The price of bitcoin is currently retailing at over $7,700 across international exchange platforms. However, this is not the case in Zimbabwe.
The price of bitcoin in the African country has skyrocketed to about $14,000 as reported by Golix, the Zimbabwe-based bitcoin exchange. The increased demand for the cryptocurrency in the southern Africa country has highlighted the volatile nature of bitcoin as well as the current economic crisis Zimbabwe is facing.
In an interview with CNN, Yeukai Kusangaya, Golix’s trade coordinator said, “The price has been high for some time and it keeps going up.” She believes that the increased demand will continue to drive the price to higher levels.
Bitcoin has for a while now been used in Zimbabwe by car dealers and other import/export businesses who need to conduct high-value transactions in a country where there is a severe cash shortage.
Worthless Zimbabwean Bond Notes
As it stands, Zimbabwe is undergoing a fresh currency distress. However, this is not the first time that the nation is finding itself in such murky waters.
After the 2008 hyperinflation, President Robert Mugabe’s government was forced to adopt the US dollar as its own currency. Now, years later, the southern Africa nation finds itself in the same place it was in nine years ago. This has led to rationed withdrawals from the banks which are now facing a severe shortage of the US dollars.
In a bid to salvage the situation, the government began issuing “bond notes” that were said to have the same value as the US dollar in late 2016. However, the value of the quasi-currency dropped drastically on black market exchanges which led to increased prices in stores and that they are not accepted by foreign suppliers.
The Zimbabwe Independent newspaper reported a few weeks ago that the, “debilitating liquidity crunch and an acute cash shortage has severely crippled companies which need to import critical inputs for operations.”
International trade has also been affected leaving importers to turn to digital currencies as a way out for them.
Since the increased demand for bitcoin in Zimbabwe, several newspapers have gone ahead to write about it with The National newspaper from the Middle East summing it up the other day as, “This time (in Zimbabwe) the issue is not too much money — it is that there is too little. Because the reserve bank cannot print U.S. dollars itself — the U.S. alone can do that — it must rely on imported cash.”
Bitcoin as a Haven
Bitcoin, which is considered as a speculative investment and a volatile digital currency by investors, has now become a haven for most Zimbabweans offering a degree of financial security against hyperinflation.
“Bitcoin isn’t subject to the central bank measures so it has become an alternative that importers are willing to pay a premium for,” said Nigel Gambanga, a Zimbabwean technology analyst, citing increased businesses that are accepting the currency as payment.
Director of research at news site CoinDesk, Nolan Bauerle, said, “When confidence in national currencies wavers because of monetary policy or political uncertainty, bitcoin often behaves as a safe haven because the price is totally based on market discovery.”
“Some people find bitcoin useful because it is immune from the bright ideas of centralised authorities and their unintended consequences,” he went on to add.
Favorable Conditions for the Adoption of Bitcoin
The growing adoption of bitcoin in Zimbabwe has been an interesting phenomenon among African countries due to the country’s financial history. It is, therefore, not surprising that bitcoin has now emerged as a viable alternative form of currency for its citizens leading to an aggressive surge in demand for the cryptocurrency.
Although Zimbabwe’s case is unique, cryptocurrency experts believe its use in the country can be a good test for bitcoin’s feasibility on a national level.
“The underlying takeaway is that cryptocurrencies are here to stay and have a place in the world where monetary policy and fiat currencies cannot be trusted,” said Kay Van-Petersen, Saxo Bank analyst.
“It’s only a matter of time before an emerging or frontier market government decides to adopt a cryptocurrency as a foundation for credibility, transparency, accountability, and attraction of foreign capital.”
Will Bitcoin Survive?
Digital currency experts believe that the market could come under pressure should the price of bitcoin continue to increase. The price surge also comes at a time when President Robert Mugabe and his family have been put under house arrest as the Zimbabwean military has taken over power.
“I wouldn’t expect any tolerance from a country with a fragile financial system trying to maintain capital controls,” said Hileman, hinting that the government of Zimbabwe might ban bitcoin exchanges like China did.
The key question by Hileman is on whether the southern Africa nation has the capability to impose such a ban, which could potentially have negative effects on its economic future.
On the other hand, there is the thought that the government could embrace the use of bitcoin and maximise it.
“If trade in bitcoin intensifies with no resolution to the country’s currency woes, we could witness the central bank and government revise its position by taking on a more active role in cryptocurrency trading. At the very least, (by) recognizing cryptocurrencies through some form of regulation,” Gambanga stated.
According to Gambanga, bitcoin has the potential of becoming the official currency in Zimbabwe. “The state has already taken extreme measures like banning the importation of fruits. So, adding bitcoin to the country’s multi-currency basket might not be so absurd.”
How Often Is Crypto Really Used In Illegal Activity?
Statistics, examples, and ways to legally use cryptocurrency
October 1, 2013, was a turbulent day for San Francisco Public Library. A dozen FBI agents pretending to be usual visitors surrounded a man sitting at one of the tables, took his laptop and put a pair of handcuffs on his hands. That man was Ross Ulbricht, founder of Silk Road – the largest darknet marketplace for drug dealers, killers, and other criminals. The seizure of Ulbricht was supposed to tackle the illegal online trade, but, as the news site DeepDotWeb wrote, the bust was “the best advertising the darknet markets could have hoped for”. The reputation of cryptocurrency also suffers from associations with terrorists, who sometimes use it for their needs. How big is the real scale of the problem? And how many legal ways to use crypto exist? ChangeNOW has dived into the topic – and suggests you an overview of the current state of the problem.
- The drugs trade volume using cryptocurrency is relatively large
- Crypto was a significant reason why a part of drug sales migrated to the web, though stays yet not viable and anonymous enough for dealers (same as for terrorists)
- As efficient use of blockchain technology requires good infrastructure, crypto remains not suitable enough for many terrorist groups
- However, some terrorists are trying to adjust to anonymity threats and hold fundraising in crypto
- Legal ways to use cryptocurrency include dozens and vary from IT services to car rentals
Crypto & Drugs & Rock’n’Roll
The total volume of the online drug market using cryptocurrency is around $1 billion. It is located in the darknet, which provides an attractive, profitable, and mostly secure environment for drug dealers. Cryptocurrency, in turn, allows making payments that are hard to be tracked by authorities. This is how blockchain technology has helped to bring a big part of drug sales online from the streets. And it’s not only about drugs themselves – many legal opioid drugs are illegally sold here, too.
However, cryptocurrency is not always as secure and anonymous as it is thought to be. The information about any transaction ever made stays forever in the blockchain, which makes the system way more transparent than cash payments. This is a significant limitation for using crypto in illegal purposes.
According to the University of Technology Sydney, about 46% of criminal activity of each year is connected to Bitcoin. As for the drug sale itself, trade volumes in crypto keep rising, but the percent of Bitcoin drug transactions out of all transactions goes down. This means Bitcoin is more frequently used for legitimate purposes.
What cryptocurrency is used for drug sales most often? Surprisingly, privacy coins such as Monero are used only for 4% of transactions. Due to its pioneer position, Bitcoin is used in 76% of all deals despite all its anonymity risks.
The main problem for drug dealers using crypto is to turn their income into cash. This move remains complicated and insecure. Most cryptocurrency exchanges have instruments to define whether a transaction is coming from a suspicious source like the darknet. The rise of Monero use in the online drug market will hinder such tracking. However, for the reasons listed above, crypto is unlikely to completely replace regular cash in drug sales in the foreseeable future.
The views on how much cryptocurrency is used and will be used by terrorists vary widely. While some claim that terrorists have no infrastructure to use it and the methods are not secure enough, others argue that they are learning fast and adjust to crypto rapidly. Let’s see what both sides say.
Not actively using, unclear future
Lack of appropriate infrastructure, inability to use crypto. Most terrorist groups settle in the Middle East region, especially on its remote and war-torn territories. The vast majority of roads and technological infrastructure have been destroyed. In such circumstances, cash remains the most common and convenient way to pay and fundraise. Imagine a gun seller in a Syrian village – does it look like he has a tool to accept Monero?
Anonymity threats. Given the relative transparency of blockchain mentioned above, crypto might remain too unsafe for terrorists. Miners can see any potential terrorist money exchange while checking transactions, and it’s not too hard to see who sends them money. It can change with the rising use rate of privacy coins, but the ability to spend such money remains questionable.
Increased attention to crypto by the authorities. As the number of transactions keeps rising, more regulatory bodies’ attention gets focused on cryptocurrency, which apparently makes terrorists nervous and cautious.
Problems of specific currencies. While top cryptocurrencies like Bitcoin receive much regulatory attention, others remain marginal and unreliable because of a lack of support. Conflicts and uncertainty lower the trust to such cryptocurrencies – yes, even terrorists’ trust.
Using actively now, increasingly in the future
Terrorists seem to be rapidly learning to escape from tracking in blockchain. Several years ago it was easy to find any address or transaction made for a terrorists’ fundraiser. Today they use well organized and finely designed websites, where detailed video tutorials show how to donate money anonymously. Unique Bitcoin addresses and other crypto tricks are used to preserve security. Analysts from intelligence services claim there’s only going to be more such cases. And, of course, privacy coins are a “great opportunity” for terrorists too.
Shift to cryptocurrency is a reaction to economic sanctions. ISIS has lost most of its territory and resources, Hamas has been sanctioned by the West. Having been cut off from all main financial institutes, terrorist groups had to find other pathways for their financial activities – and cryptocurrency appeared to be the best substitute.
There might be difficulties and inconveniences, and the number of terrorists using crypto is yet unknown – but as we can see, digital money in terrorism is reality. Same as in drugs. And this is what cryptocurrency is notorious for, lacking trust among millions of people. The reputation of some of the exchange services only adds to this mistrust – ChangeNOW has carried out a special investigation on how such platforms may cheat their clients. But can you buy anything besides heroin and firearms with your crypto? What about pizza or a concert ticket?
Only Antarctica left
Cryptwerk, a platform monitoring actual use cases of different cryptocurrencies, says there are about 3500 ways to spend Bitcoin and more than 800 for Monero today. They range from music services to car rentals, from buying clothes to hotel booking services, and from sports bets to virtual tours.
Organizations accepting cryptocurrency are located on all continents besides Antarctica (what could be a better place for crypto than a continent without governments and countries though?). Mostly, in the USA and Central Europe. Bitcoin as the largest cryptocurrency is relatively widespread in India and Southeast Asia.
As this is a whole another topic, ChangeNOW will issue a post dedicated to use cases of cryptocurrencies. As it will be more detailed, who knows – maybe you’ll find a pizza right by that you could pay for from your crypto wallet!
This article was contributed by Jeremy from ChangeNow.
Buroka Review: How to Buy Bitcoin on Nigeria’s Newest Bitcoin Exchange
Buroka is a new breed of cryptocurrency exchange for Africa! Currently operating in Nigeria, Buroka was designed to fulfill the needs of modern Africans. Buroka allows customers to buy and sell Bitcoin with Naira via Local Transfers and cash deposits at the bank. In this Buroka review, you will learn more about the exchange and how you can use it to buy bitcoin in Nigeria.
How to Buy Bitcoin on Buroka
Step 1: Account Creation
To create an account, visit Buroka.com and hit the “Register” button. This will lead you to a page where you will be asked to fill in your personal information, including your name, email address, and password. Like any other serious exchange, Boruka will ask you for your ID, Proof of Address, and to take a selfie with your ID to eliminate fraud.
Step 2: Fund Your Account
Funding your account on the platform is straightforward. You can deposit either via bank transfer or at any bank branch. Make sure to use a unique reference code given to you by Buroka deposit system.
Step 3: Buying and Selling BTC
Once your deposit has been credited to your account you can immediately buy your Bitcoin. The buying and selling tab is located on the top right corner of the dashboard. There you can input the amount of bitcoin you want to buy. Once you do that, you then click on the “BUY BTC” button.
Step 4: Storing Your BTC
After buying BTC, Buroka provides users with the option of either storing bitcoin on the platform in a BitGo wallet or any other wallet of their choice.
Currently, Buroka only supports bitcoin (BTC). However, the exchange plans to include other cryptocurrencies going forward.
Buroka exchange makes use of Two-Factor Authentication (2FA). 2FA provides an extra layer of protection for users. With the 2FA in place, an extra piece of information is needed before login into the platform or making any withdrawals.
In addition, Buroka’s platform is also protected using the latest security technology, including web-socket and API protocols that allow for a fast and secure order processing. Buroka also makes use of a well-updated SSL certificate, which makes it easy to detect a phishing attempt.
To further ensure that clients’ funds are secure, Buroka operates segregated accounts. These accounts are held with trusted banks so that clients can enjoy an extra layer of security provided by the banking system.
Buroka is a relatively new Bitcoin exchange with a well-designed, user-friendly interface. The Bitcoin trading platform provides several deposit options, which is attractive for Nigerian Bitcoin traders, as well as competitive market rates for both buyers and sellers.
If you are looking to buy or sell bitcoin in Nigeria, you can give Buroka a try.
3 Reasons to Use a Bitcoin Mixer in 2020
Bitcoin is not as anonymous as people think. Bitcoin transactions are viewable on the network’s public blockchain, which also means that transactions can be linked to real-world identities. As a result, bitcoin is not (yet) fungible and does not protect individuals’ financial sovereignty as much as it should. Fortunately, there is something called a bitcoin mixer that enables bitcoin users to increase their financial privacy.
In this guide, you will learn what bitcoin mixers are and why you should consider using them.
How Anonymous Are Regular Bitcoin Transactions?
Regular bitcoin transactions are not anonymous. Bitcoin addresses are pseudonymous. They do not reveal your identity as a user but can be linked to your identity.
For instance, most exchanges require you to verify your identity with legal identification (ID) documents. In a situation where you withdraw funds from an exchange into your wallet, your identity can be linked to that wallet, and all your linked transactions could be tracked.
Blockchain analysis companies can use information from your linkable transactions to track how many bitcoins you own, what you spend your coins on, and who you transact with. If you are conscious about your privacy, you might need a bitcoin mixer.
What is a Bitcoin Mixer?
A bitcoin mixer allows you to mix your coins with other users. This obscures the ties between your personal identity and bitcoin transactions.
The end goal of a bitcoin mixing service is to create a misleading trail of transactions that makes it difficult to track your transactions. This is achieved by breaking down your bitcoin into smaller parts and then mixing them with coins from other transactions.
Most bitcoin mixers are non-custodial, run on the Tor network, and do not keep records of users after a couple of hours.
Why Do People Use Bitcoin Mixers?
The primary reason for using a bitcoin mixer is to increase transactional privacy. You may not want “the whole world” to be able to see what you are doing with your bitcoin. Through the use of a mixing service, you can achieve that despite Bitcoin’s public blockchain.
Moreover, there are a number of other reasons why you should consider using a bitcoin mixer. They include:
Your Transactions Reveal Personal Finance Information
Every time you send bitcoin to or receive bitcoin from an individual, the other party gains some information about your bitcoin holdings.
For example, if you have ten bitcoin in your wallet and you send two to another person. The individual who received the bitcoin now has access to your bitcoin address, which allows them to check your balance on the blockchain.
In some cases, by analyzing your inputs and outputs, they can predict other addresses you own, giving them more information about your finances and transactions you have done in the past. Mixers can prevent this. The mixer breaks the connection between addresses in your wallet by creating transactions that make it difficult for blockchain analysts to track.
Based on the example above, if you use a coin mixing service to send out the coins, the receiver can still check the blockchain to verify the transaction but will be unable to track your old transactions and find your bitcoin address.
Blockchain Analysis Companies Are Watching
Over the years, blockchain analysis companies have been established to track transactions and monitor the Bitcoin blockchain. These groups have resources to probe deeper into transactions, with some going as far as connecting IP addresses to bitcoin transactions.
Further, cryptocurrency exchange verification is required by regulators to keep an eye on how individuals use their bitcoin. This means that exchanges can still trace your transactions after you have purchased bitcoin.
Bitcoin mixers allow you to detach connections between your initial receiving address and other transactions you make. This can prevent companies from gathering data about you, which it would otherwise share with (or sell to) third parties.
To Prevent Censorship
Money has become a tool used to fund political groups and operations. In authoritarian regimes, where the financial system is highly monitored by the ruling government, critics or opposition groups may opt for bitcoin.
To ensure complete privacy while using bitcoin, such groups will require bitcoin mixing platforms. Without increased transaction privacy, these groups risk losing support in situations where the state begins to target individuals funding them by tracking their transactions on the blockchain.
This allows bitcoin to be used as a tool for freedom of speech and expression.
If you want to mix your coins to protect your financial sovereignty as a bitcoin user, check out Bitcoin Mixer.
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