Western society has a tendency to focus on how Bitcoin and the world, revolve around them in domestic terms. Bitcoin has been a very exciting investment opportunity, with five years of unprecedented growth, followed by one year of epic drops in dollar value. It has mostly made its name based on that history alone, but Bitcoin is much more than a mere high-risk, high-yield investment. This is especially true in developing nations and emerging markets. The naysayers and pessimists in particular always fail to see the forest through the trees when it comes to Bitcoin, and its global growth potential.
Africa represents many perceptions to many people. What is undeniable is that it is an emerging market, ripe for extensive development, especially economically. Proof of this has been shown in Kenya, one of the more developed African nations. Kenya could represent any economically developing nation whether it is in Latin America, Indonesia or Europe. Long before Americans and Brits were learning how to transfer digital currency on their smartphones, Kenyans were doing it every day, in the real world, with great success.
The M-Pesa has gone from a concept that started two years before Bitcoin in 2007 to arguably the most successful mobile payment system in the world, with over 17,000,000 accounts in Kenya alone. Keep in mind that Kenya has less than 30 million adults in its population. And Keyna telecom giant Safaricom says that over 40% of the country’s GDP flows through M-Pesa, using over 80,000 M-Pesa agents. Good luck finding another currency app with that much influence over a nation in such a short amount of time.
So Africa is certainly a step ahead of the West when it comes to the idea of leaving behind cash, with its own legacy of corruption and crime, and move into the next-generation of monetary policy. Now Bitcoin is just getting ready to hit the African markets, and many businesses are looking to build on M-Pesa’s epic success story. If M-Pesa works this well, how far can Bitcoin go with the rest of the continent eager to start their economic success story? If Kenya can jump a generation ahead of the West in payment technology, why can’t all African nations, or any emerging market take Bitcoin and run with it?
Michael Kimani has started the African Digital Currency Association (ADCA) after hearing about Bitcoin three years ago on BBC. He met with the leaders of the Kenyan digital currency BitPesa and built ADCA to act as a lobby group to help promote Bitcoin while creating a national awareness and ecosystem around the digital currency industry.
“It’s up to us to decide how to use it,” says Kimani, “I saw an opportunity to be a pioneer,” he said. “I compare it to the Internet of the 1990s. As much as I see people are not really aware of it, in the next ten years I think it’s going to be huge.”
Africa needs innovations like Bitcoin. Africans pay 12% remittance fees on average for all money sent to the continent, which runs into the hundreds of billions of US Dollars annually. In Kenya alone, that number is $1.3 Billion. A lack of competition in services like Western Union and poor regulation of this market contribute to this being the highest remittance cost per capita in the world. Bitcoin is custom-made for to end such discrepancies by design. Bitcoin is far from just an investment for affluent Westerners. It is a way to change the world of money from now on.
How Bitcoin can work in countries like Kenya are with new Bitcoin startups like BitPesa. BitPesa plans to help workers living overseas use Bitcoin to send money home to Kenya for a 3% flat fee, instead of the 12% average remittance rate. BitPesa then transfers that money to your M-Pesa account, where the recipient can withdraw Kenyan shillings from the 81,000 M-Pesa agents available. BitPesa states their goal is to capture at least 1% of the $1.3 billion Kenyan remittance market by May, targeting business payments and retail to the country.
Traditional banks have not adjusted to the mobile monetary competition well. Being banks, they look to take as many fees from consumers as possible, where in Kenya it costs 500 Kenyan Shillings to maintain a bank account. That is two day’s pay for the average Kenyan. Never mind the travel and inconvenience of going to the bank that does not have the number of M-Pesa locations, nor the M-Pesa mobile convenience.
Corruption and crime with cash are rampant in all societies, even in the West, where issues are more clandestine in practice. The moves made in Kenya have reduced crime from when the country was strictly cash-based, and the cost of doing business has dropped as well. Kenya has moved toward these latest technological forces more out of necessity than the established West has. The markets are not the same, but the improvements are dramatic. The next step is reducing the excessive charges in the remittances market by 75% or more, and Bitcoin can do that over the coming years just as M-Pesa has taken the country by storm.
As the US Dollar heads to its Day of Reckoning in the not-too-distant future, many of the Bitcoin naysayers either defend the dollar as eminently unsinkable (It’s not), or bash Bitcoin as not worthy of succession. Bitcoin is not about replacing fiat currency. It is about making it obsolete, over time. No one says Bitcoin will ever be a Global Reserve Currency, like the US Dollar. It will never be that, nor is it intended. What it is designed to do is to be there when you need one currency to work anywhere, at any time. It doesn’t have a lifespan. It exists as to not be “killed”, any more than Gold can “die”. That is something the US Dollar, or any fiat currency cannot say. The days of revolving around the US Dollar as some emperor of economic power are soon coming to an end. The US Dollar is destined to become the newspaper, compared to the Internet. And Bitcoin is just more useful in the real, digitized 21st century than Gold will ever be.
That is why you believe in Bitcoin. It has abilities things like Dollars and Gold simply lack, that The Federal Reserve wishes they had. And these skills will be incredibly useful to one and all, anywhere in the world that you need currency, as we go forward.
Bitcoin has more talent than we know what to do with right now. It’s up to us to catch up to Bitcoin. And to Africa.
Images provided by Wikimedia and Shutterstock.
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