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Bitcoin scams and how to avoid them, the Nigerian way

Bitcoin scams and how to avoid them, the Nigerian way

The Bitcoin boom and subsequent cryptocurrency obsession has, like any potentially lucrative venture, become prone to hacks and Bitcoin scams, seeing countless individuals and investing groups alike lose money. But over in Nigeria, vintage techniques are being used to protect today’s digital money.

“Everybody I know has been scammed in one way or another,” Bashir Aminu – a digital security expert and bitcoin enthusiast in Lagos – told Cryptocurencynews.com. That’s probably because Nigeria’s obsession with Bitcoin was born from an infamous scam, which not only conned millions of Nigerians out their money, but showed them the potential for Bitcoin to transform their fortunes.

The scam started in Russia, essentially a ponzi scheme it became known as the Mavrodi Mondial Moneybox scheme (MMM), promising people an attractive return of 30% within a month. As they became wise to the sting the Nigerian government started targeting accounts linked with the scheme which meant MMM operators had to adapt: they started using a decentralised currency. “It was MMM that made Nigerians understand how Bitcoin worked,” explained Lucky Uwakwe, co-founder of Blockchain Solutions Ltd.

Now, Nigera stands 23rd in the world for volume of trading. They currently trade around $4.7 million worth of bitcoin a week which marks a huge growth from $300,000 per week a year ago. And it’s all because of the The Mavrodi Mondial Moneybox (MMM) scam.

But, having been stung, potential investors weren’t about to pile their savings into ‘the future’ without assurances that ‘the future’ wouldn’t take their money and never be seen again. So – using Telegram – traders took matters into their own hands. Bashir Aminu added the human element, acting as the verification process for his peers who didn’t want to be hit by another ruse, checking identification and acting as a trusted broker.

Now there are thousands of self-run security networks on the encrypted messaging platform, and Nigeria is reaping the benefits of a vibrant Crypto community. “The growth has been crazy,” said David Ajala, who runs NairaEx. “It took us two years to get 10,000 customers. Within the last year, we’ve added 90,000.”