If you've been following Bitcoin, you probably know how it is helping in boosting the economy of Africa. Nigeria had the highest Bitcoin searches as per Google Trends, with South Africa coming in a close second and Ghana taking fourth place last year. Bitcoin use in Africa has never been as widespread as it is now, and 2020 is expected to be the biggest year yet.
It was not until 2014 that Bitcoin and other cryptocurrencies began to gain recognition in Africa. Since then, the number of Bitcoin (and other cryptocurrency) users and transactions have exploded.
This could be due to the increased adoption of Bitcoin or due to a greater need for understanding alternative methods of payment and earnings.
What is driving Bitcoin adoption and use in Africa?
Lack of financial integration and bank access
Unemployment, which has driven young people to seek alternative sources of income
High inflation, which makes cryptocurrencies a viable alternative to central bank policies that have proven disastrous
Who is driving Bitcoin adoption and use in Africa?
Small-scale, peer-to-peer (P2P) traders dominated most of the prior use of Bitcoin in Nigeria, seeking to buy and sell Bitcoin for other cryptocurrencies and fiat currencies via escrow-based exchanges. Foreign traders seeking to avoid the foreign exchange controls of the United States have found Bitcoin to be an acceptable alternative
Cryptocurrency transaction volumes on its Kenyan exchange increased 400% compared to the same period last year.
However, there are some drawbacks to this growth
Some argue that the increase in Bitcoin searches in Nigeria and Ghana is the product of scammers looking for new ways to illegally benefit from Bitcoin. Africans lost more than US$50 million after being duped into transferring their Bitcoins to an online wallet
The power of attorney for money is slipping away from higher officials, and confidence in the government's legalised money is eroding
Africa's path out of poverty through cryptocurrency
Africa's existing financial structure was established 75 years ago and has seen very little improvement. Major players in the distributed ledger technology have seen the development of the ecosystem in Africa
Several cryptocurrency exchanges are expanding their presence in Africa by partnering with smaller players or setting up shop in multiple African countries
Bitcoin's future in Africa appears bright, and as more people become interested in learning about investments and cryptocurrency, the number of users will grow in the coming years, hopefully along with regulations that limit the instances of scamming and loss.
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