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In a continent that is synonymous with virtual currency in the name of mobile money, bitcoin has somehow had a slow start in Africa. Not many people are embracing this technology despite the fact that it is taking the world by storm, and education to the product could be the setback.
Francois Harris the founder of Bitcoinzar, which is an information site for bitcoin users in South Africa, confirmed the low numbers of users around Africa.
“Real bitcoin users, who are daily users of the bitcoin network, and understand the technology and how it works, probably less than 1000 people,” Harris said.
“There are however a lot of users who are once off users who use bitcoin to make a payment when that is the only method, and even some who don’t even know they are using bitcoin technology as the services they are using run on the bitcoin but it is seamless for the user,” he added.
Harris said that the uptake of the digital currency, in South Africa has had a rapid growth through educational events, local meetups and conferences.
However, Harris warned that there are a lot of factors to consider when launching a bitcoin service in the continent.
“There is a misconception that Africa is the Holy Grail for bitcoin, due to its effective mechanisms for remittance, whilst this is a big market there is still a lot of water to flow under the bridge,” Harris explained.
“Most Africans who are sending money into Africa are not using bitcoin yet as a mechanism for remittance and traditional options like MoneyGram and Western Union are still the biggest players in that market.”
For Bitsoko, a Kenyan bitcoin exchange platform, having meetups will enable them attain more users beyond the 500 on they have currently. In July this year, the company received US$100,000 from Grand Challenges Explorations (GCE) under the Bill and Melinda Gates foundation to expand to other parts of the continent.
“We are planning a series of Bitcoin meetups and Hackathons in conjunction with CCN (College Cryptocurrency Network ) we will put out a date when we launch the first of its kind,” Gibson Juma, co-founder and CEO of Bitsoko said.
One of the biggest advantages of bitcoin is that it is not centralized the way, mobile money is. Mobile money is largely controlled by telecom companies.
“What Bitcoin is doing to finance is what Facebook is doing to communication. Making it free simple and secure to use. Mobile money is not Digital Money, But Bitcoin is and with everything digital it has all that comes with it,” Juma said.
Harris said that it was a difficult feat to teach new bitcoiners the way the service works. In the traditional fiat world, banks are the main players in the game. They are for intents and purposes private extensions of government. Therefore it would be natural for banks to promote and educate or assist their customers, Harris said.
“Though some people view bitcoin exchanges as the banks for bitcoin, the exchanges themselves are simply gateways between fiat money and digital currency,” he explained.
He added that there are various online resources that would help educate bitcoin users on how to use the currency, including Bitcoinzar.co.za which he heads.
Smartphone and internet penetration in Africa gives hope to bitcoin exchange platform as the service currently needs the use of internet connection.
“As more both smartphone and internet penetration on the continent of Africa grows, the potential of bitcoin adoption can grow with it. More users of smartphones and the internet means a bigger potential customer base for bitcoin companies as well as many others,” Harris held.
With the nature of bitcoin having a decentralized nature, and the growth of smartphones, Juma let out a warning call for the traditional cash establishments:
“For the first time we are able to innovate the financial sector. Never before has this happened or has technology been dependable and robust enough to allow for digitization of value. Just as state separated from the church, so will money separate from state.”