Everything About Bitcoin: Bitcoin Meets Africa -The Good and The Bad
Reason why Bitcoin was founded
When Satoshi Nakamoto introduced Bitcoin to the world in 2009, he had a vision that it will change the way people manage money. Over 10 years later, Bitcoin is indeed changing the way people manage money.
The use of the cryptocurrency keeps increasing year after year. For the Africa continent, it is no different, although Bitcoin was met with mixed reactions, most especially from the Government.
Individuals and businesses are actively making use of the Bitcoin as well as other cryptocurrencies. In 2019, Africans received about $8.1 billion worth of crypto and sent about $8.0 bilion. So far, what has the use of Bitcoin affected?
As a new User,you can learn how Bitcoin works here https://afroconomy.co.uk/bitcoin-everything-about-bitcoin-and-how-bitcoin-works-for-new-users/
The Good
In Africa, Bitcoin has brought many benefits to individuals and businesses alike. Majorly, this has to do with international money transfer. With Bitcoin, Africans can send money to anyone at anywhere, provided that they have a Bitcoin wallet. Moreover, it takes just a few minutes, a perfect definition of quick payment.
This is a lifesaver for people who deal with international businesses with several limits set on international payments by banks. Take Nigeria for instance, MasterCard holders are unable to transact above $100 using their credit card in a month. Supposing you facilitate the money transfer at the bank, there’s much paperwork involved and wire transfers are not instant. One can also use mobile money, but those are not accepted on an international level.
Before now, you would need to purchase foreign currency using your local currency before you can spend it on an international scale. If the currency should be devaluated, like it has happened in several countries due to inflation, you’re at risk of major financial loss in your business. Fortunately, Bitcoin’s emergence is eliminating the possibility of exchanging your local currency for foreign ones before spending.
Locally, Bitcoin is helping merchants receive easy payments from their customers and also helping them make more profit. This is because Bitcoin transactions attract significantly lower transaction charges when compared to bank charges or to what brokers accepting mobile money charge.
Furthermore, due to Bitcoin’s decentralization, people have total control over their money with Bitcoin. Transactions are peer-to-peer without the need of any third party. People no longer have to worry about the government or financial institutions freezing their money.
The Bad
In as much as Bitcoin adoption had many positive effects in Africa, there have been some problems too. The persistent one is the problem of regulation. There isn’t any African country where the use of Bitcoin is regulated, although there are hopes of crypto regulation in Nigeria and South Africa.
Lack of regulation means individuals and businesses using Bitcoin do so at their own risk; there’s no safety from the legal system. Bitcoin trading, investment, and exchange platforms operate individually and anyone can spring up at any time. This has led to scamming in various cases when people invest in the wrong company.
No doubts, not all the cryptocurrency platforms online are legit. Some are pure frauds and if there were regulation, investors would be able to differentiate between the legit ones and the fraudulent ones. However, this has resulted in the low presence of corporate investors in the African crypto industry.
Additionally, only few top investee companies list Bitcoin or other cryptos among their investment products. Not to mention, the central bank of Nigeria, Kenya, and a few other African countries has cautioned their citizens against investing in cryptocurrencies. As a result, none of these top investee companies wants to “stain” their portfolio with a “questionable” product.
The decentralized nature of Bitcoin is also one of the major problems. You can track the amounts involved in every Bitcoin transaction, but you cannot identify the parties involved in the transaction. The most you can get are the Bitcoin wallets that reveal nothing about their owners’ identity.
As a result, it seems as though the Bitcoin is helping fraudsters send and receive money locally and internationally without being noticed. It is at the point that financial banks in some African countries have been authorized to disapprove every transaction involving Bitcoin or any other cryptocurrencies.
The Conclusion or Bottom Line
Many Africans have accepted the Bitcoin, while its transaction rates keep increasing daily. It’s very much easy to exchange local currencies for Bitcoin as there are several crypto brokers available. However, as pointed out, regulation is the number one factor that affects Bitcoin.
The situation in most African countries is this – the citizens have accepted the Bitcoin, but the government hasn’t. Not much blame can be laid on the Government who are concerned about the financial safety of their citizens.
With regulation, all of these will be past tense but again, the decentralized nature of the blockchain makes it difficult. Nevertheless, Africans will continue to use Bitcoin. They have seen first-hand the advantages it brings and that outweighs the bad side; quick money transfer, low transaction rates, no border limits, and what do you have? Bitcoin.
- Comedian Dave Chappelle tests positive for coronavirus cancels shows - January 28, 2021
- Boeing declares $12billion loss for 2020 - January 28, 2021
- American singer Halsey reveals she is pregnant with 1st child - January 28, 2021
