Regardless of the current concerns about the high network fee, bitcoin trading volumes are on the upsurge of African content. The data showed a rise in volume on bitcoin trading platforms starting in April. It was at a time when many countries were implementing lockdown measures.
Evidence suggests that Code 19 regulations are the cause of the increase in volume. This “evidence” is witnessed in Nigeria, which is already one of the world’s largest cryptocurrency markets. Some onlookers in the country say that a struggling economy and a stable currency are helping to create new momentum for bitcoins and altcoins.
For example, they show how the COVID-19-infected reduction in oil revenues has increased the local currency’s pressure. Increasing pressure on the local currency unavoidably leads to capital flight and a shortage of foreign currency.
Between March and August 2020, the Nigerian currency decreased by 33% from 360 to 480 units per US dollar. As a result of the problematic shortage of hard cash, some banks have limited withdrawing US dollars Nigerians can withdraw every month.
Lead for Dash in Nigeria explains the situation, which has been affected by similarly closed economies in African countries. It unavoidably leads to growing interest in alternatives such as cryptocurrencies as Nathaniel Luz.
Nathaniel Luz says that the reason that led to more Nigerians keeping their cash in crypto is the Naira’s increased instability.
Higher transaction fees:
Yet, as Luz contends, the high transaction fees related to the bull market, especially on the bitcoin network, are proving to be an undesirable dynamic.
Luz explained that Bull runs usually generate excitement and hope for the crypto space, serving as a good advert for newcomers. Due to the mempool being full, we see increased fees and slow verification times with each Bull Run for BTC transactions.
It makes the foremost cryptocurrency less attractive as an alternative means of transacting or transferring funds. Chris Maurice, the CEO of Yellowcard Financial, is the echoing of Luz’s opinions. In Diaspora, the digital currency exchange helps Nigerians to send money to their homes using bitcoin.
Maurice says that his organization is “seeing an increase in volumes,” although it acknowledges that “higher transaction fees have certainly affected our operational aspects.”
Chris Maurice shares a policy his company has adopted to diminish the influence of high fees.
“We give BTC a constant boost, and at this point, I only move the bitcoin at about 2 to 3 am EST while everybody in the US is sleeping and the chain is a bit quieter. I will direct with a ‘reasonable’ fee of 20+ dollars and pray that the blocks will be fast and the coins will not be seized in 24 hours or more.”
William Chiu, one of the BTC traders from Zimbabwe, explains that paying higher fees helps get transactions verified faster, but the final transaction charge will be considerably higher.
To send bitcoin just 100 dollar worth, you will have to pay a minimum cost of 13 dollars. When compared to traditional delivery channels, such costs reduce remittances through bitcoin.