What is Bitcoin, one might ask?
In a lay man’s language, Bitcoin is a currency just like the normal notes and coins, the difference is that Bitcoin is a digital currency not backed by anything and managed and issued by a network.
Bitcoin is an online payment system invented by Satoshi Nakamoto in 2008, and only released it as open source software in 2009. The system is peer-to-peer, therefore users can transact directly without the need of an intermediary. The system works without a central command or a single administrator, hence it as been categorised by US treasury as a decentralized virtual currency, Bitcoin is a cryptocurrency therefore Bitcoin users are not protected by refund rights or chargebacks.
Many African countries like Kenya, Botswana, Nigeria, SouthAfrica have greatly embraced the idea of Bitcoins and traders in these countries have formed groups to help themselves in this rather confusing trade of digital currency mining and trading. In Africa, digital currency is a new thing and Bitcoin is that first of its kind here.
On the otherhand, in Uganda, Bitcoins are new confusing thing, many Ugandans still keep their money not in banks but under their beds not because they are illiterate but because they are slow to trust. People use the prominent Mobile money to transact because the money is directly on their phones hence they don’t have to make a que at the bank or even be afraid of being attacked and stolen from. Ugandans in the Diaspora use Remit to send money to people back home, well as some use Western Union, It should also be remembered that very few Ugandans even own credit cards as many embrace debit cards and still, very few Ugandans do online shopping as they prefer to go shopping physically not virtually, this is still some what blamed to the low trust nature of Ugandans or one might say, Ugandans are very cautious of how their money moves or is circulated.
I am no Bitcoin Expert, but let me try to explain why Bitcoin will not work for Africa more so for Uganda.
- Cultural rigidities, Africans and Ugandans are very cautious people, they often tend to avoid the White man’s invention because of reasons I will not spell out here. Now here is Bitcoin a new currency, a currency like no other, managed by a network and run by a Mathematical formula and often used for online shopping. This will surely take long to penetrate the African Market.
- Bitcoin price is Volatile, which means it’s price is very unpredictable, this makes Bitcoin a high risk asset and people are warned not to store money with Bitcoin, this is mainly attriibuted to the fact that Bitcoin is a young economy. The Ugandan economy is almost dependent on the US dollar that is always on the rise or fall, this makes bitcoins quite expensive, In today’s market, 1 BTC (Bitcoin) = $ 283.63
- Bitcoin is an regarded as an experimental currency because it’s still in active development. Since it’s a new invention, ideas that have never been expored before are being explored thus its future can’t be predicted by anyone.
- Bitcoin is not a conventional currency hence is not backed by or based on gold or silver, Bitcoin is based on Mathematics, hence people simply use a software program that follows a mathematical formula to produce Bitcoins. Since the formula is freely available, this makes the risk high, as crackers or hackers might disorganise the system.
- Bitcoin has suffered major hack losses in past years, to Many Africans and Ugandans, history matters alot and such history is not good for the growth of Bitcoins in Uganda or in Africa. ie; Bitstamp exchange was hacked of $5mn worth of Bitcoin, another BTER claims $1.75 million in Bitcoin was stolen from Cold Wallet hack.
More of such Bitcoin hacks can be got here… http://goo.gl/p1n6Hx
That said, we remain the authors of our future, the designers of the Africa we want, new inventions are very welcome but inventions with so much risk and from which alot can be lost might be very misleading. As many online scums suffice, Africans are slowly losing their trust in the Whites, and hey this ain’t Karma.