If you've been long enough in the Bitcoin atmosphere, you've probably heard that Africa will be the next adoption frontier. Nigeria had the highest "Bitcoin" searches, according to Google Trends, with South Africa coming in a close second and Ghana taking the fourth position over the past year.
The surge in Bitcoin searches is a result of multiple activities. This could be due to the increased adoption in some nations. In others, it may be due to greater understanding, as well as the need for alternate methods of payment and earning.
Cryptocurrency in Africa:
The change towards the acceptance in Africa of Bitcoin and other cryptocurrencies did not take off until 2014. That was when Bitcoin exchanges and transactions began, with Nigeria leading the adoption. The number of Bitcoin users and transactions performed in Bitcoin and other cryptocurrencies has exploded since then.
The use of Bitcoin in Africa has not been as frequent at any point in history as it is today. In Africa, Bitcoin has thrived and 2020 has been a breakout year for the continent's Bitcoin.
What continues to drive Bitcoin uptake and use in Africa?
Less financial integration and lower bank access make cryptocurrency popular in Africa.
Because of the lack of jobs for school/university graduates, young people are interested in virtual money.
Africa's unemployment has forced young people to look for alternative ways to make money.
Since African economies use both traditional and cryptocurrency methods, they are becoming more adaptable.
As African countries are combating high inflation, cryptocurrency is likely to be embraced because it has provided an alternative to devastating central bank policies.
Why Kenya and Nigeria lead the cryptocurrency hunt in Africa?
In Nigeria, small-scale, peer-to-peer (P2P) traders dominated much of the prior use of Bitcoin, looking to buy and sell Bitcoin for other cryptocurrencies and fiat currencies using escrow-based exchanges or face-to-face transaction modes. Bitcoin has been found as an acceptable alternative by international traders, importers, and exporters trying to bypass the foreign exchange restrictions of the Central Bank of Nigeria. The fraudulent Ponzi scheme MMM, which yields 100% returns, has also popularized crypto.
In terms of using alternative payment systems for e-commerce transactions, Kenya's advancements in mobile payment services have given it an edge over other African nations. On its exchange from Kenya, cryptocurrency transaction volumes grew 400 percent compared with the same duration last year.
Privileges to Africa via Bitcoin:
Traditional forms of value exchange are expensive and can be incredibly inefficient in many countries across Africa. A new way to exchange, as well as practical opportunities to transform economies and deliver meaningful change, are provided by cryptocurrencies such as Bitcoin.
Binance has a strong presence in Nigeria, and OKEx, a Malta-based exchange, has allured funding interest from South African exchange ChainEx. With its BitPesa exchange, M-Pesa, which has had runaway success in Kenya's mobile money market, is in Ghana. These are only a handful of the emerging crypto space collaborations in Africa.
The unemployment rates have played a key role in influencing Bitcoin searches in these countries. African countries, including Nigeria and Ghana, have seen a surge of freelancers offering their services with quality to their customers in recent years. They are bound to search for alternative payment methods as these Africans look to become part of the gig economy.
Downsides when Bitcoin around:
Critics have argued that this rise in Nigeria and Ghana in Bitcoin searches is a result of scammers trying to find new ways to unfairly earn Bitcoin.
There have also been many frauds concerning cryptography in Africa. When Africans were duped into converting their Bitcoins into an online wallet, they lost more than 50 million dollars.
People’s trust in the government’s legalized money is eradicating and the power of attorney for money is slipping from higher officials. In the case when Zimbabwe started printing trillion dollar notes in 2015, some of the citizens turned towards Bitcoin. This defines the ‘weak foundation’ of the authorities.
Africa’s road over poverty through cryptocurrency in the future:
Because of the many advantages it provides, if there's somewhere Bitcoin will be most helpful, it'd be Africa. You can preserve your money's value with Bitcoin, earn passive income, make smooth transactions, and more.
It is easy to see why many people are asking for change and exploring the different ways to make that change; if you consider that the current financial system of Africa was created 75 years ago and has seen very little change at that time.
Major players have noticed the growth of the ecosystem in Africa in the distributed ledger technology space. Several cryptocurrency exchanges are either setting up shops in several African countries or combining to increase their footprint with smaller homegrown players.
Bitcoin's future in Africa looks promising and as more people are gradually seeking to learn more about investments and in the world of crypto, the number of users in the coming years will be rising.
This content piece is prepared by Nilesh.
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