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3 Reasons Why Most Kenyans Are Still Hesitant About Investing in Bitcoin

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Most Kenyans Are Still Hesitant About Bitcoin

The value of one bitcoin currently stands at over $10,000, making it the largest and most valuable cryptocurrency in the world. According to bitcoin.com, 12,000 bitcoin transactions take place every hour and 80,000 bitcoin tweets are sent per day. These figures are an indicator of the extent of bitcoin’s popularity.

Kenya has a growing bitcoin community. Although small – compared to some of its international counterparts – it consists of bitcoin startups, regular meetups, a dedicated co-working space, investors, and enthusiasts. However, the majority of Kenyans are still hesitant when it comes to buying bitcoin as an investment for three main reasons. 

Zero Support from the Central Bank of Kenya

In December 2015, the Central Bank of Kenya (CBK) stated,

“Virtual currencies such as Bitcoin are not legal tender in Kenya and therefore no protection exists in the event that the platform that exchanges or holds the virtual currency fails or goes out of business.”

In an attempt to further dampen bitcoin adoption, the CBK instructed local banks from doing business with bitcoin startups. For example, the Kenyan bitcoin startup BitPesa was prevented from serving Kenyan customers. Elizabeth Rossiello, CEO of BitPesa, stated:

We have been working closely with the Nigerian Central Bank and have a great dialogue with other Central Banks in East, Central, and West Africa, but we have still made little progress in Kenya, which remains the strictest jurisdiction in Africa.”

Another bitcoin startup, Kipochi, sought support from the CBK and M-Pesa but little or none was given. As a result, Kipochi died in its infancy. In an article by one of the founders of Kipochi, Pelle Braendgaard details the challenges he faced trying to push bitcoin in Kenya.

Bitcoin’s Volatility

The value of one bitcoin has increased wildly since 2009 but with wild swings in both directions. For instance, the value of one Bitcoin in January 2017 was $1000. By June, the value had appreciated to $3,000 only to fall to $2,000 a month later. In September, the value rose to $5,000 then dropped to $3,200 a fortnight later. Currently, the value of one bitcoin is over $10,000. Thus, these fluctuations do not inspire confidence in conservative investors who prefer low volatility and steady price growth. 

Insecurity and Lack of Consumer Protection

Unfortunately, the world of digital currencies is full of scammers and hackers looking to get ahold of your bitcoin and there is no consumer protection for bitcoin users in Kenya.

The lack of regulations and consumer protection has even encouraged the pyramid scheme MMM to run its business in the country unperturbed. Consequently, until virtual currencies are regulated, Kenyans will continue to be wary of investing in bitcoin as many have been burned by bitcoin scams that are all too prevalent these days. 

Is There a Future for Bitcoin as an Investment in Kenya?

According to The Star Kenya, the CBK and the Capital Markets Authority (CMA) plans on discussing cryptocurrency regulation in early 2018.

“The joint financial specter regulators forum intends to meet in the first quarter of 2018 to review oversight of fintech solutions from a holistic perspective that covers all five subsectors in the financial market: banking, insurance, capital markets, pensions, and saccos,” says Luke Ombara, the director of the Capital Markets Authority. Ombara also said that digital currencies and distributed ledger technology will be reviewed under banking.

If Kenyan regulators issue cryptocurrency regulations or provide supportive guidance for the use of bitcoin, perhaps then more Kenyans will feel encouraged to invest in bitcoin and other digital currencies. 

Kenyans that want to learn more about bitcoin and blockchain technology can attend the Nairobi Bitcoin Meetup tomorrow at the Marble Arch Hotel.

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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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