How popular is bitcoin in Africa?

13 October, 2018

It is fair to say that when you are looking at the entire continent of Africa, then when it comes to bitcoin usage and uptake, the picture is somewhat mixed.

To be fair, some of the economies in Africa are so poor and underdeveloped, that the basic infrastructure to engage in blockchain technology does not exist, save for the very few more developed parts of the country. This is particularly true of the poorer countries located around the horn of Africa and in some central zones.

Indeed, in these countries, access is only available to the few, rather than the masses, although the availability of cheap mobile technology, plus improved 3G/4G and WiFi connectivity means that in these parts of the world, more and more people are slowly gaining basic access to the Internet. However, full adoption of currencies like bitcoin remains a long way off.

The picture is more clear in three northern African countries, Egypt, Morocco and Algeria and it is not good news for anybody interested in blockchain technology. Despite being among the most advanced of African countries, with a far higher uptake of mobile technology across their citizens, in each of these countries there is an absolute ban in place on any form of bitcoin transaction.

Indeed, in Algeria, Article 117 of the Journal Officiel released on 28th December 2017 states that "The purchase, sale use and holding of so-called virtual currency is prohibited....Any breach of this provision is punishable in accordance with the laws and regulations in force."

Similarly, in Morocco the Office des Changes stated that it "wishes to inform the general public that transactions via virtual currencies constitute an infringement of the exchange regulations, liable to penalties and fines provided for by existing laws in force".

While on the one hand it is beneficial for a government to have made a decision regarding the legality of bitcoin and cryptocurrency and to have stated it clearly, it still does not address the issue of how they will police the individual user and their access to the Internet.

As we have already seen in previous articles looking at bitcoin's popularity around the world, even in countries where an outright ban on these forms of crypto exist, there is still huge problems in enforcing the ban. The open nature of the internet, combined with its global outlook and the ability to access bitcoin exchanges and blockchain technology located legally in other countries, is something that is almost impossible for governments and law enforcement authorities to enforce effectively.

So much so that even in countries where there is a ban, there is still likely to be thriving bitcoin community in place where the transactions are instead conducted on servers based in other countries.

Where is bitcoin legal in Africa?

It may seem that most of Africa is either unable to access bitcoin due to extreme poverty, or due to a ban by the sitting government, but that is indubitably not the case. There is a thriving bitcoin community in Africa and unsurprisingly, it is the more advanced and technologically developed countries that are leading the way.

South Africa is arguably the leading country when it comes to bitcoin usage and uptake on the African continent and in this country it is not viewed as a form of legal tender, but instead as an intangible asset. However in that country, there are a number of other businesses springing up, based on blockchain technology, that are allowing bitcoin to become more firmly embedded in South African society.

One new startup, rather humorously named Bankymoon (after the former Secretary General of the United Nations) has a consultancy service for businesses which allows them to develop technology that allows companies to accept bitcoins as payments for their services. The country also has a number of bitcoin exchanges available, such as Luno and Ice3x. There is even a Blockchain Academy, which can provide training for a whole range of businesses and institutions about bitcoin and blockchain technology.

Other southern African countries such as Botswana and Zimbabwe also have a burgeoning bitcoin and blockchain community, with both countries having their own exchanges, as well as a number of businesses starting up recently to take advantage of this new technology.

There are also excellent bitcoin communities thriving in Kenya, Ghana and Nigeria in particular, where the concern over their local currencies has seen many individuals feel that bitcoin offers them a safer way to store their money and preserve its value than their domestic currency. It is a similar situation to that seen in countries in South America, like Venezuela and Argentina where hyperinflation has rendered much of the local currency almost worthless.

What is certain is that there is a large and thriving bitcoin community in many different parts of Africa, and that community is expanding as an ever-increasing number of people gain access to technology. Both in the countries where bitcoin is already established, and also in countries where it is just starting to get a foothold.

What are African bitcoin holders spending their money on?

As we have seen, in more developed bitcoin-friendly nations like Nigeria, South Africa, Kenya and Ghana, there are a number of different ways people are looking to spend their bitcoins. In Ghana, there is a land title registry service named Bitland which allows individuals to survey land and record deeds onto the Bitshares blockchain, with the eventual aim of unlocking billions of dollars in previously unavailable property rights.

Ghana also has the Dream Bitcoin Foundation, which aims to facilitate increased awareness and acceptance of bitcoin technology throughout the country and which also encourages young people and entrepreneurs to develop new businesses and technology to advance bitcoin in Ghanaian society.

It's also worth noting that these bitcoin holders will also have access to a number of new bitcoin-only technologies online. One popular way to spend cash has been at bitcoin-casinos, with a new Bitcoin Casino, offering players the first opportunity to play the famous jackpot slot game using bitcoin. There are a total of 1,200 games available at the casino, many of which have not been able to be played by bitcoin previously and of course, this is attractive for those whose bitcoin investment is chiefly for entertainment purposes.

There is absolutely no doubt that African countries and citizens are starting to adopt bitcoin technology in an increasing number of ways. Take up of the cryptocurrency is sporadic across the continent, with the divide chiefly along lines of the relative wealth of the country, but in terms of future growth, it is easy to see why so many people feel that bitcoin has a massive future not just in a couple of African countries, but across the whole continent.