The Managing Director Awoof-dey, an e-commerce platform, Mr. Peter Elofusim, says cryptocurrency, a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, is a new vista of wealth creation in the digital space. In this interview with Blessing Olaifa, Elofusim says the banks and other financial institutions should re-strategise their wealth creation models with Information Communication Technology (ICT) to enable them advance the ladder through digital money.
Information Communication Technology (ICT) is said to a driver of investment opportunities but there is the perception that it is also not safe making money online. How do you react to this?
Well, as it is, I will yes, there is a place for naysayers. There is one thing that cannot be taken away and that is the fact that if Information Technology (IT) has been driving business for the past 100 years in Nigeria, there will still be people who will wake up and say they will not be part of it, but the truth about it is that it is all part of human nature to resist change. But, eventually, human beings will fall in line, because not changing is fatal. Eventually, human beings will adapt. I know there are people who will tell you that they don’t want to use automated teller machine (ATM) card. Some people will tell you they don’t want to do online banking. But over time, when they see the comfort and convenience from that come from it, you will start seeing them use the ATM card or do online banking, which abinitio they rejected.
Is technology, therefore, forcing people to change their perception in doing business?
I will start with a little background and it is this: You would have noticed that money had evolved over time and it had been changing forms. Though a lot of people didn’t quite notice it, it started from trade by barter: you give me tomatoes, I give you onions. Later it moved to cowries and coins and from there, it moved to paper money and again it proceeded to plastic money referred to as ATM cards, which millions of Nigerians are using today. In all these forms of monies, there is one essential thing that money has been lacking which are as means of storing wealth and assets that will remain relatively stable over a period of time. This is because once you store money in any ‘fiat-form’ like naira, pound or dollar, there is that likelihood that it will depreciate over time because of the dynamics of social and political events in any country. For example, if you have stored money in pounds, when Brexit happened, you are likely to have lost about 30 percent of the value of that money just because a socio-political event happened in Britain. If you, therefore, store your wealth in dollar for instance, just because, Mr. Donald Trump won the United States presidential election, you would have lost a considerable amount of wealth. That tells you that there is no safe haven for any currency to store wealth. In other words, all currencies are subject to depreciation. Investigation has shown that businessmen are looking for transactions that guarantee instant payment, however and to some extent you can say that technology within the local and external environment guarantees instant transfers/payments. Also, as in most cases, when this is not delivered within 24 hours due to glitch or other reasons, complaints are lodged and it will take the bank 72 hours to resolve the issue. So, it means that there is no 100 percent guarantee of fool proof instant money transfer and therefore clients and people may wait for upward of three days for accounts to be credited overseas. Today, modern businesses do not have that luxury of time any more. It is the answer to these discrepancies that led to the emergence of money in digital form known as cryptocurrency which is gaining wide acceptance and creating wealth for people across the globe.
What is the evolution of this currency?
The first cryptocurrency that came into existence was established by a Japanese. He started basically by putting out some mathematically algorithm on the internet in such a way that any person who solved a mathematical equation was rewarded with a coin called or known as Bitcoin. In the course of time, there were hitches because it was only those who were mathematically and technically oriented that could solve the equation and as more equations were solved they were getting more difficult just like the popular Who Wants to be a Millionaire programme on TV. Essentially, the Bitcoin that was created in 2009 became the answer to the lack of stability in storing wealth and assets as an instant payment for transactions that will not depreciate over time. The man who developed this currency in digital form was though facially anonymous he even did not envisage or know that Bitcoin was going to be a success. As things evolved, the first Bitcoin was therefore exchanging for $10. With the spread in technology, businesses started accepting it as they found out that if wealth and assets were stored in digital money/currency, the value of that wealth keeps appreciating. Between 2009 and 2012, the value of Bitcoin jumped from 10 cents to $1,200. This led to the emergence of millionaires across the globe. Coincidentally, these millionaires were people who ventured to take positions ahead of time mainly due to their technology instinct. Now, hear the poster boy story of Bitcoin: A Norwegian lad called Christopher invested $27 in Bitcoin and by 2012, the value of his investment networth was $8,086. As an IT guru, I can say that cryptocurrency is an idea whose time has come, nobody or force that can stop it. In several of my workshop on digital currency, I have often said very soon, commercial and central banks across the world will close shops, it may sound far too fetched. I have also predicted that within the next 15 years, commercial banks will be looking for what to do because of the technology called blockchain technology which is essentially a digital open ledger that tracks, verifies and validates transactions which essentially is what our CBN does. The digital open ledger what is driving cryptocurrency. You will agree with me today that the world is looking for more transparent means of payment and therefore what cryptocurrency seeks to do is that its takes away the middle man (who is the bank) from the banking transaction and makes individual their own bankers. By so doing, charges which drive the banking system were taken away. Whether the world likes it or not, businesses are looking for other means of transaction that is relatively cheap, instant and without charges at all and also because businesses are looking for means of storing assets that is relatively stable over a period over time that is not affected by any socio-political event. This is exactly what cryptocurrency does. You will agree with me that if I’m in a position of authority, my body language politically speaking can upturn the market. Just the fact that Trumpwon election, the American dollar went down; the Bitcoin which is the cryptocurrency went up in value by as much as 20 per cent within two days, because people started converting what they had into cryptocurrency, because they were not sure where the U.S. was going.
How does perception affects the value of a country’s currency?
I want to say first and foremost that money is what it is, but it is the perception that is given to it that matters. For example, N100 and $100 is the same money but with so much value difference. It take about three times more to produce the naira than the dollar because of the colours embedded in the production of the different currencies, but today the dollar has greater value than the naira. As Nigerians, if we can create enough perception and hope in our currency and people buy into it, the first thing that will happen is that the Nigerian currency will take a jump at least to a greater value. If there is a major threat to peace in the U.S. or anywhere in the world, the dollar will depreciate or go down, it is all about perception. That was exactly what happened to Brexit. The confidence that is put on a currency to some extent determines the value of that currency. On the other hand, the only thing that determines the value of cryptocurrency is the demand and supply dynamics. There are though many cryptocurrencies that have come out after Bitcoin, any cryptocurrency that essentially has a strategic marketing platform to boost demand and has confidence in it will rival the U.S. currency in the future as the world reserve currency, and this is Bitcoin. The driving force behind cryptocurrency is the blockchain technology. Any currency that government can make pronouncement and say print more, such a currency is subject to devaluation. Nigeria touts itself as having $34 billion in reserve, another country can say they have about $20billion in their reserves, but the question is: The U.S. authority can wake up tomorrow and say print more of that currency because they want to devalue their currency. Therefore, if tomorrow, America is not happy with country ‘Z’ and it found out that ‘Z’ has so much value in its USD, all that it needs to do is to devalue its currency. But this scenario is not obtainable in cryptocurrency, because what happens with cryptocurrency is that there is a finite amount of money that can be created. Why? This is because it is not under the control of any jurisdiction. Once that amount is tied together and the number of coins is hit, you cannot create more because no government determines its circulation.
Can the government or corporate bodies be part of this new wealth creating dynamics?
People have actually being asking this question: Can government be part of this digital currency? The truth about it is that cryptocurrency seeks to take away power from government and put it in the hands of citizens, individuals and businessmen. This is where the world is headed. With the way things are happening across the globe today, individuals are getting more influential than government; corporations are getting more powerful than government. For example, the CEO of Facebook, Mr. Mark Zukerberg, is becoming more powerful than some countries. What is evolving now will be a disruption in the next financial institution which is through cryptocurrency. Banks and other financial institutions should re-strategies on their business models or key into cryptocurrency or they risk being shipped out of the system.
How does this technology create money?
Technology is evolving daily to add value to life and to a greater measure cannot be regulated. This digital money/cryptocurrency technology which is block chain cannot be regulated because once it is regulated the whole essence of blockchain is defeated. Blockchain is an open ledger that cannot be hidden or regulated and it is the most secured means of payment and transactions. For example, you can spend N1000 note today in Abuja and within the next six months, it will pass through several hands and come back to you again, but you won’t know that it is the same money that was handed over to you some months ago. But with cryptocurrency, every coin that is mined in blockchain pools goes into mine coins. If for instance, I give you a coin now, you will give it to Mr. ‘B’ and ‘C’ and before you know it, any day that coin enters your hand, you can trace the history of all its transactions that it was used for before it came back to you. It is therefore easy to check the movement of the Bitcoin through the blockchain technology which is safe and secure.
How about the fear of systems or networks collapse?
The good thing about it is that there opportunities that exist in two folds. The first opportunity is to do a due diligence on any cryptocurrency that is presented to you based on the strategic marketing plans to first make it useable and acceptable. Once you have done that, convert part of your first money into cryptocurrency by making a stake. On conversion for instance of one-coin platform, what it does is that it offers you in different platforms like the one coin, ripple coin and on the one coin which I promote, there are different packages for potential investors to come onboard and take a chunk of it. It depends on how much money you can dispose of for now and the company has packaged in such a way that there is a generous reward for an early adaptor. For example, an investment of about N3million in cryptocurrency today will yield about N80million in a year’s time. What Nigerians should take advantage of is the fool proof security of the technology because most people that are rich today in the world are people that took position in technology companies. So, Bitcoin is a technology company offering the one-coin cryptocurrency which is an avenue for Nigerians to become millionaire in the nearest future in Euro. If for instance, you have children school fees to pay abroad, the quickest way to create the wealth that can sponsor that education of your children anywhere is to take advantage of this technology and this one happens to be it.
How can wealth be created for individuals through Bitcoin?
The way we are used to creating wealth in the past had gone, the traditional way of creating wealth is gone forever. It is awareness that is creating wealth for people now. If you are aware and know that this opportunity exist and you key into it, and any wealth that is tangible now is about value addition and not about production of goods and services anymore. Production of goods and services as a means of being wealthy is gone, though you can be rich, but in terms of being wealthy, you need to create values and what one-coin is doing basically now is first of all is the creation of merchant pools. The wealth creation is left to the company and what it does to create this wealth through actively marketing this opportunity all over the world as they are meeting businesses that will accept the coin, making it popular. If you go to YouTube, there are a lot of presentations on one coin and actively building the network. In Nigeria, there are relatively few of us have invested in one coin and this is just like Facebook. Most times I travel to educate people and I hold seminar every weekend and what we are doing right now is to basically educate people on digital currency.
The value creation for one coin is that it is actively building members in daily basis and about 8000 investors are coming in every day globally. Right now, there are about 2000 Nigerians on the network. What gives advantage is that for every new investment, coming at the early stage matters and so anybody coming now is coming in at that early stage because potentially one coin optimistic value is that it is going to reach Euro100 per coin in the next three years. If Nigerians really want to benefit from the wealth creation that one coin technology is doing this is the best time to come. Just like Facebook, one coin is building on the number of its investors. When I invested in one coin about four months ago, the number of investors were about 1.6 million people, today I have invested a lot of money on one coin business. The first benefit is because we are trying to maintain price stability. You cannot sell until it is a year’s time and this is for obvious reasons, because if you allow everybody to sell, the value of Bitcoin will crash when it is sold to everybody and so because of this restriction it will rise to about $1200.
Has this form of investment taken root in other climes?
Take for instance, when the Greeks started losing the values of their assets, luckily for them they stumbled on the useability of the Bitcoin and started converting what was left of their assets because the value of the money was going down and do what was left of their assets were converted to Bitcoin and that stabilised what they had individually. In Greece today, we can say they have internationalised their wealth or safe guarded the value of their assets because they have invested in Bitcoin and that is exactly what is happening all over the world. Once, you are able to move a certain value over your money into Bitcoin, you have already safeguarded tomorrow. I tell people that if we knew two years ago what was about to happen now, a lot of Nigerians would have gone to Bitcoin because if you have invested in Bitcoin, instead of your wealth going down, it will be going up. The best way for anybody to remain in safety net is to internationalise part of your assets by investing in cryptocurrency, convert part of your local money and leave it there as an investment until a year’s time.
How did you evolve from been an ICT practitioner to digital-money entrepreneur?
Well, first it is through sheer courage coupled with knowledge of the ICT terrain which is daily evolving. From my background I studied engineering in the University and after my National Youth Service Corps (NYSC), I got job with Vodacom as Satellite/Radio Communication engineer and later I moved to MTN as Switch-engineer. After acquiring enough experience and exposure I felt it was time to move on and add value to myself and impact on the society. So from MTN, I launched out to set up my two ICT firms: Awoof-Dey, an e-commerce shopping engine and Promosol. I’m still fully into Information Technology (IT) because of the evolving convergence of IT and telecommunications which is my background, I was able to venture into television infrastructure. One of the things that my company does is that we set up satellite television stations for other TV stations. I also set up an e-commerce platforms. I’m a strong believer in IT driving innovations. Today, Awoof-Dey, has gone into wholesale provision for smaller e-commerce companies. We leverage on our international connection to get good prices which has always been our dream out to smaller e-commerce companies. Today, with my varied knowledge of ICT I have ventured into making money online with the hope to build more entrepreneurs on how they can improve their well being through digital money making.