Bitcoin and blockchain technology are ripe for mainstream adoption in Africa. Banking systems across the continent are expensive and/or outdated. Many Africans do not have access to these banking systems or basic financial utilities. The lack of economic infrastructure paired with inadequate financial education has left many Africans without bank accounts. There is a need for a secure way to make digital payments and loans. Many Africans also do not have a place to store their hard-earned salaries.
We have already seen cryptocurrencies attract a large audience and active users in Asian and Western countries. Is Africa next?
Reasons Why Africa Might be the Next Big Market for Cryptocurrencies
It’s hard to expect wide cryptocurrency adoption in a continent where a significant percentage of the population do not have bank accounts, but several indications show that cryptocurrencies will survive in Africa. Many people in Africa, suffer from rapidly inflated currencies, which is always a terrible thing.
Although there are still African countries with a strict stance on cryptocurrency, Africa has increasingly shown itself to be open to the idea of blockchain and cryptocurrency.
Many countries in Africa realise the potential economic improvement that comes with blockchain and cryptocurrencies, and have started experimenting with the technology, or welcomed many blockchain startups to do business within their borders. South Africa’s central bank is actively studying cryptocurrency and encouraging blockchain innovation.
Cryptocurrency Advantages and Disadvantages for Africa
Cryptocurrency is not under the regulation of governments, nor is it issued by the central banks. This can cause it to have both advantages and disadvantages for Africa.
- Easily accessible, anyone can get involved with cryptocurrencies, and make use of them. All that is generally needed is an internet connection. There is also no age barrier, so anyone can participate.
- Making payments using cryptocurrency is fast and easy. Although it is not always as user-friendly as a simple bank transfer, it is fast and usually very easy to transact with cryptocurrencies.
- You don’t need to share your identity or whereabouts or the details of the transactions made between you and the beneficiary. Privacy is one of the main attractions of cryptocurrency.
- Many people are not aware of how to use cryptocurrency, and this leaves them vulnerable to scams and hackers. In order for Africa to become a leader in cryptocurrency adoption, we need to ensure that cryptocurrency is easy to use, transact with and understood by the general population.
- There is a possibility of losing your private key or wallet. There is also the possibility of accidentally giving away your private key. There is tremendous risk involved when dealing with cryptocurrency. When you lose your wallet, you can’t simply just phone your bank, and ask them to return the money. You either find the lost wallet or say goodbye to your funds, forever.
- The two main cryptocurrencies are Bitcoin (BTC) and Ethereum (ETH), but their prices are volatile. Speculation and uncertainty can cause prices to increase or decrease. In the long run, this will affect real-world adoption, especially in Africa. Imagine being paid your salary in Bitcoin (BTC). Today your salary could afford two new TV’s, whereas tomorrow, you can only afford one new TV.
The Case for Cryptocurrencies in Africa
As we have come to know that new technology often creates a chasm between those who have and those who do not. Cryptocurrency presents a massive opportunity for Africa. Africa definitely seems to be the next big market for cryptocurrencies. There are already numerous exchanges in Africa, which allow easy access to cryptocurrencies to many Africans. But much still needs to be achieved before widespread adoption of cryptocurrency in Africa.
This article was contributed by South African freelance writer and blockchain developer Leigh Williams.
Blockchain Adoption in Kenya: An Interview With Blockchain Taskforce Chairman Bitange Ndemo
Kenya’s private and public sectors have shown a keen interest in blockchain technology as the world attempts to tap into its potential benefits. To better understand the current state of blockchain adoption in Kenya, Bitcoin Africa reached out to Bitange Ndemo, the chairman of the Blockchain & AI Taskforce for his insights on the subject.
The State of Blockchain Adoption in Kenya
While blockchain adoption in Kenya is at its infancy, there are already a handful of companies implementing this disruptive technology to solve various challenges. The most notable of these companies include IBM, Twiga Foods, and TAZ technologies.
Moreover, Kenya’s Ministry of Housing has declared its plans to execute its affordable housing project on the blockchain to improve transparency while Kenya’s telecom giant Safaricom, Kenya’s electoral body, and the Association of Construction Managers of Kenya have also shown interest in implementing distributed ledger technology.
Additionally, the government seems interested in creating an environment to enable widespread blockchain implementation. The creation of the Blockchain and AI taskforce, which has made several recommendations towards blockchain adoption, is a testament to this. Some of the taskforce’s recommendations include creating trusted digital identities and a central bank digital currency.
Creating Trusted Digital Identities
In the past few months, Kenyans engaged in the registration of a digital identity, which will enable them to access government services more seamlessly.
According to Mr. Ndemo, the Huduma number (digital number) initiative was a recommendation of the taskforce to give Kenyans a trusted digital identity. The trusted digital identity will “enable the creation of the blockchain [for the flawless provision of] services,” Ndemo stated.
A trusted digital identity will prevent problems such as the duplication of identification numbers and the necessity to hold multiple numbers from a driving license number to a birth certificate number.
Developing a Central Bank Digital Currency
In 2018, the taskforce proposed the development of a central bank digital currency (CBDC) that would act as a valid legal tender. Although it is not yet clear if the CBDC will be executed on the blockchain, the digital currency would improve transaction traceability and thus reduce cases of corruption in the East African nation.
The proposal is supported by the Central Bank of Kenya (CBK) where its officials are working together with the taskforce to create a legal sandbox, according to Ndemo.
South Africa’s central bank, for example, is already making huge strides in exploring a CBDC, which could motivate the CBK and the taskforce to develop these plans further.
Tokenising the Kenyan Economy
The tokenisation of assets is another important aspect of blockchain adoption in Kenya. According to Ndemo, Kenya’s economy needs to be tokenised in order for Kenyans to enjoy benefits such as increased liquidity, enhanced security during the transfer of assets, elimination of intermediaries, faster transfer of ownership, and the ability to sell or buy assets 24/7.
“We need to slowly begin to tokenise the economy and develop some value chains to help the citizens to understand [this process],” Ndemo stated.
Tokenisation is the act of digitally storing the rights to an asset on a blockchain enabling the transfer of ownership from one person to another. Some examples of assets that can be tokenised include houses, land, information, art, music rights, and identity.
The Future of Blockchain Adoption in Kenya
Much is expected from the Blockchain & AI Taskforce as Kenya strives to live up to its African Silicon Valley title. Therefore, the taskforce has an uphill task as it begins implementing some of its proposals.
“We finished the [blockchain and AI] report two months ago and now we start some of the implementations,” Bitange asserted.
Asked about the future of blockchain adoption in Kenya, Bitange said adoption is inevitable.
“There is no choice but to embrace these disruptive technologies. Several enterprises have already started to use the fourth industrial revolution technologies with excellent results. Soon, virtually everybody will need these technologies.”
With a vibrant local tech startup scene, a small but established cryptocurrency community, and a government that is supportive of blockchain technology, Kenya is positioning itself to become a leader in distributed ledger technologies. It will most likely not take long for blockchain trials to turn into blockchain solutions that are being used by Kenyans on a day-to-day basis.
Can Cryptocurrency Disrupt the Online Gaming Industry?
Cryptocurrencies have had a marked impact in various industries over the past few years, generating hype and controversy in equal measure.
When it comes to online gaming, there is ample opportunity for bitcoin and its contemporaries to cause disruption. But what shape will this shakeup take and how will this differ depending on the segment of the market that is affected?
Online Casino Sites
The rise of digital gambling services has been fuelled in the recent past by the relaxing of regulations surrounding web-based wagering, as well as the streamlining of the transactions required to deposit and withdraw cash from casino sites.
In spite of ongoing efforts to address claims that some countries are too liberal in terms of online gambling regulation, continued growth is anticipated and the industry could generate $100 billion annually within the next half-decade.
Unfortunately, most mainstream casino sites do not offer direct deposits and withdrawals using cryptocurrency. If you want to snap up bonus deals at Casumo or any other popular site, you will most likely have to rely on a credit or debit card transaction.
Indirect use of cryptocurrency can be achieved in this context through certain payment platforms. Skrill, for example, offers a crypto-oriented aspect of its service that can then allow for conversion into a classic fiat currency.
The reason that online casino sites are anxious about embracing cryptocurrency is that it is still subject to a significant degree of volatility, with signs that this state of affairs will persist indefinitely. This is something that players are also considering from a practical perspective, with the investment opportunities presented by cryptos being seen as enough of a gamble in their own right, without bringing the likelihood of losing money at a casino into the equation.
Online gaming used to be casually competitive, but it did not take long for professional players to emerge and tournaments focused on showcasing their skills to be developed.
Prize money for major events based on titles like Counter-Strike: Global Offensive and Starcraft can spiral into the tens of millions of dollars, while huge audiences from around the world tune in to see their favourite players and teams do battle.
The influence of cryptocurrency in this area of the market is similarly nascent and in the process of evolving, rather than being a truly disruptive force that is impossible to ignore. What is more relevant to esports is the way that blockchain technology is leaving its mark at the moment.
Blockchain provides the backbone of cryptos and ensures that security is optimal. This is being adopted by certain emerging online gaming service providers in order to reduce the chances of cheating and prevent unwanted outside intervention in both high profile esports events and everyday face-offs between amateurs in their own homes.
As with online casinos, gambling is also being factored into the esports scene at the moment, with both cryptocurrency and blockchain technology facilitating the emergence of new solutions to make this a possibility.
Being able to place a wager on the outcome of a digital competition in the game of your choice is not a new concept. What is gaining traction at the moment is the ability to bet on how well you will perform in a match that you actively participate in.
Platforms which let players host their own mini-tournaments, gamble on the result and make money while they play the games they love can use crypto services to make this happen. This is a dramatic shift from the traditional approach to online gaming and will continue to cause changes as the industry matures.
3 Reasons Why Africa Is Set For A Cryptocurrency Explosion
Bitcoin and other forms of cryptocurrency have irrevocably changed the way we think about money from a fundamental standpoint. Where most forms of hard currency are subject to government oversight and regulations, cryptocurrencies are typically free from such restrictions. Hence, it is easy to see why bitcoin was a favorite amongst dark web users and criminals. Controversy aside, cryptocurrencies are considered the way of the future and have the potential to bring about a revolution.
With a massive population and its wealth of natural resources, the continent of Africa has been described by Forbes as being the last frontier of investment. Now, in the face of changing times and an increasingly connected world, cryptocurrency is making its way to Africa.
Join us as we take a look at why Africa may be the next big thing for cryptocurrency.
1. The Lack of an Organised Financial System
With its bloody history of colonisation, political instability, and civil wars, Africa’s growth in the banking and finance sector has been lacking. Despite initiatives undertaken by the IMF and World Bank, financial inclusion in Africa remains low.
A lack of political will and resources has made the task of developing a banking infrastructure a daunting one. As a result, this has left a sizable amount of the population with little to no access to financial services.
Fortunately, because cryptocurrencies can be transferred and received by anyone with an Internet connection, the need for middlemen or banks is eliminated. Throw in the fact that Internet connectivity in Africa has been on the rise and we have all the elements required to see an increase in cryptocurrency uptake.
The trend can be witnessed by the number of cryptocurrency exchanges appearing across Africa. From Golix in Zimbabwe to the Naira Exchange in Nigeria, one can expect to see an increase in uptake in the years to come as Africans move beyond banks and their legacy services.
2. The Youth Factor
With an entrepreneurial community and a high rate of tech-literacy, it should come as no surprise that a rising number of youths in Nigeria have turned to freelancing in lieu of traditional employment. Working with members of the international community, these freelancers offer a variety of services that range from copywriting to programming.
Unfortunately, the notoriety of Nigerian Internet fraudsters has resulted in some complications for burgeoning freelancers. For example, payment companies like Paypal do not allow the transfer of funds into Nigeria in order to discourage Internet fraud. On the other hand, payment companies who do offer such services to Nigerians often do so at an exorbitant cost.
To work around this, freelancers in Nigeria have turned to accepting cryptocurrency as a form of payment in lieu of cash transferred online. Among the crypto-literate in Nigeria, bitcoin is seen as being on par with the US dollar.
3. Cryptocurrency As a Stable Form of Currency
Bitcoin creator Satoshi Nakamoto has often cited that bitcoin was intended to be immune to economic turmoil due to its decentralised nature. Suffering from crippling hyperinflation, citizens of Zimbabwe have turned to Bitcoin and other cryptocurrencies despite being banned by the Reserve Bank of Zimbabwe.
Tech-savvy Zimbabweans have often cited that utilising bitcoin as a medium of exchange allows them to hedge the value of their cash against hyperinflation. In a nation where financial services are sketchy at best and foreign investment is minimal, bitcoin provides Zimbabweans with a measure of much-needed stability.
Further proof of this can be seen by how Venezuelans have turned to bitcoin and other cryptocurrencies in lieu of the now defacto useless Bolivar. Being free from bank and government intervention, cryptocurrencies allow citizens to freely transfer funds into or out of the country with minimal fuss.
Cryptocurrencies have the potential to democratise financial services due to their independence. With adoption rates of Bitcoin and cryptocurrency set to explode in Africa, you just need to hold your horses and wait for the value growth.
This guest post was contributed by cryptocurrency writer Benjamin Lee.
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