Denis Opudo
Bitcoin was first created in 2009 by the pseudonymous Satoshi Nakamoto who was later on revealed to be an Australian entrepreneur Craig Wright through a paper called Bitcoin: A Peer-to-Peer Electronic Cash System. Bitcoin is an electronic cash system which has become popular and more operational offering services where the normal currency is not much required. Bitcoin is free from government interference or central bank control as much as Japan has recommended it as its mode of payment; still, it features outside the regulatory space.
Trading at around $1,000 at the beginning of 2017, it broke through the $5,000 barrier for the first time in September 2017, before reaching a high of over $17,350 in December 2017. While the uptake of Bitcoin has to date largely taken place in developed economies, there is a strong argument for seeing it as a means of bringing real economic growth, as well as greater autonomy and financial democracy in many African states where the use of Bitcoin is now also on the rise.
In Africa, Bitcoin is used for some functions with a view that it can offer the real economic accessibility, democracy, and freedom to millions of people in a way that is impossible to the normal currency. One of the reasons for Bitcoin’s growing presence and importance in African states such as Nigeria, Kenya, and Ghana is that it facilitates fast and cost-effective remittance transfers which a significant number of individuals rely on. Given the speed and efficiency of the Bitcoin, money transfer is faster making it pocket-friendly to the user.
The process of transfers using bitcoins has also been made easier given the fact that it is now possible to sell bitcoins through an exchange and have the proceeds transferred to a PayPal account, while e-wallets like Skrill and Neteller can also be funded with bitcoins directly. The ability to transfer funds to PayPal or an e-wallet means that bitcoins have become a more applicable option for those with limited access to financial instruments to receive and access money.
Bitcoin is also becoming a tool for business in some African countries, such as Kenya, Nigeria, Uganda, and Tanzania, with locally based startups creating bitcoin-based lending platforms hence doing away with the need of banks and banking border to border transactions quicker and affordable. Through a combination of the bitcoin blockchain and mobile technology, it is now possible for African small business owners not only to gain investment from all over the world but also to be able to access these funds quickly through a mobile phone and using locally-based remittance platforms.
Most people are embracing the use of bitcoin as part and parcel of their daily lives. For example Pick n Pay, one of South Africa’s largest retail outlets are allowing customers to use bitcoin in its stores, while bitcoins can also be used in the country’s largest online marketplace, Bidorbuy. Nigerian e-commerce startup Shopnow.ng also accepts bitcoins and has a mobile app that also enables online shopping with bitcoins on the go.
Bitcoin marketplaces are being developed in Botswana, and it is expected that ATMs will be available in the country soon. Ghana is seeing new electronic payment systems being developed that accept bitcoins and other cryptocurrencies. Kenyan startups are advising new companies on how they can effectively employ blockchain technologies, while new remittance companies are rushing up in Nairobi with the aim of making B2B money transfers more affordable. New companies in Zimbabwe are developing their mobile wallets and bitcoin-based remittance services.
The indicated growth status accessibility of Bitcoin in Africa contribute to the number of exchanges that are now in operation for the trading of bitcoins. There are local companies, such as BitPaya, Luno, BitcoinFundi, ice3x, and NairaEx as well as international brands like BitStamp and Kraken, operating in this space which enable customers to buy and sell not only bitcoins but other cryptocurrencies as well, including Litecoin and Etheruem.
The reason for perceived acceptance of Bitcoin in Africa is the fact that it is unregulated by central banks and governments and so in a continent that is largely unbanked and whose various economies had too often been affected by inflation like Zimbabwe in 2008, Bitcoin is seen as providing an alternative solution to both.
