What Nigerians Must Consider Before Investing in Bitcoin—Olaoye
**Calls it “Risky Business”
By Dipo Olowookere
Nigerians have been warned to be careful of investing their hard-earned money in cryptocurrencies because it is an “extremely risky business.”
Chief executive of Halogen Group, Mr Wale Olaoye, in a statement issued on Tuesday in Lagos, expressed concerns over the alarming rate at which Nigerians are investing in the insecure virtual currency.
Mr Olaoye said he supports the call by the Nigerian Senate for caution in investing in cryptocurrency business, advising Nigerians on what to consider before putting their money in the investment.
“I think it is high time we educated Nigerians on the attendant risks in investing their life savings on a platform that is as volatile as crypto currency.
“Data available to us indicate that there are over three million Nigerian investors in crypto currency presently and the figure is expected to double by the end of this year.
“In fact, Nigeria is where the Bitcoin trading grew the most in Africa last year with the value of transactions currently hovering at N2 billion weekly,” he said.
Mr Olaoye warned that a digital crypto currency balance can be wiped out by a computer crash if a backup copy of the holdings is non-existent, noting that the two biggest risks that Nigerians should consider before investing are security and fraud.
He explained, “While there are multiple risks cryptocurrency investors are exposed to, I am most concerned about the security and fraud risks due to their severity.
“Crypto currencies like Bitcoin and the many others springing up are entirely digital and, as with any virtual system, are susceptible to hackers, malware and operational glitches.
“If a criminal gains access to a Bitcoin owner’s computer hard drive and steals his private encryption key, he could transfer the stolen Bitcoins to another account.
“Hackers can also target Bitcoin exchanges, gaining access to thousands of accounts and digital wallets where bitcoins are stored.
“In Bitcoin’s short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value.
“The worst part is that all Bitcoin transactions are permanent and irreversible and as there is no third party or a payment processor – as in the case of a debit or credit card – there is no source of protection or appeal if there is a problem.
“Many Nigerians have already fallen prey to fraudsters and scammers who sell fake Bitcoins. There are also several fake Bitcoin wallets on both Playstore and IoS store, leading many unsuspecting investors to losing their hard earned money.”
The Halogen boss called on the CBN, NDIC and the NSE to do a lot more to sensitize Nigerians on the inherent dangers of storing so much funds in Bitcoin, echoing the Senate’s concern that the Nigerian economy risks losing the much needed forex to foreign syndicates who collude with fraudulent Nigerians to swindle innocent investors out of their funds.
It will be recalled that the Governor of the CBN, Mr Godwin Emefiele in a recent interview with Bloomberg described investors in cryptocurrencies as gamblers, adding that the apex bank would not render support to Nigerians investing in cryptocurrency.
Mr Emefiele’s recent warning is in line with a circular issued by the CBN last year, warning banks and other Financial Institutions (OFLs) not to use, hold, or trade digital currencies.