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Why is Africa Slow to Adopt Bitcoin?

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Africa Slow to Adopt Bitcoin

With 54 countries in one continent, the adoption and integration of bitcoin in Africa will and continues to happen at different tempos. Although bitcoin has shown massive potential globally, its uptake in most parts of Africa has been and continues to be slow.

For bitcoin to experience massive adoption in Africa, co-founder and CEO of Regenize, a South African startup, Chad Robertson, believes that educating people on how bitcoin works is the key.

Regenize aims to motivate people to recycle things and in exchange they get rewarded with virtual currency that they can use to purchase various goods. The recycling services are monthly and come at a fee. Customers are then rewarded with the virtual currency that they can use on Regenize’s mobile voucher platform.

Since Regenize’s launch in 2016, the startup has had a positive impact on the people of South Africa. Still, Robertson firmly believes that different industries will influence the uptake of digital currencies.

In an interview with Disrupt Africa, he is quoted as saying,

“Using bitcoin as a means of purchasing everyday goods will be determined by the adoption rate of your larger retailers. However, for the financial services sector it has a high uptake due to reduction of costs when transferring bitcoin.”

Factors Hindering the Adoption of Bitcoin in Africa

According to Robertson, several factors make the adoption of bitcoin and other virtual currencies slow in Africa.

Education and Awareness

In his view, education and awareness are mandatory if bitcoin is to scale in Africa.

“Specifically, in South Africa, we have such a huge gap that keeps on growing regarding wealth but also knowledge on the ever-changing tech landscape. If I’m sitting in a coffee shop in the CBD, it’s quite likely someone will know what bitcoin is. However, head down to the Cape Flats or townships, and it’s highly unlikely that there’ll be many people who are aware of this,” he went on to say.

“However, this lack of education and awareness could be drilled down further on to find the root cause. There are too many people living in poverty in South Africa and Africa. They simply cannot think about using bitcoin as it’s not relevant to their needs. The local spaza shop does not accept bitcoin so how will someone get their bread or milk? Schools don’t accept it for school fees. You cannot buy electricity with bitcoin to keep your lights on. So why would they care or want to be educated on it?” he asked.

In Robertson’s view, there is need to develop solutions that work for everyone and not just the minority if bitcoin and other digital currencies are to have significant momentum.

“If you look at the available places one can spend bitcoin in South Africa, it makes sense why it’s the minority who’s focused on it,” he added.

Security and Visibility

Another factor that needs to be addressed before digital currencies can be fully adopted is security which ties back to education.

“There are many people who have been scammed on the internet, especially those who are digitally uneducated. Therefore, there is a fear and a stigma around using the internet as a place to transact,” stated Robertson.

On the other hand, Africans are used to the normal brick and mortar institutions where they can go and make their inquiries. Digital currencies are decentralized and lack visibility hence raising certain questions.

Robertson said, “With bitcoin, there’s no visible place to lay a complaint or an enquiry. I would think change management would play a large role in the transition from using a bank. For generations, people have given their money to the bank and there’s a trust as the bank is a brick and mortar institution. With bitcoin, people might have fears of what happens to my money? Who do I complain to?”

According to him, for more African nations to come on board, the focus shouldn’t be on change but on the people and their needs.

Smartphones and Data Access

The founder of the South African startup, The Sun Exchange, Abraham Cambridge, believes that the most basic hindrance to bitcoin adoption is access to data and smartphone adoption since bitcoin transactions rely on internet access. The Sun Exchange uses bitcoin to crowdfund for solar projects.

“Feature phones don’t really cut it, but it is just a matter of time. With smartphones getting cheaper every day, soon anyone in Africa will be able to use bitcoin services where data is available,” Cambridge said.

“To help reach this point, at The Sun Exchange we are developing hybrid solar/data access projects with cryptomines embedded into the infrastructure. This will ensure that remote villages get energy, communications and their own digital currency money supplies in one fell swoop.”

Despite these setbacks, Cambridge’s optimism on the future of the blockchain technology is significantly high.

“This stuff is just getting started. Think global, free to use, secure computer systems‎ that run autonomous businesses, data storage, and energy transfer. Whole governments will be running on blockchain applications. The UAE city of Dubai has already set a target of being 100 percent running on blockchain by 2020 so we are really not far from this world,” he noted.

“Smart contracts running on self-driving cars that ‘bid’ for their position in traffic is just one of many incredible ideas I have come across that will change every aspect of our civilization.”

Although Africa is slow to the adoption of bitcoin or any other digital currency for that matter, countries like Kenya, Nigeria, and South Africa are already a step ahead. Moreover, the University of Cape Town in Windhoek, Namibia is set to be the first in Africa to offer a postgraduate degree that teaches about bitcoin come January 2018.

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Online Retailer Newegg Now Accepts Bitcoin in Kenya, Nigeria, South Africa, Tanzania, and Uganda

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Bitcoin Accepted

Online retailer Newegg has expanded its bitcoin acceptance to 73 countries, including Kenya, Nigeria, South Africa, Tanzania, and Uganda.

Newegg and BitPay Partnership

NeweggNewegg has been collaborating with BitPay since 2014 to facilitate bitcoin payments in the US and Canada. “Since this initial implementation, not a single chargeback has been required for any bitcoin transaction on Newegg. The companies now build on this successful collaboration by extending the bitcoin payment option to the 73 new countries announced today,” an official statement said.

BitPay processes bitcoin transactions worth more than $1 billion yearly for its e-commerce partners. The bitcoin payments company uses blockchain technology to offer transparent transactions and to eliminate chargebacks. BitPay also “enables Newegg to increase its margin on each bitcoin transaction by avoiding credit card fees typically assessed on credit card purchases.”

Anthony Chow, Newegg’s president global sales, said: “Five years ago, we were one of the first major online shopping destinations to accept Bitcoin, and our early-adopter customers were quick to embrace this new payment option. Broadening the ability to pay with bitcoin to the majority of our global network underscores our commitment to bring innovation to the online shopping experience, and answers customers’ growing preference for our bitcoin payment option.”

Newegg sells products such as electronics, gaming equipment, and smart home appliances to over 38 million registered users in North America, Latin America, the Middle East, Europe, and the Asia Pacific.

Buying Products with Bitcoin

Buying items on Newegg with bitcoin is simple. Like with other online shopping processes, you add your items to a cart and select the shipping address of your choice. Once you do this, you proceed to choose bitcoin as the payment option of your choice, review your order, and then pay using BTC. Newegg allows users to pay using computer-based, web-based, or smartphone-based digital wallets.

While South African payments service PayFast recently dropped bitcoin, Newegg is extending this payment option to more people across the globe, highlighting the benefit of using a borderless, decentralised digital currency to shop online.

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How Popular is Bitcoin Gambling in South Africa?

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Bitcoin Gambling in South Africa

Ever since bitcoin launched in 2009, it has had a tremendous impact on many different industries, including online gambling. Having a reliable and secure payment method is imperative in order to have a worthwhile gambling experience, no matter which forms of betting you subscribe to.

When online gambling websites began accepting bitcoin, players all over the world had the ability to make quick and easy payments, while also maintaining privacy. In a sense, bitcoin (and the cryptocurrencies that followed) started a revolution in the online payment sphere and its impact has been felt all over the world.

One country that has significantly enjoyed the benefits of bitcoin is South Africa. South African gamblers are becoming ever more fond of cryptocurrencies and bitcoin ranks among the most-used.

Bitcoin’s Popularity in South Africa

Before we can explore the prominence of bitcoin gambling, we first have to take a look at how well cryptocurrencies are received in the country.

While bitcoin is popular all over the world, it is especially liked in developing countries. Nowhere is the previous statement more true than in South Africa. In a recent study, researchers found that bitcoin ownership in South Africa exceeds the world average by two times. It is estimated that 5.5 percent of the global population owns cryptocurrency, while in South Africa 10.7 percent hold a crypto balance. In the previous year, crypto transfers have increased by 25 percent in South Africa in a trend that seems to have swept over the entire continent.

This Calvin Ayre opinion shows that the transactions are used for both financial and recreational purposes, meaning that cryptocurrencies including bitcoin are becoming a part of everyday life. As one can imagine, recreation can also cover online gambling and there is a rising number of people using bitcoin to place bets on their favorite casino games or sporting events.

The Dark Side of Bitcoin Gambling in South Africa

bitcoin gambling in South AfricaCryptocurrencies are becoming increasingly more popular in South Africa. However, one thing that many overlook is that bitcoin and altcoins are not regulated by any government authority. Effectively, bitcoin is not recognised as a legitimate and official transaction solution. So how does this affect the online gambling scene?

Аnother article about bitcoin for gaming shows that crypto gambling in South Africa is illegal due to lack of regulations from the appropriate authorities. Any South African players engaging in bitcoin gambling is doing so at their own risk and no government institution can step in to assist them in case of fraud. That is not to say that all gambling operations accepting bitcoin from South Africans are fraudulent, but there are no fail-safes and no measures in place to protect users.

So far, the South African government has been slow in implementing some if any regulations to ensure the rights of online players and the safety of any crypto enthusiasts.

Of course, this does not even begin to tackle the problem of regulating bitcoin and cryptocurrencies in general. The added anonymity features and the lack of centralised supervision make crypto hard to regulate.

Moreover, identifying the owner of a wallet is downright impossible without cooperation from other parties. This does not account for the fact that crypto users are developing additional measures to protect their anonymity when using their currency of choice, e.g. hardware wallets or dispersing their funds across multiple wallets.

Future of Bitcoin Gambling in South Africa

It is clear that the South African gambling scene is ripe for further implementation of bitcoin and blockchain technology. However, slow actions on the government’s side will likely stall any potential progress and leave all bitcoin gambling operations in a legal gray area, at best.

Unless regulators take a more proactive approach, it is unlikely that any significant developments will be made in the near future, putting thousands of gamblers at risk.

Naturally, placing the safety of its citizens should be the South African government’s first priority and ensuring that no fraudulent operation remains active for long.

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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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