Opinion: Bitcoin Still Expected To Grow Exponentially, Especially In Africa
When the words bitcoin and Africa appear in a sentence, the word remittance usually follows, says Alex Lielacher in.
Bitcoin was launched eight years ago and hit the mainstream in 2013. Its low-cost money transfer feature was hailed as the solution to expensive remittance charges by the large money transfer operators Western Union and MoneyGram — especially true when it comes to transferring funds to Africa.
However, bitcoin remittances in Africa have not really taken off.
A summit Thursday in Johannesburg focused on believers who think blockchain technology will emerge as one of the biggest disruptors of this age.
From IT Web Africa. Story by Olusegun Ogundeji.
Ahead of last Thursday’s Strate Africa Blockchain Summit in Johannesburg, speakers shared their views on potential uses of blockchain technology in Africa. The summit focused on how blockchain technology will emerge as one of the biggest disruptors of this age.
Although bitcoin was the first product to use blockchain technology, interested users need to separate bitcoin from its underlying technology, said Llew Claasen, executive director, of Civic/Bitcoin Foundation. He was scheduled to talk on Blockchain KYC and Perfecting Identity Validation.
“Many other organisations have subsequently started work on alternative blockchains, but the principles are mostly still the same,” says Claasen. “From a bitcoin token perspective, we expect adoption to grow in the near term in the areas of savings, peer-to-peer payments and mobile PoS (point of sale) for informal vendors. From a blockchain perspective, we expect adoption to grow in the near term in the areas of payment clearing and settlement, remittances, asset registries, especially title deeds and identity.”
Lorien Gamaroff, CEO of Bankymoon, was scheduled to talk on Blockchain 101 + Public vs Private Blockchains. Gamaroff likened blockchain-based digital currency adoption to the internet’s slow start, and how web use eventually became mainstream.
“We can see a similar adoption trend occurring in blockchain-based digital currencies, specifically bitcoin, the first and most well known. Bitcoin was invented in 2009 and was initially only understood by people with a technical background. Very few consumer friendly applications have been created to date,” Gamaroff said. “Merchant adoption has been sluggish and there has been a lot of negative press regarding scams, money laundering and underground markets.
“Bitcoin growth is set to become exponential, especially in Africa. There are a number of reasons for this — 80 percent of Africans do not have access to traditional banking services. Cross border remittance has very high costs with African corridors being the most expensive.
Gamaroff added that Africans understand the fragile nature of centrally governed financial systems and are eager to adopt alternatives. Faith in central banks is exceedingly low, particularly in countries like Zimbabwe and Nigeria. This is unusual though because the global financial system itself is at risk with negative interest rate policies in the major economies and extremely high levels of government debt exposing its fragility.
Gamaroff says bitcoin acts as a hedge against inflation and monetary control and more people will come to see this over the next few years as the existing system crumbles. However, interest in bitcoin has been sidelined by blockchain or distributed ledger technology which underpins it.
“Over a billion dollars has been invested in companies, proofs of concept and projects which aim to exploit the technology. Many of these efforts will be in vain although there may be productive innovations that emerge. It is unclear at this early stage how blockchains will be incorporated into existing business processes. Business cases and appropriate-use cases remain elusive. The only clear use case, and one that is actually in production, is a decentralized currency,” added Gamaroff.
Read more at IT Web Africa.
Will bitcoin remittances finally take off in Africa? IT Web Africa reports:
As Bitcoin awareness and adoption is slowly growing in Africa, more remittances will likely start to take place using digital currencies. Considering that the average fee for money transfers to Africa is 12 percent and the average size of a transfer is $200, according to the World Bank, choosing digital currencies as a means of transferring money makes sense, given the low costs and the speed of the transactions. As the ecosystem matures and more companies experiment with ways to overcome current obstacles, bitcoin may eventually begin to make inroads into the multi-billion dollar African remittance market.
Read more at IT Web Africa.