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I Got Paid In Bitcoin. Now What?

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paid in bitcoin

Bitcoin has proven to be a great liberator that can democratize and simplify the way we make payments and money transactions all over the world. Especially in Africa, it is a key piece of currency/technology that should be harnessed and propagated for the benefits of intra-African trade and a more unified market across the continent. Bitcoin is a great alternative currency devoid of discrimination and biases that Africans regularly experience from international banks, credit card companies as well as international payment providers.

The opportunities bitcoin provides are endless. Bitcoin can be employed to help create an economy and a society that is productive, progressive and provides opportunities for all without biases and unnecessary discrimination.

Low Merchant Adoption Rate of bitcoin in Africa

Bitcoin adoption by merchants in Africa has been slow due to:

Regulation: There is poor regulation in Africa where most countries take long to pass payment legislations and this has a negative impact on the economy of these countries.

Awareness/Misinformation: Bitcoin is not very popular in Africa and for the few who do, don’t know it’s benefits. 

Existing mobile money services: There is already’ M-pesa’ in place which is a mobile money service. It is very reliable and it might take a while before people adopt the whole bitcoin concept.

Cash is (still) king:  The use of credit cards is not very common in Africa as most transactions are done in cash. For this reason, it is hard to train people on online payments but people are slowly adopting.

paid in bitcoinWith the exception of South Africa (who’s regulators hold a very positive stance towards bitcoin), merchant adoption is close to zero in most of Africa. Hence, if you decide to receive payments for good and services you will need to convert your bitcoins into local currency. The good news is, that getting paid in bitcoin and then converting it into local currency can often be cheaper than the exuberant PayPal fees that many freelancers and online merchants have to face.

Converting bitcoin to local currency

If you want to convert bitcoin into local currency, get an exchange of bitcoin that will enable you to sell at a good price and preferably a local currency.

The following are the things to consider when selecting the exchange to use.

  • Does the exchange you have selected support the currency that you want?
  • What is the cost of the exchange?
  • How long does the fund transfer take?
  • Does the selling price make sense?
  • Check if the exchange is legit.

The most popular exchange that Africans use is the peer-to-peer exchange LocalBitcoins.com. In almost every African country, you will find people willing to buy and sell bitcoins using this marketplace. It is one of the leading bitcoin marketplaces in the world and uses a user rating system and escrow accounts to drastically reduce the risk of fraud or scams.

In Kenya, for example, Safaricom’s M-Pesa money transfer service is the most common means of exchanging bitcoin into the local currency via LocalBitcoins.com.

When getting paid in bitcoin makes sense

If you are running an e-commerce business, are a freelancer or are working remotely for an international company, it makes sense to accept payment in bitcoin if:

  1. The cost of converting your bitcoins into your local currency is less than PayPal’s or other online payment systems’ fees.
  2. If you regularly send money abroad and want to reduce remittance costs.
  3. If you believe the value of bitcoin will increase over time and you want to hold it as a long-term investment.

If any of the three before-mentioned reasons resonate with you then you should consider accepting payments in bitcoin.

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South African Online Payments Processor PayFast Drops Bitcoin

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PayFast Drops Bitcoin

South African online payment gateway PayFast will cease supporting bitcoin payments from July 20, 2019, due to high transaction fees and long confirmation times. The company expressed its frustrations through an announcement on its website.

Bitcoin’s Current Limitations

PayFastAlthough digital currency is meant to make online transactions cheaper, faster, and convenient, PayFast observed that bitcoin’s current limitations have made it difficult for the company to offer it as an alternative to traditional payment methods.

“Unfortunately, there are a number of limitations and design flaws unique to Bitcoin that make it an impractical substitute for cash, including high transaction fees and long confirmation times for buyers. We have tried various ways to mitigate these problems, but unfortunately, these issues are fundamental. The resultant poor user experience has led us to re-evaluate Bitcoin as a payment method on our platform and a decision has been taken to discontinue support for Bitcoin from midnight 20 July 2019,” PayFast explained.

The PayFast platform has a ten-minute window for the confirmation of bitcoin payments. However, the Bitcoin network has failed, in most cases, to confirm payments within this time period resulting in unsuccessful transactions. The Bitcoin network can currently not handle the volume of transactions it gets at a faster speed, PayFast noted.

Luno has been enabling bitcoin payments on the PayFast platform by acting as an intermediary. “To eliminate any risk posed by bitcoin’s price volatility, Luno locked the bitcoin to ZAR exchange rate for a ten-minute window. If the transaction was not sufficiently confirmed within ten minutes, the payment was unsuccessful and a refund would be due,” PayFast said.

The Bitcoin network can only handle seven transactions per second compared to VISA’s 24,000. This limits bitcoin’s usefulness as a means of exchange and an asset. Moreover, users making payments using bitcoin risk incurring non-refundable processing fees when the transaction fails.

Despite these challenges, the Lightning Network promises to improve bitcoin transactions by making them instant, low-cost, scalable, and acceptable across different platforms.

PayFast Remains Open to Cryptocurrency

PayFast hopes that as this space continues to grow, cryptocurrencies will be able to handle faster payments.

“We are eagerly following the developments of cryptocurrencies and the supporting technologies that are aiming to enable faster payments. As soon as these become workable alternatives, we look forward to supporting cryptocurrencies as a payment method in the future,” the South African company stated. 

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Is Egypt Finally Warming Up to Bitcoin?

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Egypt Warming Up to Bitcoin

A new banking law has given the Central Bank of Egypt (CBE) the right to ban the establishment, promotion or operation of platforms issuing or trading cryptocurrencies without acquiring the required licenses. However, this move suggests that the country is softening its stance on bitcoin as it enables crypto startups to operate under an official license.

The New Banking Law

Best Cryptocurrency to Invest inAccording to an unnamed official source that spoke to MENA news agency, CBE’s Board of Directors has the right to regulate cryptocurrencies and demand for multiple licenses under the new draft bill. The draft bill acknowledges the importance of financial technology, keeping pace with global banking changes, and leveraging modern technology to provide financial and banking services.

“The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions,” the source said.

Furthermore, these electronic means will have the same authenticity as original papers as long as they meet the set technical criteria, the source stated.

The new draft bill is not yet available for public reading.

Is Egypt Warming Up to Crypto?

In 2018, Egypt’s Grand Mufti Shawki Allam banned cryptocurrencies based on Islamic law that declared these currencies as potential threats to the current financial system and risky due to scams and extreme price fluctuations. Moreover, he disregarded cryptocurrencies, such as bitcoin, because they can be issued and used without the control of any governing authority.

The new law could be a sign that the country is warming up to cryptocurrencies as crypto firms continue to penetrate the North African market and as the CBE considers issuing a digital currency.

How easy or difficult it will be for crypto startups to register for licenses remains to be seen. However, it does signal a willingness by Egyptian authorities to talk with the industry as opposed to outright ban it as has been the case previously.

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Crypto.com Introduces Crypto Earn and Crypto Credit

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Crypto.com

Cryptocurrency platform Crypto.com has introduced Crypto Earn and Crypto Credit to enable users to earn interest on their coins and borrow by using digital currency as collateral.

Crypto Earn And Crypto Credit

Crypto Earn is a financial product that allows users to earn as much as eight percent per annum in interest on their cryptoasset holdings.

Crypto.comTo do this, users deposit digital assets into Crypto Earn through the Crypto.com app and then begin accumulating interest each day through their preferred cryptocurrency. To get started with Crypto Earn, users will have bitcoin, Paxos, and TrueUSD to choose from, according to a company press release.

Crypto.com is offering users two fixed periods namely one-month and three-month terms to earn interest on digital assets. The company will soon provide users with a flexible holding term. With Crypto Earn, you can also withdraw and deposit coins at no fees and spend what you earn.

Crypto Credit gives users instant loans with bitcoin as collateral. Users are free from fixed repayment schedules, monthly fees, payment deadlines, and late fees which financial institutions such as banks often impose. Users, therefore, enjoy a flexible repayment schedule in the twelve months from the beginning of the credit term.

Furthermore, users owning MCO tokens staked in the app receive a special rate of eight percent per annum. Users can use their loans to buy more cryptocurrencies on the app or they can spend it on the MCO Visa Card with cash back of up to five percent.

Other benefits of using Crypto Credit are that you do not require credit checks and that you can get the credit limit you want.

“Crypto Earn offers the most attractive interest rates in the market today. With the MCO Visa Card and Crypto Credit, we are uniquely positioned to do it while maintaining sustainable unit economics. MCO Visa Card, Crypto Earn, and Crypto Credit together form a powerful product suite that nobody else in the industry has today. We have never been more excited about the potential of our platform and look forward to continue scaling it globally later this year,” said Kris Marszalek, co-founder and CEO of Crypto.com.

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