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Meet Africa’s Blockchain Startups: BitPesa

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BitPesa

BitPesa is a bitcoin startup that is transforming how businesses make international payments in Sub-Saharan Africa. The Pan African platform uses blockchain technology to improve efficiencies in regard to remittances and trade between Africa and the rest of the world. The startup was founded in 2013 by Elizabeth Rossiello, a former investment banker with experience in Kenya’s microfinance sector.

Revolutionising remittances through Bitcoin

According to the 2014 World Bank report titled Send Money Africa, the average cost of remitting money to African economies stood at 11.89%, which was above the global average of 8.96%. At the time 70% of remittances to the continent were handled by money transfer services like Western Union and Money Gram, which charged 10-20% fee per transaction. Working in the Kenyan banking space, Rossiello noticed the need for an innovative payment system that could rival legacy systems being used which made money transfers expensive and slow due to the many intermediaries.

Against this backdrop, BitPesa was formed offering a platform that deployed the blockchain’s peer-to-peer network for payments and used bitcoin as a transaction currency. By offering a marketplace for African fiat currencies and bitcoin, the startup lowered transaction fees by 75% and reduced the transaction window from 2 weeks to 2 hours. In addition, the new payment solution was efficient and uncomplicated from an operational viewpoint as Rossiello pointed out in a Forbes podcast,

“The technology had to be easier, it had to be cheaper to set up, it had to be intuitive, and you didn’t need to maintain it yourself. So when you think about Bitcoin, right away when you start a company, if you learn about it and you have a developer that can link into it, you can just start. You don’t have to build the whole thing yourself. … [With BitPesa,] I do not need to invest in a million-dollar Oracle management information system.”

BitPesa makes it easier for people from other parts in the world to send money to say local banks in Kenya, by bypassing correspondent banks that charge a processing fee for transactions. These savings are passed down to the company customers in the form of cheap remittance fees. For people living in areas where traditional money transfer services like Western Union and MoneyGram have a monopoly on pricing through exclusivity agreements with postal corporations, BitPesa is a welcome respite.

Transforming B2B Payments

BitPesaBitPesa is not only using the bitcoin blockchain to enable cheap and fast international remittances but is also lowering the cost of B2B payments and opening new opportunities for African businesses. Through their platform, businesses can now send payments to employees, vendors, distributors and also receive payments from customers. Payments can be made or received from popular mobile money services, as well as transmitted to businesses bank accounts within a day. Many multinational corporations are already relying on their services to navigate the often unreliable and inefficient payment settlement systems that plague the African financial ecosystem.

BitPesa currently operates in Kenya, Uganda, Tanzania, DRC, Senegal, UK and Nigeria. Early this year, the company completed Series A funding to the tune of $2.5 million from a group of new and existing investors led by the US-based Draper VC. This raises the total funding it has received since 2013 to $6 million. Speaking to AppsAfrica , Rossiello asserted the money would be used to continue customer acquisition and growth efforts as well as migrate its headquarters to Luxembourg now that it is licensed as an FCA Authorised Payment Institution in the UK.

Africa provides a unique opportunity for bitcoin startups to thrive due to years of under-investment in infrastructure. Technologies such as bitcoin have the potential to improve financial systems and that’s why BitPesa is a prime example of what innovation can achieve in the continent.

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Bitcoin Wallet Luno Adds SegWit Support to Lower Transaction Fees

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Luno Adds SegWit Support

Luno, one of the most popular bitcoin wallets in Africa, has announced full SegWit integration for bitcoin send and receive transactions. Previously, Luno customers could only receive BTC through a legacy wallet address, which was not integrated with the recent Bitcoin blockchain upgrade SegWit. Only send transactions were SegWit compatible.

With the full integration of SegWit, Luno users can now enjoy cheaper and faster bitcoin transactions.

“By implementing SegWit internally, Luno has managed to reduce the send fees paid by customers by over 25% already. As customers start switching over to new SegWit addresses, this will translate into a further reduction in sending fees in the coming weeks and months,” Werner van Rooyen, head of marketing and communications at Luno stated.

Luno currently operates in South Africa, Nigeria, Malaysia, UK, and in 35 other European countries.

What is SegWit?

Segregated Witness (SegWit) was an upgrade to the Bitcoin blockchain that is intended to address Bitcoin’s scalability challenges as well as fix the issue of transaction malleability. With SegWit, signature data is separated from transaction data in order to enable more transactions to fit into each block. The signature data is kept in an extended block called the witness. As a result, bitcoin transactions become faster and transaction fees become lower.

In theory, the Bitcoin network can handle seven transactions per second. However, in reality, it is around four transactions per second. With the number of bitcoin transactions increasing as bitcoin’s popularity grows, transactions take longer as the unconfirmed transactions pool increases. Therefore, bitcoin users who can afford it have been paying higher transaction fees to incentivise miners to prioritise their transactions and, thereby, increase the speed of their transactions. At the end of 2017, this has led to the average bitcoin transaction fee spiking to over 35 dollars.

However, when SegWit addresses are used, bitcoin transactions become faster and the required resources decrease as well. Consequently, the transaction fees reduce.

How Can You Add a SegWit Wallet Address on Luno?

To add a SegWit address on the Luno wallet you have to follow these steps:

  • Open your Luno account either on the mobile app or the web app
  • Choose “wallets” from the menu
  • Click on your “BTC wallet”
  • Choose “receive bitcoin”
  • Click “add address” and follow the prompt

To receive bitcoin, use your SegWit bitcoin receive address. Legacy bitcoin addresses begin with 1 while SegWit bitcoin addresses begin with 3. Even after adding a SegWit wallet address, bitcoins sent to your previous legacy bitcoin address will still work. In addition, you can still send bitcoin from a SegWit wallet to a legacy wallet and vice versa since the transactions are still taking place on the same blockchain. But if you are sending bitcoins to and from a SegWit wallet, you can benefit from reduced fees.

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Bitmart Opens Cryptocurrency Mining Hardware Store in South Africa

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Bitmart Opens Cryptocurrency Mining Hardware Store

Bitmart, South Africa’s leading supplier of mining hardware, has opened a cryptocurrency mining hardware store in South Africa. This makes Bitmart’s retail outlet the first cryptocurrency mining store in Africa.

Products and Services Offered by Bitmart

Bitmart was founded by CEO Jacques Serfontein in 2015 to offer cryptocurrency mining hardware to South Africans. Currently, Bitmart offers GPU rigs, ASIC miners, GPU rig mining software, graphics cards, international mining rig monitor app, cryptomatic watches, hardware wallets, and motherboards. Customers can find GPU mining rigs that mine cryptocurrencies such as zcash, monero, decred, bitcoin, and litecoin.

Additionally, Bitmart provides services such as bitcoin mining farm design and deployment, mining training, antminer repair tickets, mining farm management using Genesis Hive, and shepherd services.

Through its shepherd services, Bitmart helps owners of second-hand miners to find buyers. Therefore, both sellers and buyers are assured of safe and secure transactions through Bitmart’s SSL-secured online shop.

According to MyBroadband, Bitmart is an authorised distributor of Avalon Miners, Genesis Hive, Trezor, Ledger wallets, KeepKey, and UniSat (satellite mining solutions) in Africa.

The company also supplies mining hardware to countries such as Japan, Dubai, North America, Australia, and England.

What Does Bitmart Plan for the Future?

Bitmart will be holding seminars in Johannesburg and Mbombela. The seminars will focus on bitcoin basics and advanced cryptocurrency trading. In addition, Bitmart will be introducing a satellite mining connection in partnership with Uniwisp that will allow mining rigs to mine from any place in the world. Uniwisp is an Internet service provider based in Nelspruit, South Africa.

 

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Kenya’s BitPesa Acquires Spanish Money Transfer Platform TransferZero

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BitPesa Acquires TransferZero

On February 8, 2018, BitPesa announced that it has acquired TransferZero, a Madrid-based online money transfer platform, which operates in over 200 countries using more than 50 currencies.

Why Did BitPesa Acquire TransferZero?

BitPesa, which is already operating in Africa and Europe, will be able to “set deep roots to UK and European licensing, bank accounts, and integrations” through this acquisition, according to the company’s statement on its blog.

“Europe is a hub for global remittance and payments companies. Digital currencies and decentralized technology have hit critical mass in the financial services and payments space. It is no longer a question of whether this technology will have staying power [but] which specific technology and what product iteration will launch and scale first […],” Elizabeth Rosiello, founder and CEO BitPesa said.

“BitPesa has the support of top-tier, institutional investors and a network that will help to bring TransferZero’s technology to the next level. With this support, we will be able to provide even more efficient transfers and user experience,” Luis Cambronero, former TransferZero CEO and present Managing Director, BitPesa stated.

Setting Up Infrastructure Across Europe and Africa is a Priority

“Setting up infrastructure across Europe and Africa has always been a focus of ours. […] We’ve just doubled our bank accounts, our infrastructure, and it’s licensed by the Bank of Spain as a payment institution. So we are fully compliant with PSD2 regulations […],” Rosiello said.

“This is truly a partnership where the whole is greater than the sum of the parts, allowing BitPesa to solidify our leadership in this space. By bringing our regional and technological expertise together, we will further accelerate our month-to-month growth,” Rossiello asserted.

TransferZero will neither change its name nor its headquarters. In addition, its employees will remain with Bitpesa.

This acquisition from an Africa-based bitcoin startup of a European fintech startup shows that leading African startups can make waves beyond the borders of the continent and create a positive impact on a global scale.

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