a non-correlated and a non-asymmetrical class of asset as against today’s faulty monetary system which is vulnerable to ill financial policies, quantitative easing, and natural disasters.

“If Bitcoin is able to multiply by over 3.5 million times, it means it [Bitcoin] is easier to multiply by 100 times or more in the future which will put it above a million dollars per coin.”

The Nigerian crypto crusader also says that, at the moment, there is a lot of reward in investing in Bitcoin, Ethereum, eos, Bxy, WRx, and NEO XRP but he quickly chirps in with some humour that this is not financial advice.

Addressing The Claim That Cryptocurrency Is Untraceable

One of the biggest claims, or rather, myths, surrounding the use and adoption of cryptocurrency is centered on talks of absolute anonymity and non-traceability. 

Simply put, the word on the street is that crypto is untraceable. And this may be why the previous year was awash with such viral headlines as a gang of kidnappers in Nigeria demanding ransom in Bitcoin and the juicy story of hackers taking over the official website of a province in South Africa and demanding that payment be made to them in Bitcoin before the expiration of an ultimatum, threatening that they would leak some very sensitive data if their conditions are not met before the deadline.

So, is it a myth or a hoax? Or is Bitcoin really untraceable? Well, according to Keith, Bitcoin is NOT absolutely untraceable.

“Cryptocurrency is traceable,” maintains Keith. “All cryptocurrency transactions are stored in a distributed public ledger called the Blockchain. This means every transaction from the early days of Bitcoin is there. There are many forms of forensic analysis in the realm of crypto used to identify users and their activities but it is so complicated than the conventional financial system.”

Why Are Cryptocurrencies So Volatile?

The volatility of crypto has always been a drawback that has prevented even some of the world’s most successful investors, including Warren Buffet, from taking it seriously, though the American Billionaire recently had a special dinner with one of the torchbearers of the cryptocurrency world.

That torchbearer is Justin Sun of Tron Network who was able to formally introduce Buffet to cryptocurrencies. Sun also had the honor of offering Buffet some Bitcoin and TRX which the billionaire was reportedly excited about it.

Explaining the volatility of crypto, Keith had this to say:

“Bitcoin, for example, has a limited supply of 21 million coins with a total circulating supply of 18 million coins. It means that when there is more demand for Bitcoin than its finite supply, the value will keep appreciating. This law of demand and supply  is also applicable to all other cryptos,”

He adds,

“Crypto is a speculative class of asset, also known as a bubble. It’s an asset that experiences a dramatic spike in value within a particular industry, commodity, or asset class. A bubble is usually caused by overzealous expectations of future performance, growth, or appreciation. 

“Despite its many promises and benefits to the modern fiat payment systems, there are those that remain unconvinced and people buy into those uncertain promises of having another spike in the future.”

What The Future Holds For Crypto

By Keith’s reckoning, fiat systems are ripe for disruption as the current monetary system is flawed. And crypto seems like the perfect solution.

He says, “The best form of currency is known to be that which is directly affected by the free market. This is one thing that is missing in today’s financial system, the manipulation and irregularities playing in the conventional systems are some of the reasons fiat will keep losing its standards to the decentralized digital economy. 

“It is for the same reason that what $1 can be able to buy for you in the last decade, the same $1 can’t be able to buy for you today. One of the greatest principles in economics is the Law of Demand and Supply but that law only exists in the supply of fiat in the market which reduces the cost of money but the law of demand doesn’t affect the positive value of fiat and this says how so much of a fault today’s monetary system is.”

Keith also believes crypto can be more than just an asset, proving itself a legal tender. 

As he puts it, “Crypto isn’t just an asset but also a legal tender that is directly influenced by one of the greatest principles of economics which is the Law of Demand and Supply and already being used as it was invented to be for the exchange of goods and services which it is perfectly serving well. 

“Example of the biggest companies that already accept cryptocurrency as a mode of payments in the world are Wikipedia, Microsoft, Expedia, AT&T, Norwegian Airs, Virgin Galatic, Miami Dolphins and many more.”

Keith also believes that the narratives are fast-changing and the volatile nature of crypto makes it more fun and special to the newer generations of humans who are technologically inclined.

“The fiat is faulty and doesn’t serve us the best universal Financial Standards, the closest we have is the Special Drawing Right (SDR), which was created by the International Monetary Fund (IMF) in 1969 and is based on a basket of five of the world’s most stable currencies but it is not serving us well. 

“Fiat stable coins are helpful but not the best for us and I see value being measured my Satoshis and the amount of Bitcoin, not dollars or naira, in the nearest future.”

What Lies In Store For Nigeria

Barely a week ago, the first Bitcoin ATM was spotted in Nigeria as a culmination of the efforts of one Daniel Adekunle who is the founder/CEO of a local blockchain startup known as Blockstale.

For a country that lacks any kind of regulation in this segment, it’s quite a bold move and it speaks to how much Nigerians have embraced crypto since it first popped up on the radar. And according to Keith, the uptick in crypto adoption in Nigeria is bound to continue.

“It is no doubt we shall continue to see a surge in participation and acceptance of this class of assets irrespective of what the regulatory requirements and directives say. The local economy is crashing and Bitcoin, as created, best-serves to replace the falling corrupt system, as well as side-step tyranny and protect against the collapsing economy.

“And directly, one or two of this I mentioned is our predicament and people want to be liberated especially in the developing countries which we in Africa fall in.”

Although optimistic about the prospects of digital currencies in these parts, Keith is wary of legislative hurdles which he fears may eventually create obstacles in Nigeria, especially as a number of African countries are known to have either stifled the use of crypto or banned it outrightly.

He says,

“In as much as we believe and know that Bitcoin for example can’t be fully regulated because of its decentralized nature, the fact that it is a threat to the present financial systems and power-control means that we shall continue to see regulatory disapproval which we totally discourage.

“Stiff regulatory utterances can only harm us negatively as a country and a continent and we wouldn’t want to be left behind especially now that countries like China, Japan, South Korea and many others have given the green light to digital assets and creating their own sovereign digital assets.”

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