The cryptocurrency market has been steadily rising in the last decade, with China considering lifting its ban on bitcoin to El Salvador legalising it.
Initially, people assumed that digital currency would be gaining customers only in western nations, supposedly because these are more open to change.
This bet was lost soon, as Asian and African markets embraced virtual currency, and today Nigeria, an African country, has recorded the highest usage of cryptocurrency.Â
Basics of Cryptocurrency Â
Despite a global slump, cryptocurrency is booming in Asian and African economies, even after a decade of its emergence.
Las Vegas may be the crypto casino, but its bars crowd on the streets of Nigeria and Hanoi. To figure out why these countries, particularly, we need to look at one fundamental characteristic of virtual money.
It works on the mechanism of blockchain, which in layman terms, is a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems.
This supposedly makes crypto transferable sans losing value, and it’s highly accessible with minimal resources (just a computer with an Internet connection, and you’re well equipped to be the next
crypto tycoon). Like any other commodity, when it’s ‘bullish’, you buy and if ‘bearish’, you sell or just keep them in a ‘cold storage’ or offline network.
These terms may sound familiar to those who use Bitcoin or Ether, the two most famous virtual currencies.Â
The Next Stage of Flat Currency Â
For ages, people have been obsessed with acquiring things of value that will retain expense irrespective of time, be it gold or even cacao beans.
Only these can be used as a means of exchange, i.e., currency. Earlier; we used the gold standard to back up our money, but concerns over the finite nature of the resource made us rethink it.
With Switzerland being the last country to get rid of the system in 1999, all significant countries embraced flat currency, i.e. currency not backed by any commodity but only government acceptance and which has no chances of counterfeiting.
The latter part may remind you of the Delhi sultanate ruler, Mohammed Bin Tughlaq, who introduced the copper coin during the scarcity of silver.
The change was revolutionary, though unsuccessful due to counterfeiting of these coins. The next stage after flat currency is a cryptocurrency, its main advantage over the former being that it is universal and boundless.Â
The Interest of Asia and Africa Â
There is often financial instability or risk in Asian and African regions, where digital currency is widespread. When Zimbabwean Dollar skyrocketed due to hyperinflation in 2015, many people turned to cryptocurrency, as local issues did not affect its value.
These countries also have more youth looking for new ideas and opportunities to secure their future; the digital currency investment is a new ray of hope.
Also, people often work in different countries today and send money to their families, so if about 20% of it disappears like Angel’s Share while transferring cash across borders, it isan astronomical loss.
The easy and no fuss movement of virtual coins through digital wallets anywhere on the planet makes it a viable choice. These being the core reasons, one cannot indeed be blind towards the herd mentality among people.
When they read stories of the value of Bitcoin multiplying by 1000 times, many ambitious people jump on the bandwagon.Â
Dangerous Waters or Calculated RiskÂ
Gradually the risks associated with it are also evening out with countries scurrying to make laws governing it.
El Salvador became the first country in the world to adopt Bitcoin as legal tender after the country’s Congress on 9th June 2021 approved President Nayib Bukeli’s proposal to embrace cryptocurrency, a move that delighted the crypto supporters.
Unlike developed countries of Europe and the US, people of Asia and Africa have a growing generation of adaptable young investors who think outside the traditional circle.
With the entry of the CBDC of (Central Bank of Digital Currency), cryptocurrency is a definite benefit.Â
So, it is not surprising that cryptocurrency is seen as an investment by both stable and volatile markets. In all fairness, crypto encompasses the ‘value’ of money, then uses the internet for transparency and decentralisation so that everyone has a seat on the finance table.Â
