Why the African Continent might be the future of cryptocurrency
Cryptocurrencies like Bitcoin have become widely popular around the world. Initially it was believed that crypto currencies like Bitcoin would fade away as fast as they appeared. It was also believed that it was something that would be great for speculators who want to make a quick buck, or it would be widely used by criminals to hoodwink law enforcement agencies. Though doubts about the usage of Bitcoins by criminals still persist, it now seems that Bitcoins are here to stay.
We can say that Bitcoins are here to stay because many establishments have started taking payments with Bitcoins. Online gambling and gaming websites have started using crypto currencies for payments. In fact, current bitcoin news suggests that payments increased in the first quarter of the year, which speaks about how this currency is growing.
Most people also think that Bitcoins will only be popular in western countries like the United States, United Kingdom, Germany, Australia, France or in Asian markets, like China and Japan. However, many industry experts feel that the growth engine for crypto currency is going to be the African continent and there are many reasons for it to happen:
- Not many people in the African continent have bank accounts. In fact, in Sub Saharan Africa more than 60% of the population do not have bank accounts. This large population does not have access to bank accounts because it is very expensive to set them up. This huge populace can and will be the driving force for crypto currencies in the future.
- The huge African population which is second only to Asia is also one of the reasons why industry experts feel that Africa will drive the growth of crypto currencies like Bitcoin.
- Africa has a very good internet footprint. There are millions of internet users in Africa and the number of mobile phone subscribers in Africa is more than that of the United States of America and Europe combined. This market is huge and can easily be tapped.
- Mobile money service providers are growing in Africa and though this is competition for crypto currencies it shows that there is a market and this market is growing and there is space for both.
- Africa has a large unorganized or informal sector. This unorganized sector provides jobs to many young people. These people who work in private jobs mostly are the ones who are the target, as they will be more inclined to use crypto currencies.
As of now, Africa has still not tapped the potential outlined above vis-à-vis crypto currency. The main markets for Bitcoin as of today are South Africa, Nigeria and Kenya. Though the currencies are traded in exchanges they are not predominantly used for transactions within the countries.
Some transactions are conducted with overseas customers, but it has still not caught on in a big way when it comes to transacting locally. One of the reasons for this could be the massive growth of mobile money service providers. People can send an SMS and complete transactions; it is very easy, whereas with crypto currencies they need to always have internet connectivity to transact.
Though there is a large internet footprint, when it comes to competing with SMS and the ease that it provides it becomes rather difficult. Even though the first Bitcoin ATM was opened in South Africa, the limitations that it has makes it really difficult for people as they can withdraw only 50 Rand.
The way forward in Africa seems to be some sort of technology breakthrough which would allow people to send SMS and complete bitcoin or other crypto currency transactions. There are many blockchain technology companies that are working on this and, when this happens, Africa will become the biggest driver of the crypto currency market. This integration of mobile technology and mobile banking will enable growth of all crypto currencies.
Author: Thyagarajan Gopalakrishnan
Eduard Watson Author
An experienced finance writer for more than 10 years, active industry watcher, and gadget enthusiast.