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As It Embraces Bitcoin, Nigeria Offers Lessons To The Developing World




As Bitcoin becomes more widely accepted in Nigeria, the country offers lessons in self-custody practices for Bitcoiners in developing nations.

Casa recently hosted a virtual conference, Keyfest, during which Peter McCormack of the “What Bitcoin Did” podcast hosted a conversation with Obi Nwosu, the cofounder of U.K.-based bitcoin exchange Coinfloor, and Nick Neuman, the CEO of Casa. They discussed the future Bitcoin, specifically in the context of developing world nations, such as Nigeria.

El Salvador really took the spotlight through 2021 in terms of Bitcoin adoption in developing nations. The legal tender law and the scale at which things were rolled out in response to that legislation were truly historical and at a scale unlike anything that has happened in the history of Bitcoin. There has never been a top-down directed adoption of Bitcoin like this anywhere else in the world and regardless of the hiccups that have happened along the way so far, or any potential pitfalls that could still lay ahead, this is a development for the history books.

But it’s not the only example of large-scale adoption occurring in the world today. Another example from the other end of the spectrum — a ground-up organic growth as opposed to top-down, state directed one — is happening in Nigeria in West Africa.

Nigeria’s Growing Bitcoin Acceptance

As told by Nwosu during the Keyfest panel, most people in the country did not have a positive view of Bitcoin at all. In fact, many had quite a negative perception. Initially, most Nigerians associated Bitcoin with internet ponzi schemes such as OneCoin, Bitconnect and the like. These types of scams and ponzis are rife in Nigeria, and as Bitcoin continued growing in size and value, it became more frequent for it to be used as the requested mechanism for scammer’s victims to send payments. There was no real conception, according to Nwosu, that Bitcoin was something independent of and unrelated to the scams people fell victim to, they simply viewed it as another facet of them.

This began to change in the wake of a popular wave of protests in 2020 (though the movement behind them began in 2017). In Nigeria there was a special unit of police officers called the Special Anti-Robbery Squad (SARS) tasked with specialized enforcement and investigation to combat robbery, carjackings, kidnapping and firearms crimes. The unit was formed in 1992, and has a long history of links to extrajudicial killings, disappearing people, extortion and torture.

Protests against this police unit gained wide popularity in October 2020 and after a short period, banks in Nigeria shut down the accounts of protestor aid groups and began preventing them from accepting donations in support of the movement. This led to these groups looking to Bitcoin to accept donations, and after this successfully led to international support for the protestors, this moment planted the seeds of the attitude toward Bitcoin in Nigeria slowly shifting in a positive direction.

In early 2021 in response to this shift, as well as a massive drop in the remittances to Nigeria through legacy rails dropping by almost 30% in the prior year, the Nigerian Central Bank banned banks in the country from interacting with cryptocurrency businesses. Despite this restriction, perhaps even because of it, the growth of Bitcoin in Nigeria has continued.

What Nigeria’s Bitcoin Acceptance Can Teach The World

Nigeria’s ground-up growth in the face of systematic government opposition to the use of Bitcoin is an inspirational story and a very valuable case study in terms of Bitcoin’s ability to thrive in an adversarial environment, but it also illuminates some of the unique obstacles for users in a developing country such as Nigeria.

Corruption is a massive problem in the country, as evidenced by the scandal surrounding the SARS police unit that instigated this massive public perception shift of Bitcoin in the first place. This introduces a lot of issues in terms of importing any kind of hardware device related to Bitcoin.

Anything coming into the country, which is essentially any hardware wallet that could be used to store bitcoin (because no major wallets are produced in Nigeria) must first pass through customs before getting into the hands of the user ordering it. This is a big potential risk to the user attempting to acquire a more secure mechanism for storing their coins.

It is very possible that customs agents could tamper with devices entering the country in a way that could lead to compromising people’s bitcoin when the device is initialized and coins are sent to it. They could even completely replace the device with a malicious one.

Most hardware wallet manufacturers take some steps to package their devices in such a way as to make such tampering evident, but not every company’s solutions to this problem is of equal quality, and some manufacturers do not engage in such practices at all. Some manufacturers have multiple layers of checks in the packaging, as well as combinations of checks on the actual device itself. Some companies simply employ basic tamper-proof stickers that cannot be resealed after opening.

At the very least, it is possible for a customs agent to simply steal or confiscate the device and not let it into the country at all, thereby costing the person ordering it a non-trivial amount of money for nothing. This, combined with the fact that many people do not have much bitcoin in dollar terms, puts most Nigerians in a situation where a smartphone is their only viable option for self custody. It doesn’t make economic sense to spend $100 on a hardware wallet when you only have maybe $100 to $200 dollars of bitcoin in the first place. It especially doesn’t make sense to do so when considering all of the risks of acquiring such a wallet in the first place.

Another factor related to the dynamic of self custody is simply the economics of interacting with the blockchain. Many Nigerians simply keep their coins on exchanges in custodial wallets because of the simplicity of managing things, and the economics of dealing with their own transactions on chain. This presents a big risk with the coming wave of FATF Travel Rule compliance rippling across the world right now. Countries like Estonia have already moved to increase KYC requirements in the process of implementing the FATF Travel Rule policies in legislation, and it is very possible that other countries might follow a similar example over the next year.

If such a laws were to be adopted in Nigeria, this would create a “digital apartheid,” as Nwosu put it. Coins stuck on custodial platforms would only be useful for interacting with other custodial wallets, with all of the involved users’ activities completely surveilled and tied to their legal identities. Coins self-custodied by people anonymously would begin existing as a parallel system, unable to interact with any custodial services. This is obviously not a good thing, but there is also the potential for this to be a motivational kick to build even more peer-to-peer services and infrastructure in response to such an occurrence.

Given that Bitcoin really started exploding in Nigeria because of the government cracking down on it, if such a restrictive move was to create a positive outcome in the long-term anywhere, I think it would be somewhere like Nigeria.

One potential solution to prevent Nigerians from being trapped in such an FATF digital apartheid system is something that has existed in one form of another for years now: collaborative custody. Multisig is an extremely powerful tool that Bitcoin provides to people, and when looking at the two major problems outlined above that present themselves for Nigerians securely custodying their own bitcoin, it can be an incredibly powerful tool for them.

A smartphone can be a very dangerous storage mechanism for someone’s bitcoin, but combined with multisig and a friend or family member’s device, the security of a smartphone wallet can be dramatically improved. This could enable families and groups of friends to collaboratively manage their bitcoin holdings in a way that would not expose everyone’s bitcoin to a single point of failure when self custodying.

To take things a step further, although not necessarily alleviating the supply chain and customs risks, collaboratively custodying funds in a group using multisig can also alleviate to a degree the costs of purchasing a hardware wallet in relation to the value of the bitcoin you are securing. It might not make economic sense to spend $100 on a hardware device to secure a few hundred dollars worth of bitcoin, but if you get a close group of 10 to 15 friends and family members together who collectively might own a few thousand dollars of bitcoin, spending a few hundred on hardware devices to manage that bitcoin more securely might make sense.

Working together in communities as opposed to independently as an individual, as much as this might sound against the principals of Bitcoin to Westerners, allows people in a country like Nigeria to overcome the barriers of using Bitcoin in a self sovereign way that result from the inescapable costs of interacting with the blockchain directly. And to boot, it actually synergizes very well with the traditional African culture of relying heavily on family and friends to deal with things in life. In a culture based heavily around tight-knit communities looking after each other, this model of interacting with Bitcoin makes sense.

Coming back to El Salvador again momentarily, El Zonte has actually pioneered exactly this type of Bitcoin model to the extreme. The Galoy Bitcoin wallet that the town uses is actually a custodial community bank backed by a multisig vault run by trusted members in the community. A town of 3,000 people have been successfully using such a community Bitcoin Bank for years.

That’s right, 3,000 people. Now, that might not be a viable trust model in something like a larger city, with much more impersonal connections across larger social groups, but this is a demonstration of how largely such a collaborative custody model can scale when there is that tight social interconnection between people. Most of the funds held by the bank are stored in an on-chain multisig wallet, with a small amount of funds online in Lightning channels to allow people using the Galoy wallet to transact off chain with people outside of the community bank. It also obviously allows purely custodial transfers between users of Galoy.

This type of model is already implemented in Galoy, and could easily be implemented by local Bitcoiners in Nigeria. As well as Galoy, there are multiple other software suites that can accomplish the same set up. LND Hub implemented by Blue Wallet, LNBits by Ben Arc and LN Bank currently being worked on by Dennis Reiman of BTCPay Server. All of these software projects allow an accounting system to be set up on top of a Lightning node and allow multiple users to transact using one node’s channel. As long as there is a trusted operator or operators in a community or social circle to operate the node, anyone willing to trust them can have a cheap and cost effective way to transact using Bitcoin.

The reality of the developing world is that, given the average income of someone in a place like Nigeria, there are numerous economic barriers that make it very expensive in the long term to engage in self custody with the degree of security most Western Bitcoiners are accustomed to.

Without waiting for long-term price appreciation of bitcoin, people either have to settle for subpar security setups or leave things in the custody of a third party. The notion of a collaborative custody model affords people the option to participate directly in a multisig setup with other people and improve the security of funds that they maintain some degree of direct control over. Or, if that is not practical, to at least rely on a custodian that is a trusted family member or friend with a real social connection to them. That is an unbelievable improvement compared to a corporation with an impersonal relationship ultimately based around trying to find some way to make money off of a user as a customer.

Places like Nigeria are demonstrating that Bitcoin can indeed thrive in an environment where government’s are being openly hostile to its existence. Outside of the box thinking along the lines of community banks and multisig collaborative custody can provide tools to people in such an environment which allow them to make more optimal tradeoffs between the security and utility of their interactions with Bitcoin. If people embrace them, Bitcoin has a very bright future ahead in places like Nigeria, and so will the people who use it.

This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.


dYdX Founder Advises Crypto Industry to Abandon US Customers, Deeming Market Effort Unrewarding





The founder of the decentralized exchange, dYdX, asserts that individuals involved in cryptocurrency development should direct their efforts toward international markets beyond the United States for the upcoming five to ten years.

Antonio Juliano conveys to his audience of 49,400 on the social media platform X that the prevailing regulatory uncertainty within the United States does not merit the associated challenges or concessions.

Juliano contends that it would be more prudent for cryptocurrency developers to establish their products in alternative countries and subsequently re-enter the United States from a position of strength.

“Cryptocurrency developers would be well-advised to temporarily discontinue catering to the US market and instead seek re-entry in a span of 5-10 years. The complications and compromises involved do not warrant the endeavor. Moreover, a substantial portion of the market exists overseas. It is recommended to innovate in those regions, ascertain product-market fit, and then return with greater bargaining power…

The paramount objective shared among all stakeholders is to secure a significantly more potent product-market fit for cryptocurrency. The pursuit of a robust product-market fit does not necessitate flawless distribution. A multitude of substantial overseas markets present avenues for experimentation.”

Juliano articulates that advocating for more amiable cryptocurrency regulations demands time, although the process could be expedited if developers manage to introduce products that elicit consumer demand.

“However, this perspective does not undermine the importance of efforts to influence US cryptocurrency policy. On the contrary, such endeavors are absolutely vital. Given the protracted timeframe required (in anticipation of re-entry), and considering that much of the world takes cues from the United States, it becomes evident that our progress in shaping policies hinges upon achieving global-scale product usage.”

The dYdX founder proceeds to emphasize that, with time, American citizens will come to realize that cryptocurrency is inherently aligned with US values and principles.

“The tenets of cryptocurrency closely align with American values. What concept could be more quintessentially American and reflective of capitalist ideals than a financial system conceived for the people, driven by the people, and answerable to the people? This, indeed, constitutes the very essence of our endeavor.”

Read Also: Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn




bitcoin coin on background of business charts

Bloomberg Intelligence’s senior macro strategist, Mike McGlone, is conveying a pessimistic outlook for Bitcoin (BTC) in the immediate future.

During a recent interview on Kitco News, McGlone underscored that Bitcoin is currently displaying bearish signals even amidst the ascent of other high-risk assets.

“In the event of a downturn, adhering to a rule prevalent in bear markets, resources across the board could witness a reduction in value, and Bitcoin will not be an exception.

A crucial observation is the necessity for Bitcoin to exhibit divergent strength at a certain juncture, akin to the behavior of treasury bonds and gold in a deflationary economic environment. Regrettably, this pattern has not materialized.

After attaining its peak towards the conclusion of Q1, reaching approximately $31,000, driven by optimism and the influence of exchange-traded funds (ETFs), Bitcoin subsequently retraced to $25,000 or approximately $26,000. Presently, it is manifesting divergent weakness in contrast to the concurrent upsurge in the stock market.”

According to McGlone’s analysis, the ongoing “economic reset” implies a continuation of Bitcoin’s recent downward trend, although he anticipates that the premier cryptocurrency will ultimately attain a six-figure valuation.

“While I believe that Bitcoin will eventually achieve a valuation of $100,000, the onset of a global economic reset, as I anticipate, characterized by a standard deflationary recession leading to a decline in the housing and stock markets, analogous to the conditions of 2008—though arguably exacerbated due to the ongoing removal of liquidity from the system—Bitcoin’s role as an influential precursor comes to the forefront.

This underscores my point that Bitcoin has recently been taking on the role of a harbinger of trends. Its value ascended briefly to around $31,000, only to subsequently trend downwards. From my perspective, it serves as a leading indicator for a majority of high-risk assets.”

As of the time of writing, Bitcoin is trading at $26,079.

Read Also: Carbon Footprint of Proof-of-Work vs. Proof-of-Stake: A Comparative Analysis of Blockchain Consensus Mechanisms

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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Lead Developer Announces Imminent Public Reopening of Shibarium




a shiba dog on a street

Shiba Inu’s (SHIB) Latest Layer-2 Scaling Solution Nears Public Relaunch Following Recent Technical Challenges

Shytoshi Kusama, the enigmatic lead developer behind the SHIB project, has shared in a recent blog post that significant progress has been made in addressing the technical setbacks that temporarily halted the operation of Shibarium, SHIB’s new layer-2 scaling solution. The initial release of Shibarium encountered network issues that prompted its temporary closure. However, Kusama assured the community that diligent testing and parameter adjustments have led to notable improvements.

Kusama elaborated, stating, “After extensive testing and parameter refinements aimed at achieving a ‘ready’ status, Shibarium has undergone enhancements and optimization. While still undergoing testing, it is now successfully producing blocks.” Additionally, to prevent a recurrence of the past network overload, Kusama revealed the implementation of a new monitoring system and supplementary fail-safe measures. These include rate limiting at the RPC (remote procedure call) level and an automated server reset mechanism in the event of another surge in traffic.

With these advancements in place, the team is on the verge of reopening Shibarium to the public. As part of this progression, more network validators will be integrated into the ecosystem on August 23rd. Kusama emphasized the significance of this step, remarking, “Tomorrow, additional validators will become operational, expanding the options available for staking BONE. This will allow for a distribution of rewards earned through their roles within our community. As testing concludes, we will once again prepare for public utilization.”

Shibarium’s previous technical difficulties were attributed to an overwhelming influx of users and transactions during its initial launch. As of the current writing, SHIB is trading at $0.00000798, marking a 0.4% increase over the past 24 hours.

Read Also: Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration




Sam Bankman-Fried

FTX’s co-founder, Sam Bankman-Fried, is currently seeking a temporary release from incarceration. The purpose behind this endeavor is to engage in collaborative strategizing with his legal representatives within the confines of the federal courthouse situated in Manhattan.

In a formal letter dispatched to US District Judge Lewis Kaplan on a Friday, Bankman-Fried’s legal team expounded that their client’s capacity to effectively scrutinize the extensive legal documents pertaining to his case has been significantly curtailed during his time spent incarcerated at the Metropolitan Detention Center (MDC) in Brooklyn.

Christian Everdell, the attorney representing Bankman-Fried, divulged that the government recently disseminated a voluminous three-quarters of a million pages of Slack communications. These were originally due several months prior. Expressing the urgency of the situation, Everdell articulated, “Only last week did the government furnish an aggregate of approximately seven hundred and fifty thousand pages of Slack communications that were originally stipulated for release months ago. Given the current timeline, it is a futile endeavor for Mr. Bankman-Fried to endeavor to review these materials.”

He underlined the pivotal necessity for Bankman-Fried to collaborate meticulously with his legal team, emphasizing his dire need to avail himself of an internet-enabled laptop within the courthouse premises. Such a resource would undoubtedly expedite the process of comprehensive document review, an imperative undertaking in light of his impending fraud trial scheduled for the forthcoming October.

In riposte to Bankman-Fried’s plea for reprieve, the prosecuting body voiced apprehensions regarding his adherence to the prerequisites concerning his planned defense strategy. Notably, they underscored that Bankman-Fried is yet to furnish the complete gamut of essential information regarding the counsel upon which he predicated his actions.

The prosecutors proffered caution that unless Bankman-Fried promptly discloses the minutiae regarding the counsel he received and the provenance thereof, any attempt to interject such a defense during the trial should be summarily proscribed.

Although the prosecutors extended an offer to facilitate the transfer of documents onto hard drives for Bankman-Fried’s perusal within the MDC premises, a viable laptop-based solution was deemed unattainable. Initially, the notion of relocating Bankman-Fried to a more compact, upstate correctional facility where he could access an internet-enabled laptop was contemplated by the prosecutors. However, this proposal was met with resistance from prison officials.

Regarded for its starkly onerous conditions, the Metropolitan Detention Center has cultivated a notorious reputation among its inmate population.

Bankman-Fried’s Incarceration Stemming from Unsanctioned Internet Utilization

As documented, Judge Kaplan sanctioned the re-imprisonment of the beleaguered cryptocurrency luminary, citing alleged instances of witness tampering.

In that juncture, Judge Kaplan pronounced that a strong prima facie case existed indicating that the accused had endeavored to tamper with witnesses on no fewer than two separate occasions.

The decision was additionally influenced by Bankman-Fried’s unsanctioned use of the Internet while released on bail under the guardianship of his parents at their abode located in California.

Judge Kaplan discerned that Bankman-Fried had indulged in excessive communication with various individuals via electronic correspondence, even resorting to the utilization of a virtual private network.

Concurrently, the disgraced progenitor of FTX is simultaneously grappling with novel allegations brought forth by the Department of Justice (DOJ). These allegations encompass the misappropriation of customer deposits, including the purported embezzlement of said funds.

An indictment filed on the most recent Monday delineates that Bankman-Fried stands accused of diverting and embezzling customer deposits from the FTX platform. The illicitly obtained funds were purportedly channeled towards political campaign contributions, collectively amassing a substantial sum exceeding one hundred million dollars, in advance of the 2022 US midterm elections.

The indictment further posits that despite Bankman-Fried’s intimate knowledge of FTX’s fiscal insufficiencies, he continued to channel the purloined funds into personal investments, acquisitions, and political campaign contributions.

Read Also: U.S. Securities and Exchange Commission Nearing Appeal in Ripple Lawsuit's XRP Decision

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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U.S. Securities and Exchange Commission Nearing Appeal in Ripple Lawsuit’s XRP Decision




close up photo of a wooden gavel

The U.S. Securities and Exchange Commission (SEC) is taking significant steps towards pursuing an appeal in their recent legal battle against Ripple, indicating a potential shift in the course of the lawsuit.

James K. Filan, an experienced defense attorney specializing in crypto-related legal matters, has shed light on the latest developments. District Judge Analisa Torres has initiated a structured process for considering the SEC’s request to present an interlocutory appeal—a move that would allow the SEC to contest certain aspects of the ongoing case.

It’s important to note that this preliminary step does not guarantee the authorization of an interlocutory appeal; rather, it signifies that the SEC has been given the opportunity to formally request such an appeal.

Judge Torres has outlined the timeline for this process in her official order. The SEC is expected to file their motion for the appeal by August 18th. Subsequently, Ripple is given until September 1st to submit their opposition papers. If the SEC deems it necessary, they have until September 8th to file a reply.

The news of these developments had an immediate impact on the cryptocurrency market. Following the announcement of the judge’s order, the value of XRP experienced a sharp decline. The price, which had been trading at approximately $0.571, dropped to around $0.499 at the time of writing. This decrease of over 12% aligns with the broader trends observed across the cryptocurrency landscape.

The legal clash between the SEC and Ripple began when the regulatory agency filed a lawsuit against the San Francisco-based payments company in late 2020. The SEC alleged that Ripple had engaged in the sale of XRP without registering it as a security.

In a significant turn of events last month, Judge Torres issued a ruling that had mixed implications for both parties. She determined that Ripple’s automated programmatic sales of XRP, which occurred on the open market, could not be classified as securities offerings—a pivotal point of disagreement between the SEC and Ripple.

However, the judge did uphold a key aspect of the SEC’s argument. She agreed with the agency’s assertion that Ripple’s direct sales of XRP to institutional buyers indeed amounted to a securities offering, reinforcing the complexity of the case.

As the legal battle continues to unfold, the spotlight remains on the actions and responses of the SEC and Ripple, and how their ongoing dispute could shape the future regulatory landscape for cryptocurrencies and digital assets.

Read Also: Helium (HNT), a cryptocurrency project built on the Solana blockchain, introduces its new mobile phone plan.

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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