Bitcoin Forum

If, at this point in time, a government like Nigeria decided to only sell its resources for Bitcoin.

What would the implications be for the Trade in Nigeria and for Bitcoin?

if it is to be applied in Nigeria, the infrastructure must be equipped, among others, a stable internet connection, if there is damage to the backup power should exist to make the internet to stay connected, bitcoin can not be separated from the internet, so that nigeria should prepare power reserves in quantities large enough, then that must be ensured that the entire people of nigeria are already familiar with the Internet, it depends on the socialization of the government, hopefully this can be quickly realized in nigeria ...  :o

You just made an assumption about a scenario one day may happen. But it can't be over night.

Its good for btc world , but you know and we know about magic of nigeria  ;D
Too much internet scam come from that country.
And their Gov will not approved that , maybe only personal transaction from some individual merchant.
And its more save use $ than btc for now.
too much risk for a country who dare to accept BTC for their export payment.

Some internet scams, and the fourth largest exporter of oil in the world.

Nigeria is not the hub of internet scam, some people even pretend to be a Nigerian just to scam people  :(

Nigerian Economy Overtakes South Africa’s on Rebased GDP.

http://www.bloomberg.com/news/2014-04-06/nigerian-economy-overtakes-south-africa-s-on-rebased-gdp.html

This is a good point about the market cap of bitcoin not being large enough. One of the princes of a middle eastern country suggested something similar with their oil exports and the counter-arguement was the same.

Another point is that since the dollar is still the world reserve currency, all that would happen is, people would buy bitcoin to buy the resources then would sell the bitcoin for the resources then the selling country would have a bunch of bitcoin that they cannot spend because what they need is not priced in bitcoin so they end up selling the bitcoin

I guess the lead could be taken by a small country. Then as international practices become established, others could follow.

The Nigerian economy is too big and btc is too unstable - the Federal government would not be keen on such an idea and might take steps to hinder such a plan. They refuse to allow anyone to exchange their national currency with an entity that is outside of the purview of the Nigerian legal system, for them to completely relinquish control of all currency decisions would be a huge step in another direction.

OP doesn't seem to understand the nature of the Nigerian economy - it is very much based upon private commerce but licensing and government oversight plays a role. Even if you got the businesses on side they push them into operating outside of the law.

OP may as well ask what would happen if America traded in btc instead of dollars...

Do you think the average nigerian can afford a personal computer/smartphone? because I dont think so.

A lot of Nigerians have smartphones from what I saw, particularly the youngsters.

That would be idiotic. Why would a country sell their valuable commodities for a speculative digital currency controlled by people who bought it for pennies just a few years ago.

Perhaps if bitcoin was a bit older (over a decade) and more stable it would feasible, but now... no way.

Hopefully news like that will come up in a few years

We already see an increasing of countries trading in Gold or other currencies than the USD

If Nigerian export will be denominated in BTC sure enough the next Nigerian scam emails will ask you BTC instead of US$. By the while some exports as oil are priced on Exchanges in world trade standard currency, not in national one.

Nigeria would be full of BTC.

Most i've seen is really, really old cheap and used ones that would struggle when trying to deal with a wallet. All they could hope for is accessing it via an online wallet in blockchain.info I guess.

I guess it depends on locale and the people you associate with.

Nigeria export $93.55 billion (2013 est.)

Given 13 M BTC

93,550 M$/13M BTC = USD 7,200/BTC
And they would end with all the existing BTC in one year (if the price was fixed to 7200$).
If we suppose they just keep the difference between imports and exports (35 billions) the price would be 2888 $.

Now, given the quantity of coins really available on the market to be bought is a lot less than 13 M, the price would go a lot higher (say around 5-10 higher) and this without taking in account the fact prices are determined at the edge and not from a mean.

The problem is they would end with all BTCs in one year at these prices.

If they just used BTCs to pay for imports and bought the exact same number of BTC with their imports (and kept the profits in something else), they would need to receive and send 13K BTC every day at a mean exchange rate around 1200 $. They would, also, be prudent to keep at least ten days of BTC as reserves (130K BTC - little less than 30 days of mining).

Wouldn't nigeria need to spend some of the money it receives from exports domestically? Most countries do and I don't see any reason why they would not. Also I don't see why they would need to keep the money they receive from exports in bitcoin even if they did not need to spend it as bitcoin is very unstable and is far from certain to increase in value

If we scale up your argument...the maximum theoretical value of each BTC would be 5.7M$. Accordingly to CIA's World Factbook the World GDP (https://www.cia.gov/library/publications/the-world-factbook/geos/xx.html) last available figure was 74.31 trillion $, so each of the 13 million BTC would be valued at $5.7 million. Nice to know but sad it cannot be reached for a very long time (if ever).

I come around a value (little more than 10M) similar to your 5.7 M $/BTC taking in account just BTC being used only for FOREX (100% global FOREX) and some being used for tax heaven purposes instead of banks accounts. This do not account for the no tax haven accounts in all the other banks, the spare pocket money, etc.

It is not impossible Bitcoin be the cause of a larger GDP and faster economic activity; so as economic activity increase and the GDP grow faster the value could go there before we could expect.
BTC enable a faster economic activity because it allow payments to be near instantaneous compared to today:
Today a SEPA need, in the best cases, 1 day. Wire transfers around the world need several days.
One hour (6 confirmations) it is just 24x faster than the best case scenario.
You could reorder the goods sold now in an hour and have the producers paid in advance in another hour.
This is another, entirely different (qualitatively and quantitatively), level of Just-In-Time organization.

I just computed how much should be worth a BTC if Nigeria want to be paid in BTC and obtain the same return from exported goods.
Obviously, if they accumulated BTC they do because they want spend them. it is obvious the security of the network rest on the value transferred by it. If Nigeria hoard all the BTC and no value transfer happen, the miners will start to do something else, as the reward go down.
If they pay people with BTC obtained from imports, these BTC will flow back in the general economy in large extent and flow out of the country, in a dynamic balance.

This is because I computed a case where the IN and OUT flows are equalled and Bitcoin is used just as a payment network and no balance is kept.

I didn't argued about the pros or cons of the Nigerian government keeping some balance of BTC. It would have some advantages and some disadvantage for them.
IMHO, if the Nigerian government require BTC for payment of its exports and imports, the exchange rate would shoot up ten times or more.
At that level, the stability of the exchange rate would be a lot higher, because would be a lot more costly to move the price up or down.

Remember they would need someone to buy 13K BTCs every day (and deliver immediately) at 1200$/BTC, they they pay back the imports.
13K BTC every day is 4 time the mining at the current rate, 8 times after the next halving.

Nigeria is a satellite/colony of the west - its economy is effectively run and controlled by the Seven Sisters (https://en.wikipedia.org/wiki/Petroleum_industry_in_Nigeria#Joint_venture_companies) oil conglomerates. They pay off corrupt Nigerian government officials, making them extremely wealthy (https://en.wikipedia.org/wiki/Petroleum_industry_in_Nigeria#Repression_of_protest_and_government_corruption) in the process, that they may continue to plunder the country's oil resouces. Most people there (100 million) live on less than a dollar a day (http://www.bbc.co.uk/news/world-africa-17015873), and in poverty (absolute BTW - not relative).

  Same old same old.

In short, Nigeria isn't in a position to suddenly demand anything.

Yup, the dollar empire has them by the balls, how surprising. About phones, 1st world companies that ask you if you have any old phones that you do not want... what do you think they do with your old ass phones? they resell them in 3rd countries. Ironically, they work better there than modern smartphones, given their infrastructures are poor, so a 2000 phone works better than a 2014 one.

What if Nigeria suddenly decide that all export would be done in cows. Would they sooner or latter collect all Wold cows in their country?

Well, I think that in such a case we would end having Nigerian milk chocolate instead of the Swiss one.  ;D

No, I can tell you from first hand experience that it won't work. The infrastructure just isn't there yet. I mean, there isn't even 24-hour power supply. Maybe in 20 to 30 years, and that's optimistic.

http://mobility.ng/2014-is-nigeria-becoming-a-smartphone-market/

It wouldn't work as a of now, smartphones are the minority.

Yes, a project in Kenya to experiment with the concept of mobile phone airtime as a currency by formalizing it to allow Safaricom agents to become cash out agents- 5+ years later over 30% of the Kenya GDP is conducted over M-PESA which has shown the world what happens when country wants an innovation badly and a government recognizes its overwhelming benefits and does not regulate it. Bitcoins may have a while yet to get to mainstream adoption, but it could be faster in Africa like mobile money.
And do the same to financial services innovations in Africa across borders in the same way that mobile money is doing domestically with some unique benefits.