EFFECT OF CRYPTO CURRENCIES ON THE VALUE OF THE NIGERIAN NAIRA
57 Users found this project useful

 EFFECT OF CRYPTO CURRENCIES ON THE VALUE OF THE NIGERIAN NAIRA

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

Cryptocurrencies have become one of the most trending topics in recent economic and financial issues. Since Dotcom crisis, the commerce on internet (ecommerce) has been rapidly increasing and retail industries have been undergoing a revolution as internet sales are booming with more and more techsavvy consumers go online to shop. The appetite of stock market investors for ecommerce shares seemed insatiable as investments on internet retailer were massively oversized, despite fears over the future of the Internet after the dotcom bubble burst and serious concerns about the safety of online shopping by credit cards. Until birth of first cryptocurrency -Bitcoin- in 2009, the online commerce was mainly intermediated by financial institutions serving as trusted third parties to process electronic payments. Although this system was well enough for most transactions, it was working very slowly due to controls of financial institution (problem of privacy and trust) and it was somewhat cost (transaction and commission costs).

It triggered emerge of decentralized cryptocurrencies that bypass financial controllers, thus, transactions are very fast, smooth, and has zero cost. A cryptocurrency is defined as “a digital asset designed to work as a medium of exchange using cryptography to secure the transactions and to control the creation of additional units of the currency”. First ever use of cryptocurrency in online trade was on May 22nd 2010 by Laszlo Hanyecz, a computer programmer from Florida, for two pizzas with the amount agreed at 10,000 Bitcoins (Yermack, 2013), which would be equivalent to $155.80 million today (December 2017).

Crypto currency constitute as a subset of alternative currencies or better referred to as digital currency  is a digital asset from block chain technology which is designed to function  as a medium of exchange using cryptography to execute  transactions and to control the creation of additional units of the currency. The  evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using  encryption techniques  to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank,precipated the introduction of crypto-currency into the Nigerian economy. Consequently a digital currency is beginning to gain wide information and acceptance; and one of the most famous is bit coin. Other digital currencies include Swiss coin and one coin. bit coin, Swiss coin and one coin are crypto currencies or digital currencies created and controlled using cryptography.

Currently countries such as Brazil, Canada, Uk, Germany, south Korea, India have introduced  Automated Teller Machines (ATM) for crypto currency so as facilitate   banking technology. In Nigeria the patronage and acceptance of  digital currencies is gaining wide popularity. The owners do not require the  central bank; nor any physical bank. Once you are  a subscriber, you only know yourselves and they give you a bit of the bitcoin which can be converted  to cash and used for payment in some countries. Currently bitcoin is considered the best among all other crypto-currency, the bitcoin is adjudged the pacesetter. Mining is another type of cryptocurrency. Mining is a way of getting these coins and putting them up for sale all digitally. Also the Billion Coin (TBC) is another type of crypto currency newly introduced with an opening price of 0.001 and has since increased in value. The Trading on crypto currencies such as TBC, Bitcoin, SwissCoin, Edinar Coin and other digital currencies, happens peer to peer. The research therefore seeks to investigate the effect of crypto currencies on the value of the Nigerian naira.

In 2017, the popularity and use of cryptocurrencies has increased dramatically. People are "investing" vast sums of money into "assets" that have no history of producing revenue, and those assets are rising in price only because other people are also pouring money into them. Billions of dollars have been poured into more than 1,000 new digital coins issued by start-ups in 2017. These coins mimic the construction of Bitcoin, meaning they can be freely traded on digital exchanges and have no central bank standing behind them. This has raised many doubts and questions about current and future of decentralized cryptocurrencies. There are two major views. One side argues that it is a bubble with no real assets that inevitably will end with burst. The other side opines that cryptocurrency markets will become an avenue that will give millions of people an opportunity to participate in a global financial network worth tens of trillions of dollars. From young millennials in developing nations with small savings and big ambitions to mom-and-pop business owners looking to reinvest some profits in promising crypto-projects, these kinds of people will be the backbone of this industry.

1.2 Statement of the Problem

Crypto currency constitute as a subset of alternative currencies or better referred to as digital currency  is a digital asset from block chain technology which is designed to function  as a medium of exchange using cryptography to execute  transactions and to control the creation of additional units of the currency. The  evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using  encryption techniques  to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank,precipated the introduction of crypto-currency into the Nigerian economy. Consequently a digital currency is beginning to gain wide information and acceptance; and one of the most famous is bit coin. Other digital currencies include Swiss coin and one coin. bit coin, Swiss coin and one coin are crypto currencies or digital currencies created and controlled using cryptography.

The entry of crypto currency into the Nigerian financial sector is gaining wide popularity but with fears and doubt about its functionality in since there is no regulatory framework from the apex bank. But there is wide call for CBN to commence appropriate regulatory action. However it is pertinent to note that it is the CBN’s monetary policy restrictions on foreign exchange, that have led Nigerians to innovate the use of bit coin to access foreign exchange. Therefore the eradication of the currency would be viewed as irrational and unworthy of a country which seeks to promote domestic industry and innovation. Consequently it may be found appreciable if the join several other countries of the world to approve its operation in Nigeria. Therefore the problem confronting this research is to determine the effect of crypto currency on the value of the Nigerian naira.

1.3 Objectives of the Study

1.       To determine the effect of crypto currencies on the value of the Nigerian Naira

2.      Examine the relationship between cryptocurrencies and the value of Nigerian Naira

3. EXamining factors that influence prices of some common cryptocurrencies

1.4 Research Questions

1)      What are the effects crypto currencies on the value of the Nigerian Naira?

2)      What is the relationship between cryptocurrencies and the value of Nigerian Naira?

3)      What are the factors that influence prices of some common cryptocurrencie?

1.5 Significance of the Study

The increasing wave of crypto currency into the economy with its attendant effect propels a study of this nature to facilitate better understanding of this new concept and to determine its effect on the value of Nigerian money. The study shall also serve as a veritable source of information.

1.6 Research Hypotheses

Ho1: Crypto currencies has no effect on the value of the Nigerian Naira

Ho2: There is no relationship between cryptocurrencies and the value of Nigerian Naira

1.7 Scope of the Study

The study focuses on the appraisal of Effect of crypto currency on the value of the Nigerian Naira

1.8 Limitations of the Study

The research was confronted by some constraint such geographical factor and logistic

1.9 Definition of Terms

Cryto Currency: Crypto currency constitute as a subset of alternative currencies or better referred to as digital currency  is a digital asset from block chain technology which is designed to function  as a medium of exchange using cryptography to execute  transactions and to control the creation of additional units of the currency. The  evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using  encryption techniques  to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank, precipated the introduction of crypto-currency into the Nigerian economy.

References 

Ayo Alonge (2017) NDIC, CBN consider crypto currency Bit coin Composite Quote (XBT)"(2014). CNN Money. CNN

Nermin Hajdarbegovic (7 October 2014). "Bitcoin Foundation to Standardise Bitcoin Symbol and Code Next Year". CoinDesk.

Romain Dillet (9 August 2013). "Bitcoin Ticker Available On Bloomberg Terminal for Employees". TechCrunch.

 

Siluk, Shirley (2 June 2013). "June 2 "M Day" promotes millibitcoin as unit of choice". CoinDesk.  

GET THE COMPLETE PROJECT

Peace From Unilag

I cried not knowing how to go about my project but the day i searched online and saw iprojectmaster, i called and got my full project in less than 15minutes, i was shocked!


Oluchi From Michael Opara University

If you are a student and you have not used iprojectmaster materials, you are missing big time! iprojectmaster is the BEST


Uduak From Uniuyo

iProjectMaster is the best project site for students. Their works are unique and free of plagiarism!


Musa From Ahmadu Bello University

Thank you iprojectmaster for saving my life, please keep it up and may God continue to bless you people.


Samuel From Ajayi Crowther University

You guys just made life easier for students. Thanks alot iprojectmaster.com


Merry From BSU

I am now a graduate because of iprojectmaster.com, God Bless you guys for me.