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How Bitcoin Mining Can Financially Empower Africans

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Bitcoin mining is the process where participants in the bitcoin network (called miners) contribute their computing power to verify and process transactions on the blockchain and are, in turn, rewarded in new bitcoins.

With fiat currencies, money is printed and distributed by a central bank. However, bitcoin does not have a central authority and new bitcoins are formed when miners solve complex algorithms making it a revolutionary way of issuing currency and incentivising people to help maintain the network.

Bitcoin mining has the potential to financially empower Africans as is evident from the story of Kenyan bitcoin miner, Eugene Mutai.

Kenyan Uses Bitcoin Mining to Improve his Financial Fortunes

Eugene Mutai’s journey offers a unique perspective on how bitcoin mining can be lucrative for Africans. If you were to walk into his apartment you would notice the phalanx of fans that are cooling his computers that are programmed to mine digital currencies each day without pause. He has relinquished a significant portion of his apartment for his cryptocurrency mining hardware. What makes Mutai’s case unusual is the fact that he is a high-school graduate with no formal training as a programmer or coder.

Even more interesting is until last year Eugene had not heard of bitcoin and cryptocurrencies. However, he was interested in technology and decided to borrow a friend’s Nokia Symbian S40, a non-smartphone that could download apps. During his free time away from agricultural labour and ferrying passengers on his motorcycle he taught himself the basics of HTML and CSS coding.

Unsatisfied with the meagre earnings from his odd jobs in the village and looking to improve the quality of his life, he decided to move to his uncle’s place in Nairobi. Fortunate for Mutai his uncle had a desktop computer and a Wi-Fi connection. The next four months would find him glued to the computer mastering the mysteries of code making his uncle concerned and at some point took away the computer.

Eventually, the learning paid off and he was able to land a job as a programmer. Soon he would become a tech consultant for a local startup incubator iHub and also work with the Nairobi County government. In the 2016 Git Awards, he was ranked as Kenya’s top software developer based on data from GitHub, a platform where coders store and share their work.

How can Bitcoin Mining be Rewarding for Africans?

Mutai’s mining runs six 1080 Ti graphics cards. The rig issues digital coins in the form of Zcash and LBRY credits. He plans to expand the mining operation by incorporating two more GPUs. However, for this to happen, he will need to upgrade the power supply to his apartment, which currently costs him $200 a month – far higher than that of average Nairobi households.

Bitcoin mining is essentially the process of adding transaction records onto the bitcoin blockchain.  Bitcoin nodes serve to validate transactions and thus eliminate the possibility of double spending.

For an individual block to be considered valid it must have a proof of work. The proof of work is verified by participating bitcoin nodes each time a block is received. Bitcoin utilises the hashcash proof of work function. Mining allows the bitcoin nodes to reach a secure-tamper resistant consensus and new bitcoins into the system. Miners are rewarded by being paid any transaction fees and a ‘subsidy’ for newly issued bitcoins.

Cryptocurrency as a Wealth Distribution Vehicle

Presently, Mutai works for Andela which focuses on training coders and engineers in Africa and linking them with opportunities in businesses. While Mutai has made the leap from an underprivileged background to the middle class, his sights are now set on further wealth augmentation through cryptocurrencies, which he can trade for fiat currencies or hold as an investment.

For Mutai cryptocurrencies are able to give ordinary people like him a level playing field in the global markets. In a Bloomberg interview, Mutai stated,

“The entire ecosystem could be the biggest wealth-distribution system ever [….] big players can’t deny anyone from participating in the financial system.”

Mutai’s entry into cryptocurrency mining could not have come at a more opportune time. The market capitalisation of the cryptocurrency market has increased exponentially from $17 billion at the beginning of the year to about $190 billion currently. The value of bitcoin has also increased six times over this year and by the time of writing this article, was trading at $6,200. Bitcoin is especially attractive in jurisdictions where they are capital restrictions, inflation and low access to financial services. A prime example would be Zimbabwe where a cash shortage has driven bitcoin prices beyond the global average, to over $12,000 at the local exchange as people rush to protect their savings.

Mutai views digital currencies as the better alternative to local fiat currencies that are prone to political shocks, something to note in Kenya, where the country has had two elections in three months that have negatively impacted businesses, amidst controversy over who is the rightful leader. In addition to being a cryptocurrency miner, Mutai is also taking time to research on ICO projects that are promising as he continues to grow his investment portfolio.

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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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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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