Bitcoin is a cryptocurrency. It is a decentralised digital currency without a central bank or single administrator that can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries. The currency is slowly gaining momentum in Africa.

How does bitcoin work

  • You need a digital wallet account on your computer or smartphone.
  • You can sell, buy, send, and receive using your wallet.
  • Your transactions are recorded in a public ledger called the blockchain.
  • Bitcoin transactions are secured using cryptography.
    Botswana;s bitcoiners.

    Botswana’s bitcoiners wearing t-shirts with a bitcoin logo.

    FiFi looks at interesting facts and initiatives regarding bitcoin on the continent.

Social causes

  • Paxful has completed the building of a second school in Rwanda as part of its #BuiltWithBitcoin initiative. Paxful plans to build 100 schools across the continent. #BuiltWithBitcoin initiative raised more than $100,000 in bitcoin and other cryptocurrencies to support the construction.
  • Paxful launched its first university education drive in Kenya and South Africa to expose youth to the true use cases of bitcoin, highlight how to avoid falling prey to bad actors in the crypto-space, and counter the over-emphasis on bitcoin speculation.
  • The Satoshi Centre, founded in 2014, serves as a focal point for Botswana bitcoin community.
    Philanthropy meets bitcoin in Rwanda.

    Philanthropy meets bitcoin in Rwanda.

Events

  • The Blockchain Africa Conference 2020 is the leading blockchain and cryptocurrency conference in Africa bringing together experts to learn how companies and individuals are using this technology on the continent.
  • Taking place on 7 September, 2019 in Cape Town, South Africa, The Crypto Fest 2019 will provide insight into the various cryptocurrencies that exist, highligh the more interesting ones, in terms of adoption and market capitalisation, and will explore the exponential opportunities cryptocurrencies offer.

Bitcoin initiatives

  • BitPesa is a digital foreign exchange and payment platform that leverages blockchain settlement for fast, cost-effective payments to and from Africa.
  • Bankymoon is a South African startup that builds blockchain based solutions and provides consulting services for organisations to leverage the power of blockchains to gain a competitive edge. The startup has created the world’s first blockchain smart metering solution that allow users to top up their utility meters with bitcoin payments.
  • Golix is a Zimbabwean cryptocurrency exchange that allows users to buy and sell bitcoins using their bank account or mobile money.
  • BTCGhana is a remittances platform that integrates bitcoin technology into mobile money plataform in Africa. Supported telecommunications companies are AirtelMoney, TigoCash, and MTN.
  • BitMari is a Zimbabwean-based Pan-African remittance service that leverages on bitcoin technology to tap into new markets of the diaspora remittance.
  • iCE3X is a South African cryptocurrency exchange that allows bitcoin, ether and litecoin trading in South African rand and Nigerian naira.
  • NairaEx is a leading Nigerian Bitcoin exchange where you can buy and sell bitcoin, litecoin, bitcoin cash, ethereum with naira.
    Botswana's first Bitcoin ATM.

    Botswana’s first Bitcoin ATM.

Bitcoin Automated Teller Machine (BATM)

  • There are 10 BATMs in Africa located in Botswana, Uganda, Zimbabwe, South Africa, Kenya, and Djibouti.

Regulations

  • In January 2019, the South African Reserve Bank issued a consultation paper saying that regulatory action on crypto assets needs to be prioritized to protect consumers and investors.
  • In 2018, the South African Revenue Service said that normal tax rules are applicable to crypto earnings.
  • In 2017, a committee was set up by the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) in 2017 to look into the possibility of the country adopting the technology driving bitcoin and other digital currencies – blockchain.

Bitcoin fraud in Africa

  • A bitcoin investment company, Velox 10, disappeared with with millions of Kenyan shillings in 2019.
  • A bitcoin company, Calabar, disappeared with millions of Nigerian naira. The company promised customers 30 percent earning from bitcoin online trading.
  • In May 2018, South African authorities said they were investigating an alleged bitcoin scam, involving a company called Bitcoin Global that defrauded investors of 1 billion rand ($80 million) with promises of huge returns. The company promised customers that they would earn 2 percent per day, 14 percent a week and 50 percent in a month.
  • Angry South Africans looted and torched the home of a man who reportedly operated an alleged bitcoin scam in South Africa.

Bonus global fun fact

"Fun Fact: Thus far in Bitcoin’s history, there has never been a period where you could buy-and-hold for 3 years and not be able to sell at a profit. During most three-year spans, the profits would be dramatic." – The Bitcoin/Government Battle is Vaporware

Conclusion

In 2018, Paxful, one of the largest peer-to-peer (P2P) bitcoin marketplaces in the world, reported that it had seen a 200%+ increase in users in Africa over the previous 12 months.

Further reading