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“Bitcoin has huge potential in Africa.” – An Interview With BitHub Africa’s John Karanja

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Bithub Africa

On the 25th of August, I had the pleasure to interview BitHub Africa‘s founder John Karanja in his office in Nairobi. During our conversation, we discussed the potential and the challenges of bitcoin adoption in Kenya and Africa.

BitcoinAfrica.io: How do you see the current situation for bitcoin in Kenya and Africa in general?

John Karanja: I think bitcoin is still in the early stages, even beyond Africa. In Kenya, we see bitcoin adoption is mainly with speculators and traders who are buying and selling bitcoin to make money. Volumes have been growing over time. I think it’s about 10 million shillings weekly, which is around $100,000 traded every week on the peer-to-peer platform LocalBitcoins.com.

BitcoinAfrica.io: Is LocalBitcoins the main exchange used in Kenya?

John Karanja: Yes, it is. Bitcoin in Kenya is still are a very early stage. There are start-ups that have come and gone because it appears that bitcoin is not ready to scale amongst the average person here. Hence, it’s not going to compete with the mobile money system M-Pesa, for example, at least in the short term.

I think what we’re seeing is now more focus shifting to blockchain technology, being used in other use cases like identification systems, data storage or smart energy. We’re applying ourselves in these different areas to see which are the most viable and we will then launch our projects after doing so. In fact, we’ve produced a report on blockchain opportunities in Africa that goes into depth on that subject. The report, titled The African Blockchain Opportunity, was officially launched at the AITEC Summit in Nairobi on the 31st of August. The reason we produced the report is to provide the information about the potential opportunities that the blockchain technology is creating in Africa for entrepreneurs.

That’s where we are at the moment. We’ll probably launch our first project in early 2017 using the blockchain. So far, our work has primarily been focused on research and development here at BitHub.

BitcoinAfrica.io: To touch on the point you made about the move away from bitcoin to the blockchain. Do you think that, while the initial bitcoin in Africa story was remittance and supporting the underbanked population, there is a move away from that to a focus on the blockchain for commercial users as it very much is in the Western world now? 

BitHub AfricaJohn Karanja: I’d say they’d go in parallel because bitcoin has a lot of inherent advantages over any other secondary blockchain platform, in that it’s the most secure, it has the largest user base, it has a lot of liquidity and there’s money going in. But in terms of the user experience, it’s not quite mature yet. However, there are a lot of people working on improving that. So I think that will eventually be resolved but the technology is so disruptive that it can be applied to so many areas, some of which are fairly simple like storage of data, for many small enterprises getting cloud systems or complying with KYC. For these types of systems, the cost is often quite prohibitive. So what the blockchain can do is streamline that and open access to everyone. Identifying a customer, then also supplying him the products and enabling payment. So the blockchain can cover that whole process from start to finish. I see both bitcoin and the blockchain moving together.

BitcoinAfrica.io: Do you think bitcoin remittances will still be a growth market in Africa? One thing that you have now is there are so many low-cost remittances services, such as World Remit, TransferWise and CurrencyFair. Do you think that because of them, bitcoin for remittances is not going to be such a big growth market anymore as the cost of exchanging bitcoin back into local African currency can be quite high at times when using peer-to-peer exchanges as Citigroup pointed out in a recent research piece?

John Karanja: Bitcoin is not the clear winner yet when it comes to remittances. However, it is very much a possibility that it will be integrated into the background. For example, WorldRemit could end up using it for settlements, rather than pushing customers to use bitcoin. And we shouldn’t forget that there is still huge risk associated with bitcoin as its infrastructure is still relatively underdeveloped.

At the end of the day, it’s a protocol, it’s not an application. I don’t think anyone can say for sure bitcoin is dying or Bitcoin will succeed. But there’s also the possibility that we’ll see better technology rising very quickly and learning from what Bitcoin has been able to achieve.

BitcoinAfrica.io: Aside from Kenya, Nigeria, Ghana and South Africa, which country do you think will be the next African country to witness a reasonable rate of bitcoin adoption and the growth of a local bitcoin ecosystem?

John Karanja: I think those are the main countries. Possibly we could also see Rwanda because Rwanda has a very aggressive education platform that is aiming to leverage technology. I think that’s one country that’s usually left out, but it’s mostly those countries that have already advanced in terms of the internet and social media adoption. You can just look at Facebook statistics and see the countries where Facebook is heavily adopted. Those will be the likely next adopters of Bitcoin.

BitcoinAfrica.io: I read about how the telecoms giant Safaricom banned Bitcoin on their mobile money platform MPESA. Do you think that the “Safaricoms” in the other African countries will also try to hinder Bitcoin innovation to prevent their mobile payments systems from disruption?

John Karanja: That’s a good question. I’d say right now, ironically, more Bitcoin is traded using M-Pesa than ever before because of LocalBitcoins. They wouldn’t really be able to stomp it out but what they’d be able to do is restrict other centralized entities from using bitcoin as a platform to scale because obviously, they would be potential competition to them.

There may be room for telecoms innovating using bitcoin, but that would be very risky because bitcoin and other cryptocurrencies seem to work best in a peer-to-peer format because the risk is distributed as much as possible. If I’m sending you Bitcoin you send me M-Pesa, it’s just me and you. The counterparty risk is between me and you. It’s not in a centralized place that can get hacked. My guess would be that peer-to-peer platforms are where Bitcoin would dominate.

I don’t know if you saw the President signed the law that caps the interest rates at 14%?

BitcoinAfrica.io: Yes. I read that.

John Karanja: That’s the kind of situation that can now allow for bitcoin to triumph because the banks will not be too interested in micro-lending and may wish to partner with fintech solution providers to provide liquidity in that market segment. Therefore, people will now move more towards peer-to-peer or social lending platforms. I think in a peer-to-peer world bitcoin could dominate. The question is how simple can the peer-to-peer applications become? Because the peer-to-peer ecosystem is not really developed enough to be a safe and secure way to transact in digital currencies.

BitcoinAfrica.io: What are your thoughts on Ethereum and what do you think about ether from an investment point of view?

John Karanja: We did a study on it. It’s in the report. I believe Ethereum will have much more challenges than Bitcoin because they’ve used a high-level computer programming language called Solidity that essentially allows you to program ‘what if’ statement. But now, as they’ve realized from the Dao attack, by doing so that they opened so many vulnerabilities for attacks. For them to plug that, as a developer, I see that being more difficult than using a low-level platform like bitcoin where the rules are fixed. There are few rules and they are fixed. On the bitcoin platform, there’s no variation on what can happen. We know what can happen on that platform.

Ethereum, I would call ambitious but the advantage they have is they are secure. They have a good amount of miners behind the network. They’ve managed to attract enough interest in terms of safeguarding and keeping the platform that if they figure out their niche, it could advance blockchain technology even further.

BitcoinAfrica.io: My last question is about The African Blockchain Opportunity report that you have published. You mentioned it briefly earlier. Could you elaborate on it, please?

John Karanja: Essentially the whole idea behind the report is to provide a manual that anyone can pick up, whether it’s a developer, a bitcoin enthusiast or an entrepreneur and read up on areas of interest. It covers the technical aspects of bitcoin and the blockchain technology within an African context.

There are also a couple of chapters on fintech and we also have linked several developer resources. A developer can go and look at the source code and then try to either contribute or fork it and develop it as an application. We’re now going to be using that for our training curriculum. Then hopefully the idea is to have a second edition maybe in one or two years from now with updates.

Bithub Africa - The African Blockchain OpportunityBitcoinAfrica.io: Thank you for taking the time to conduct this interview.

If you want to find out more about BitHub Africa visit their website and if you would like to purchase the report The African Blockchain Opportunity click here or on the banner on the right. If you would like to reach out to John directly, you can find him on Twitter at @BitHubAfrica

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Paxful’s #BuiltwithBitcoin Initiative to Fund Rwanda Water Project and Afghan Scholarships

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Paxful Fund Rwanda Water Project

Peer-to-peer bitcoin exchange Paxful has announced a new development in its #BuiltWithBitcoin charitable initiative. The company is launching a Rwandan water tank project that will be spearheaded by AnthemGold, their new initiative member; additional classroom resources for the Rwandan nursery school that was built as the first #BuiltwithBitcoin project, and award more than $15,000 scholarships for female Afghan refugees to pursue their careers in the United States.

Paxful’s scholarship beneficiaries include Susan Naseri who is interested in non-profit work and law; Dunia Azizi, who will pursue a mathematics degree; and Farzana Nawabi, who is working towards a bachelor’s degree in nursing. The beneficiaries were chosen by Zam Zam – a non-profit organization partner for the program – based on the personal essays they wrote describing the hardships encountered while getting an education, migrating to the U.S. and blending into the American society while pursuing their careers and raising families.

Susan Naseri, one of the beneficiaries, said: “As a recipient of the Zam Zam Water scholarship, I’d like to express endless gratitude and appreciation to Paxful and everyone involved in the donation process. Receiving this scholarship is not only an immense honor and privilege; it also eases my financial stress significantly. I’m beyond humbled and thankful for this scholarship; thank you eternally for helping me expand my education and fulfill my dreams.”

Paxful Expansion and Partnership

Paxful Fund Rwanda Water ProjectFor the initial scholarship, winners were given $5,000 paid in two installments each of $2,500. Zam Zam Water will continue running the scholarship as an annual program. In addition, both Paxful and Zam Zam welcomed AnthemGold to the #BuiltwithBitcoin initiative after the virtual currency provider contributed enough bitcoin to construct a 35,000-liter water tank as well as fund the cultivation of more than 80 sustainable community gardens and 30 goats for two villages in Rwanda.

Speaking of the initiative, AnthemGold’s CEO, Anthem Hayek Blanchard said: “I am grateful to participate in a project that builds sustainable and essential projects for communities in need. We hope to use Zam Zam’s knowledge to provide people with the building blocks needed to foster and grow.”

Paxful’s announcement comes after its May announcement regarding its investment expansion in Africa by electing a new African Regional Director and building an incubation hub for blockchain technology in Lagos, Nigeria. The hub is expected to launch in the fourth quarter of 2018 and will be a co-working space that will provide services such as mentorship, advice on ICOs, and individual and corporate blockchain training. Paxful will also be sponsoring various crypto-focused events in Nigeria and plans to hold talks with similar events in Kenya, Ghana, and Cameroon.

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Crypto-Finance Platform Nebeus Enters the Africa Market

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Nebeus
Image by Nebeus

Cryptocurrency users in Kenya, Uganda, Tanzania, Rwanda, South Africa, Nigeria, and Ghana now have full access to the suite of Nebeus services. The “crypto bank” Nebeus enables users to buy and sell cryptocurrencies, enjoy remittance services, and access crypto-collateral loans, among many other services related to crypto-finance.

Opening access to Crypto-Finance services in Africa

Nebeus is a London-based fintech startup that runs a P2P exchange platform, offers crypto-collateral loans and incorporates a user-friendly bitcoin wallet. Nebeus was founded in 2014 with the aim of delivering a cheap, convenient and highly efficient service that catered to the demands and challenges of the evolving cryptocurrency landscape.

The crypto-finance platform will take advantage of local telcos and mobile money to penetrate these new markets, according to a company press release. Mobile banking has enabled African countries to leapfrog many developed nations by tapping into a previously unbanked segment of the population. The success of mobile money platforms, such as MPESA in Kenya, has attracted a number of fintech and blockchain companies to the African market.

The pay-in and pay-out corridors for the trading service include MPESA in Kenya, Airtel mobile money in Uganda, mobile money (Vodacom, Airtel, Tigo) for Tanzania, mobile money (MTN) Cameroon, Mobile Money (MTN) for Nigeria and MasterCard, Verve (Cards) and online banking for Nigeria. The established network of local payment partners will provide access to crypto-services for a population of over 400 million people.

Nebeus also aims to play a greater role in serving the African remittance market, which is estimated to receive billions of dollars annually. The company’s objective is to become the focal provider for this section of the African economy.

Alex Lempka, Nebeus’ Director of Communications, said: “Cryptocurrencies have a potential to make a significant impact on developing countries in many ways by providing a bridge into the global economy. Nebeus is looking forward to playing a major role in that by providing necessary infrastructure for all participants”.

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Golix Relaunches ICO and Expands Into Kenya, Uganda and South Africa

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Golix Launches ICO

Zimbabwe’s digital currency exchange, Golix is relaunching its token sale, which was planned for mid-May but abandoned after the Reserve Bank of Zimbabwe issued a cryptocurrency ban which was later overturned by the Harare High Court.

The exchange, which has been operational for three years, has also announced that it has launched its services in Kenya, South Africa, and Uganda as from Friday 1 June 2018.

“As part of our strategy starting from Friday 1 June, people in Kenya, South Africa, and Uganda will be able to start trading from Golix. This is one of our plans to be the leading exchange in Africa, which inspired by the vision to provide financial autonomy in the continent, ” said Golix’s Head of Growth, Panashe Tapera.

Out of 54 countries in Africa, only three have local cryptocurrency exchanges while the rest are still to realise the potential held by the blockchain technology.

Golix has set its target to avail its services across the entire African continent to address the cryptocurrency infrastructure shortage which has slowed down the adoption of digital currencies.

Golix Lead of Special Projects, William Chui, stated that the token sale was an initiative they set afoot to enable instant remittances and international payments through cryptocurrencies.

The Token Sale

“Since from onset our main agenda is to provide financial autonomy in Africa. The GLX token is going to be used to facilitate and realise this agenda. People from respective different countries will be able to buy the GLX token from the exchange using their fiat currencies. The GLX token will be used to buy other Altcoins in the exchange, all this will be done at zero transactions fee.

“The GLX token will also be used to facilitate remittances and international payments at lesser fees, compared to current banking methods. This cascade immensely towards contribution of GDP growth in African countries,” said Chui.

The GLX token, an Ethereum ERC20 token, will be available for purchase from Friday 1 June 2018 10 AM UTM/GMT on the Golix token sale website, tokensale.golix.com.

Potential buyers can use bitcoin (BTC) and ether (ETH) to buy the GLX token, which has been priced at $0.05612.

1,274,240, 097 tokens will be availed but only 637,120,049 are going to be sold during the token sale and the public will only be able to buy half of the tokens.

*Disclaimer: This post is informational only. Readers should do their own due diligence before taking any actions related to the mentioned company, product or service. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this article.*

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