In the last decade, bitcoin and other cryptocurrencies (and their underlying blockchains) have teased eye-catching use cases for their technology, from non fungible tokens (NFTs) and decentralized finance (DeFi), to decentralized autonomous organizations (DAOs).
Despite their enthusiastic adoption around the globe, not everyone is convinced that cryptocurrencies are anything more than a dangerous fad (ask Jamie Dimon, Warren Buffet, Nassim Taleb, or the Chinese government). Central banks are happier to pursue their own digital currencies. And while Facebook, in its curious rebrand to Meta, hopes crypto will form a central role in its future success, FT columnist Jemima Kelly believes it will be as useless in the metaverse as it is right now in the real world.
“The hypocritical fantasy that underpins crypto also lies at the heart of the metaverse,” Kelly wrote. “This isn’t about building a decentralized paradise where everyone can prosper and live in harmony; this is about making a small group of people rich.”
That hasn’t stopped audacious attempts in emerging economies in Africa to make crypto and blockchain the norm for regular consumers. The latest example is Nestcoin, a Nigerian startup which launched today (Nov. 1).
Nestcoin wants crypto to stop being confusing
The adoption of cryptocurrencies has grown by 1,200% in Africa to $105 billion in market value in the last year alone, according to Chainalysis, a New York-based research firm.
Rather than be another marketplace for people to trade crypto, Nestcoin is setting up as a parent company that builds and invests in products that will introduce crypto’s evolving uses to novices.
As part of this effort, it aims to engage writers to explain complex crypto subjects such as DeFi, NFTs, DAOs, and more to consumers. It’s hoping that doing so will further encourage users to use its platform to make money, by playing games on a blockchain, and investing in digital art. Users will be able to trade high-value coins like bitcoin and ether within this one-stop shop. A user can decide to use one product without engaging with other ones.
Yele Bademosi, Nestcoin’s CEO and co-founder, says the work of its media arm is key to the company’s broader goal of increasing crypto adoption.
“The first problem you have to solve with crypto is making it easier to understand. You cannot use what you don’t understand,” he tells Quartz, citing a survey by crypto platform Luno that suggests 55% of Nigerians avoid crypto because they don’t know enough about it. (It’s 56% and 64% in South Africa and Kenya, respectively.)
Nestcoin’s pitch with a media service is not dissimilar to Mirror, a publishing platform created by former Andreesen Horowitz partner Deniz Nazarov, which uses the ethereum blockchain to help writers share expert knowledge and earn royalties in cryptocurrency. Some Nigerian writers publish crypto-related topics on Mirror, but the difference with Nestcoin’s version could be that articles are shorter and more consciously framed as introductions for the uninitiated.
Building crypto platforms is one side of Nestcoin
Bademosi is looking to two successful businesses to inspire Nestcoin’s growth: Digital Currency Group (DCG), an American company that creates crypto products and invests in crypto startups; and Bytedance, the Chinese owners of TikTok and other consumer internet companies. By creating products and investing in others, Bademosi says, DCG and Bytedance have deep expertise in their separate industries, in ways that would not be possible if they chose to build or invest but not do both.
Bademosi’s ambition for the company is grounded in his experience as a African tech entrepreneur.
Before Nestcoin, he started a crypto exchange called Bundle in 2019, giving up his chief executive position in July. (The startup remains active). For a year, he was the director for Binance’s venture capital program in Africa. He began his career in this sector as the founding partner of VC firm Microtraction, one of Nigeria’s most active investors in very early-stage startups, and remains active in its operations.
Nestcoin is part of a trend of African crypto infrastructure startups
One of Bademosi’s first investments with Microtraction was in Buycoins, a Nigerian startup that used to be just a crypto exchange platform, but has slowly evolved into a holding company for other crypto products called Helicarrier.
Helicarrier, at least for now, appears focused on creating financial products, while Nestcoin wants to dabble in NFTs and DAOs. But both companies are moving in a direction that suggests a new paradigm for what crypto companies should be in Africa, especially as regulators like the Central Bank of Nigeria crack down on crypto trading. That is, coin trading can’t be the only attraction for users.
While it launches with a Nigerian team, including a veteran digital bank product manager and a former business news editor, Nestcoin’s ambitions are continental. Yet Bademosi will need Nigerians, who are among the most enthusiastic crypto traders in the world, to get on board and drive the network effects that will scale his platform. He is confident that Nestcoin will be able to do so by providing “a more cohesive way to experience crypto.”
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