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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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Zimcoin Launches New Cryptocurrency Exchange in Zimbabwe

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Zimbabwean blockchain technology company, Zimcoin, has launched a new digital currency exchange that will allow users to buy and sell bitcoin (BTC).

The Future of Zimcoin

Zimcoin hints at the possibility of much larger projects in the future with its bitcoin exchange acting as a gateway:

“At Zimcoin we want to provide Zimbabweans with access to the new decentralised internet. Bitcoin acts as a gateway to all the exciting projects happening in the cryptocurrency and blockchain world. Whether you want to engage with the prediction markets of Augur or invest in the Decentralised Autonomous Organisation Decree, Bitcoin is a great starting point. Here at Zimcoin, we provide a platform to buy and sell Bitcoin, as well as a place to find out about the blockchain projects we are excited about. So what are you waiting for? Sign up today and become a pioneer in Zimbabwe’s love affair with Blockchain.”

When Golix was operating in Zimbabwe they faced minor incidences of security breaches and scares. It seems that Zimcoin is learning from their mistakes and trying to avoid that from the start.

ZimcoinZimcoin has already implemented two-factor authentication from day one, unlike Golix which only implemented a few years after operating. With Zimcoin’s 2FA you are given two options; an email or using Google Authenticator. Though the email is less secure than Google authenticator, you do not have to download a separate application.

The exchange also logs out after a period of inactivity, which means incidents such as someone getting access to your computer because you’ve gone out are also unlikely as well.

The Challenges of Cryptocurrencies in Zimbabwe

Earlier this year, the Reserve Bank of Zimbabwe had classified operations by cryptocurrency exchanges as illegal in the country. This greatly affected Golix, Zimbabwe’s largest crypto exchange, despite them winning interim relief.

According to a report by TechZim, Zimcoin is not overly concerned by this ban and say that they had been in communication with the RBZ since last year and feel that they will be able to operate without any trouble.

Meanwhile, Zimbabwe is struggling with its economy, and as its foreign reserves dwindle, which will likely positively affect Zimcoin’s growth as more Zimbabweans start to look towards other currency alternatives. 

Despite all the challenges Zimbabwe faces with cryptocurrencies, the blockchain is gaining popularity in Zimbabwe. This is good news for companies like Zimcoin as they will hopefully face fewer problems than their predecessors.

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Bank of Zambia (BoZ) Warns Against Using Cryptocurrencies

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The Zambia central bank, Bank of Zambia (BoZ), has cautioned citizens about the use of digital currencies as they are not considered legal tender.

According to local media, the Bank of Zambia has received an increasing amount of inquiries about cryptocurrencies, which is a testament to the growing interest in bitcoin and its peers in the Southern African nation.

Bank of Zambia

The central bank highlighted that there is no legal recourse for cryptocurrency holders or investors who lose money in this new digital asset class due to its unregulated nature.

Additionally, the Bank of Zambia stated that it does not oversee, supervise nor regulate cryptographic currencies and assets and that any actions in related to cryptocurrencies are performed at the user’s own risk.

This statement echoes that of most African countries’ regulators when it comes to bitcoin regulations.

In most of Africa, central banks are taking a wait and see approach to blockchain technology and cryptocurrencies in an attempt not to stifle innovation.

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Binance Uganda Officially Launches and is Starting to Accept Deposits

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Binance Uganda
Images by Binance Uganda

In a statement on its website, Binance Uganda announced that is officially opening its doors on October 17, 2018, when it will start accepting deposits in Ugandan shillings (UGX), bitcoin (BTC) and ether (ETH).

Uganda’s First Local Fiat-to-Crypto Exchange

Binance Uganda is the first local fiat-to-crypto exchange in the East African nation and marks a milestone in Binance’s push into the African market.

Binance UgandaBinance Uganda users can now complete full account verification and are able to start depositing funds in UGX, BTC and ETH starting from 2018/10/17 10:00 AM Uganda Time (EAT).

The first available trading pairs on Binance Uganda will be BTC/UGX and ETH/UGX trading pairs. The start time for trading will be released in a later announcement.

Until the launch of Binance Uganda, local bitcoin investors had very limited options to convert their shillings into bitcoin or other digital assets and vice versa.

Peer-to-peer trading platforms such as LocalBitcoins and Paxful have failed to take off in Uganda and international exchanges do not accept Ugandan shillings as a currency, which has left Ugandans to largely trade via WhatsApp and Telegram on a peer-to-peer basis.

With the launch of Binance Uganda, it will be interesting to see how the local cryptocurrency community evolves and whether bitcoin and ether will be accepted as legitimate investment assets by the country’s wider investor base.

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