Bitcoin in Kenya: An African perspective

29 May, 2014

M-Pesa, is a mobile money transfer in existence that has revolutionized the way businesses are being handled in Kenya. This system has not only revolutionized businesses, but all sectors of Kenya's economy.

The populace has embraced this mobile transfer service that is being offered and run by Safaricom, a mobile operator sprawling over to neighboring African countries.

Started in the year 2007, Kenya's economy has thrived well with this brilliant idea of mobile money. It works by allowing one to send cash in form of texts. Despite having roaring of success, the innovation also suffers its own share of disadvantages.

One of the greatest undoing remains that Safaricom's system of money transfer is restricted within the Kenyan territory. However, texting and everything else including calls can be done beyond borders.

In July 1st 2013, young innovators in the country set up a company that would build on this disadvantage by offering the use of bitcoins in carrying out cross-border activities. It is called Kipochi Limited. For the uninitiated, bitcoins may be described as revolutionary digital currency that can be mined from the internet through solving complex mathematical problems. You are awarded a block for solving the problems. The coins can be used as a medium of exchange.

So, what is Kipochi, in a nutshell?

Having been founded by Pelle Braendgaard, Kipochi Limited becomes the latest entrant in Kenya and Africa at large to allow one to transact using bitcoins. It allows for sending and receiving money. It has an e-system of invented for Kenyans and Africa at large, which uses bitcoins.

Pelle's invention wants to make Kenyans and Africans realize the importance of sharing money, not only in Kenya but also for Africa. Kipochi is meant to outshine and build upon the failures or the weak points of M-Pesa.

The main advantage of Kipochi is that it is not a government restricted business; hence individuals will be subjected to zero tax being levied on all the transactions they are undertaking. This is what makes Kipochi edge out Safaricom's M-Pesa system of mobile money transfer.

Kipochi and its features

By using bitcoins, in undertaking most of the transactions, Kipochi assures Kenyans and Africans that this is a sure method of transaction for cross border trading.

Zero rated transaction fees

Kipochi does not levy any kind of transaction fee, though the network that sustains and manages bitcoins does charge a little fee for transacting the transfers.

It's beyond borders, Kipochi has demystified cash transfers beyond the Kenyan border, offering users the option of sending and receiving money in and around Africa.

Building on mobile transfer, Kipochi converts bitcoins into everyone's mobile handset hence comparing it to the Safaricom's system of sending and receiving money.

The bitcoins are sent to an individual's mobile device, this reduces the hassles associated with remembering addresses because your mobile number is your ultimate address.

It addresses all mobile operators' needs; Kipochi is able to let everyone send money between all the mobile networks virtually supporting all the network operators.

Where in Africa are bitcoins being used?

Kenya - bitcoins have been actively used in Kenya for close to two years now.A United Kingdom based company is behind the idea to see to it that Kenyans are able to send and receive money through mobile supported bitcoin service giving a rival to the already existing mobile transfer.
South Africa - being one of Africas developed economies, South Africa is already using bitcoins in rendering services across the world. A good site to visit is the Bit Coin South Africa that is allowing and recognizing the bitcoins as a means of doing purchases and sells.
North Africa - through bitcoin Nordic, North Africa has been able to do business transactions using the CashU system of paying for products and services. This is a brain child of Bitcoin Nordic, which is a company headquartered in Denmark.

Online shops accepting bitcoins in Africa

There are thousands of lists offering e-buying and purchases with the use of bitcoin. Though bitcoins have not been widely accepted in the African market, there exist a number of online shops that do offer and accept their products to be bought online by use of bitcoins. Some of the online shops include the ones listed herein. They offer products for sell and can be purchased by use of bitcoins:

Bitcoin South Africa - An online website based in South Africa. bitcoin South Africa is the leading website and an online shopping venue where bitcoin is the sole currency used. Some of the e-services being offered include; Restaurant and Hotel booking services, tourism Safaris for South Africa, office equipment and motorbikes.
Bright Media - This one offers social media marketing and production of SEO content for individuals.
Bitcoin Kenya - This site in Kenya has the potential of linking buyers and sellers to the products and services being offered.It uses bitcoins as its digital currency.

Online shopping with bitcoins still remains a new thing in Africa. However, a few online shops exist and this tells the magnitude at which these businesses and the mode of payment have been embraced.

Why bitcoin appeals to Africa?

The use of bitcoin is currently generating heated debate because it has a share of advantages and disadvantages. Some of the reasons why it makes it appealing for Africans is because:

Bitcoins are light and quick to manipulate - bitcoins are the easiest and fastest mode of doing purchases online. No need of cards. They can be accessed anywhere by use of smartphones, and the internet in general.
It is quick to do transactions as they are accomplished in a quick and real time.
Though the transactions are done online and in real time, the transactions are initiated in the public glare though the individuals doing the transaction remain autonomous.
Unlike other transactions, bitcoins do not offer any kind of transaction fee. The transactions are done at a hundred percent zero fees.
Bitcoin is digital. With every country gearing towards realizing vision 2030 that has been set by the World's top notch economies, the use of bitcoin as a form of doing purchases makes it fit for the countries to realize and cover huge milestones in the technological sector.
bitcoin is there, everywhere- unlike other forms of e-payment, bitcoin services can be accessed anywhere and at any time so long as you have an app that can connect you to the platform offering the service.

What are the risks associated with using bitcoins in the African content?

Bitcoins still remain very strange to the African market and business sector. This means they have not been unequivocally accepted as a form of currency.
Bitcoin can be used to finance illegal trades that include poaching, drug trafficking and sell of contraband goods.This may help fuel crime and terrorism in the content.
Bitcoin value keeps on changing. They don't have a specific value hence they keep on changing day by day.
Cybercrime remains the biggest undoing for trading with bitcoins in Africa. Individual accounts are vulnerable to being hacked and therefore someone might end up losing their coins.
Once transacted, the transactions cannot be reversed. This remains a challenge to people using bitcoins.

With this little presence of bitcoin in the African market, how can people then revolutionize things and make bitcoin part and parcel of digital money transfer?

There are a number of ways the Africans can be able to initiate the use of bitcoins:

Through e-stores - Kenyans and Africans at large can make the use of bitcoins thrive by allowing people to buy products online through this form of digital payment.
The music industry - music performers can be able to pay for performance and production costs and even market their albums online by use of bitcoins.
Services such e-photo editing and e-webhosting can be conducted and paid for by use of the bitcoin system of payment.

With these strategies, it will see Kenyans and Africa in large embrace the use of bitcoin as a currency. Kipochi limited may also liaise with Safaricom in offering an digital international currency transfer. With these changes taking place, we envisage that bitcoin will soon be widely used in acquiring diverse products and services.

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