Bitcoin has not gained traction in Africa. Francois Harris, who runs Bitcoinzar, a South African site for bitcoin enthusiasts, puts the number of real users in stark terms. \"Real bitcoin users, who ar
Bitcoin has not gained traction in Africa. Francois Harris, who runs Bitcoinzar, a South African site for bitcoin enthusiasts, puts the number of real users in stark terms. "Real bitcoin users, who are daily users of the bitcoin network, and understand the technology and how it works, probably less than 1000 people," he told Memeburn.
Harris acknowledges other groups exist at the margins. "There are however a lot of users who [were] once off users, who [now] use bitcoin to make a payment when that is the only method. And even some who don't even know they are using bitcoin technology as the services they are using run on bitcoin but it is seamless for the user."
The continent has watched blockchain excite Wall Street. In Africa, though, progress has stalled, and Harris points to a shortage of knowledge about how bitcoin functions.
Entrepreneurs often misjudge the continent's opportunity, Harris contends. Many assume Africa is the perfect market for bitcoin because remittances flow into the region. But Harris pushes back. "There is a misconception that Africa is the Holy Grail for bitcoin, due to its effective mechanisms for remittance," he said. "Whilst this is a big market, there is still a lot of water to flow under the bridge."
The data bears him out. "Most Africans who are sending money into Africa are not using bitcoin yet as a mechanism for remittance and traditional options like MoneyGram and Western Union are still the biggest players in that market," Harris noted.
Beam, a Ghana-based startup that once facilitated remittances through bitcoin, abandoned the service. The company struggled with exchange rate costs, sparse merchant acceptance, and price volatility.
South Africa moves at a different tempo. Bitcoin adoption accelerated there through community events, meetups, and conferences. Bitsoko, a Kenyan exchange and mobile wallet, intends to drive adoption through organized gatherings. "We are planning a series of bitcoin meetups and Hackathons in conjunction with [the College Cryptocurrency Network]. We will put out a date when we launch the first of its kind," said co-founder and CEO Gibson Juma.
Bitsoko secured validation from a major institution. The Bill & Melinda Gates Foundation awarded the platform $100,000 through its Grand Challenges Explorations program, which supports mobile money solutions for small merchants. Bitsoko committed the funds to expanding its bitcoin merchant payment system and wallet into Zimbabwe and Sierra Leone.
Mobile phone networks penetrated Africa at remarkable speed. South Africa and Nigeria now reach cellphone ownership levels matching the United States. Harris sees bitcoin potential tied to this connectivity: "As both smartphone and Internet penetration on the continent of Africa grow, the potential of bitcoin adoption can grow with it," he said. "More users of smartphones and the Internet means a bigger potential customer base for bitcoin companies as well as many others."
The Cape Innovation and Technology Initiative (CiTi), a government-backed South African nonprofit, recognized the need to nurture this ecosystem. It created BitHub, the nation's first digital currency incubator and hub. "There are many viable digital currency ideas in South Africa that are not coming to market because they lack the infrastructure and support to take it further," CEO Ian Merrington explained. "BitHub is that space."
