Topic: Limitations of Bitcoin Utilization in Africa (Read 550 times)

African countries are now starting to move more forward in developing their economy, including in the financial sector, the small value of their currency is one of the factors to try to adopt bitcoin as the Central African Republic is currently doing, in order to secure the country financial future, the president of Africa Central Africa has legalized bitcoin as a legal tender and this makes the Central African Republic the second country after El Salvador to fully adopt bitcoin.

Oluwa you have done a fantastic job. Africa over the years experienced an great influx of ponzi schemes that introduced, infused and expanded the get-rich-quick syndrome in Africans. Some Africans now want investments that would give them immediate returns, hence introducing Bitcoin as a form of investment is rejected by some Africans. Also, most people that have been victims of these ponzi schemes became very careful about other online financial transactions. They prefer to stick to the conventional fiat currency because they are scared that they might loose their money in online financial transactions. Government is not helping matters because most of them have placed restrictions on Bitcoin transactions, this has made the people to patronize illegal or unregistered cryptocurrency service providers thereby becoming preys to scammers. The solution is enlightenment because of they know features of Bitcoin, it would definitely be a major financial transaction option.

permit me to say that all this factors as listed by you were the stands that promoted African youth to sought for a better life in bitcoin adoption, even though the governments in those regions fail to see that but the people have already made thier own decisions to cling to bitcoin for sustainable and what prompted them were majorly some of the factors you listed, though this is my own opinion and approach regarding this, an average African finds it difficult to make a good living that guaranteed privacy, trust, anonymity, less transaction fees and unaffordable standard of living through inflation while bitcoin has come to solve all these and stay.

Absolutely correct, Africa is not a poor continent but the foreign exchange rate make their currencies look weak and that had affected the entire living capacity of the African people. The living capacity of an African family is less compared to the Europeans or Americans due to the exchange rate. As we can see Africans mostly depend on foreign goods and resources to live an healthy lifestyle.

If we look at the import rate of an average african country, we import more than we export which had affected our currency and made the quest for the US dollar more significant. Due to the high demand of the US dollar for foreign transaction of goods and services, this had made the African currencies to fall in demand because we have less export compared to the rate of importations that the sea ports handles every week.

An African man/woman will rather prefer foreign jewelries, shoes, clothes, cars, etc than the locally made ones that are available here. Although I don't blame anyone here because the government is never working effectively on making our locally produce to have more value. The Nigerian corrupted leaders will prefer the latest foreign cars than supporting the locally made cars to grow and have more values.

We love foreign products and value them more than we value our own lives. Don't be surprised, Africans may continue like this becoming poor in knowledge, resources and currency.

Africans are poor! Let's not try to camouflage the truth because if we look at it from the African currencies, standard of living, rate of unemployment, Education, Food etc. We can see that a second class working employee in Africa  and be considered as a third class employee in America. Standard of living in Africa is difficult which had been as a result of foreign exchanges.

i never said africa was "poor"
i was actually countering the 'just poverty' excuse.. by explaining the forex bias

heck even the parts you quoted were me explaining that on the bases of an african person and an american person having the same standard of living (house size, furnishings, diet..) meaning africans are not poor.
the markets STILL represent them unfairly due to how the forex rate is bias.

its not the continent that is weak. its the conversion rate to dollar that causes the issues.
caused not by africa. but by the US wall street.

if i compared 330million africans to 330million americans. and looked at how much land they each owned. the square footage of their homes. if they had a flatscreen TV and what food was in their kitchen. i could easily find them comparable in MANY african countries.

the issue i was raising was although lifestyles may be similar.. the exchange rate to dollar. by which btc is valued in. makes it 25x more expensive to buy an asic miner in africa, than in america. due to the exchange rate.. meaning someone in africa has to work 25x longer to afford an asic. because asics are valued/priced in at an american value/price

even the bitcoin transaction fee.. american bitcoin core developers are not bothered about bringing the fee down from an average of $0.40-$1.60 to say $0.02-$0.06..
(by the way yes they can implement new rules to reduce the fee)
but they are not bothered because they think that 40c-$1.60 is a roughly acceptable price rich americans are happy to pay.. totally forgetting that over 1 billion africans who's average income is only $0.40 an hour see the fee as being 1-4x their hourly rate.

Thanks for the input and additions.
Also if we can scrap out the Fvcked Political representatives, it'll go a long way for the next generation in Africa.
A lot are just scared of damnation and punishment, we'll never get what we want if we don't do what we haven't done before.
As said by Pooya87, Venezuela did it, so every country in Africa likewise can do it, gradually investment in coolants and other prerequisites mandatory for the set up of a Bitcoin mining farm.

Thanks for sharing with us this kind of information. Reading this kind of post makes me more eager to invest with crypto. It really help a lot for me in a very positive way.

Thank you!

I will give my point of view to some of what OP said:
- Price / Financial Limitations = yes, average 3rd world citizens in general are sitting between middle and poor class, affording to buy basics and some extras but definitely won't afford to buy or to risk the equivalent of BTC1 in their local money. The economy is collapsing even in the richest countries and the inflation is hitting everyone so...
- Banks and Poor Governmental support = there is some counties where the banking system is literally controlling the economy and we all know that they are very hostile to cryptocurrencies..
- Education = an excuse that could be accepted for someone without an Internet connection but most people with smartphones have heard about Bitcoin so not doing their search is their fault and media also.
- Mining of Bitcoin = imagine having the sun shining the whole time and not using it to get literally free electricity...
- Resistance to Change = unfortunately that's correct.

Thank you Oluwa-btc with the knowledge, I live the fact that you elaborated more on the knowledge aspect and where you mentioned enlightenment, those are the basic aspect of cryptocurrency utilization in Africa. Nigeria who have the highest volume of cryptocurrency transaction in Africa and second to the highest after United state in total volume. What we need is to learn the technicality of the Bitcoin network e.g building the first cryptocurrency mining farm in Africa, we need to build more knowledge Africans with the right tools will top the rest of the world in cryptocurrency adoption and there some that have been j to cryptocurrency since 2015.

So, doesn't this make it weak?
If you can't compare it to a rich or successful thing then it's obvious it's not successful and it ain't rich for sure so what are you trying to say?
Acceptance of your own status and your own capabilities is the first requirement in order to improve something, once you're on the path of denial you're just going to keep going like this for another century. Some have learned a lesson, some, not!
So, can you please tell me what went wrong here?



I can tell you what, above half of the things OP mentioned about BTC but are omnipresent in everything related to the economy?
Fix those issues first because without them fixed no amounts of Bitcoins will be able to save those countries.


The GBP is not pegged to the USD, pegged means to have its value fixed compared to another one. Second, nearly all of Central Africa uses the CFA franc and has a fixed exchange rate to the euro, well, that didn't help either despite working in other countries. So, there is no case to rest, nothing, nada!

@ Rruchi man, I agree with you on this because some African leaders will never do things on their own or pass bills that will favour their citizens unless they see other big African countries doing so. A good example is the current president of Nigeria Buhari who publicly said sometime last year that Nigerians are complaining about the increase in the price of Premium Motor Spirit(PMS)  from #85 to #180  naira.
He asked the citizens to go to Ghana and see how much they sell PMS there that it is higher so directly he told the people that his administration increase the price of PMS because Ghana being their neighbouring country increased price too.

I do not believe *trading cryptocurrencies* is obscure in Africa at all - it depends on the country really. Those with high censorship of websites usually are the countries whose populations do not know much about cryptocurrencies (the majority of the people at least).

On the other hand, those with trade/diplomatic relations with the US tend to have populations where at least a decent portion of them are trading cryptocurrencies on exchanges - and have even heard of stuff such as non-custodial wallets and stuff.

Interesting isn't it? That has been my experience, pretty much.

My opinion is that adoption in Africa is no different from adoption in other parts of the world - the youth jump in, the ld obviously don't understand it and stay out of it. This leads me to think that adoption will increase globally over the years, as the old population slowly dies out.

A big big thanks for the pointers, yep.

I didn't want too go that way cause, they're might been seen as hullabaloo!
A whole lotta people said too many things about that.

As for the aspect of Corruption, Africa is one of the warmest places you can be , ain't place out there in the World without corruption.
Africans are ready to welcome stranger's very fast, you just do your thing. Yeah we have corrupt leaders,but in every piece of bad, there is good in em!

Thanks once more for your additions.

Its not cheap actually to do mining set up for bitcoin. Solar energy is good but its not also cheap and you need a bigger capacity for that too. It all boils down to money again. Equipment and electric consumption are two factors that should be think of. People there might be think of more cheaper way to acquire bitcoin instead such as joining here on forum and learn things, and who knows they could join prominent campaign offering a good amount of btc. Theres a way if really interested to dig in deeper and join.

You took the words right out of my mouth here Bro, OP claims Nigerian for one topped the list of countries that traded p2p, and yet all of those people did not know that they can buy satoshis of bitcoin and not 1 whole Bitcoin Yes, I might agree that Information about Bitcoin or Cryptocurrency, in general, has not really circulated all over but this can be the same for other countries too


I also bet to disagree here. In fact, it is because they know and understand what investing in Bitcoin is that is why they went the way they did ordering the CBN to ban other financial institutions from Crypto transactions because they want to continue to have that grip on the masses, you might think they are ^{"old and outdated"} but those clowns know what they are doing when it comes to depriving the masses.

You left out some challenges :

1. Lack of Internet infrastructure - Most of Africa does not have Internet access, because the private companies are not spending the money in the development of 3rd world countries. (When the Internet was running on Copper (ADSL)... cables were stolen for scrap metal ....now companies are installing Fiber and these same people are trying to steal the Fibre, because they think it is valuable) 

2. Corruption : Most companies wants to avoid doing business in Africa, because corruption levels are VERY bad. You have to pay several bribes to get things done. (Bribes to get tenders / bribes to get licenses / bribes to government officials / Paying for protection.... and the list goes on)

I know what I am talking about, because I worked on contract in Africa and I have experienced everything that I mentioned above. 

No wonder why this is so true because Africa is big land but with poor performance of their Governments they have caused whole lot of chaos. Not just in terms financial services but also development as whole. Imagine so big land and yet it's under developed, they could have bloomed it into higher dimension land. Crypto is like alien tech for them.

I don't think the government's limitation of bitcoin and crypto is because they know nothing or little about the benefits of it. IMO, they are well aware and have made their analysis on the subject and must have seen that it threatens the financial control they have on their citizens and further make less important our already struggling currency. Because these leader are sometimes power drunk and bent on subjecting citizens to control, they have gone ahead to limit and frustrate it's use.

Another reason is the fact that some african leaders are not pioneer thinkers, they always wait and want to follow in the steps of other European leaders. Some African leaders are under the heavy influence of other countries, which is not supposed to be so. They seldom make original decisions.

Agreed! I reckon it might also be a much needed transformation for miners to progress from being more centralized, large mining farms to smaller, independent and decentralized mining hubs. The biggest cause of this transformation would be the increasing energy prices which have began already in Europe and other parts of the world. I speculate it will not stop there and it will only become worse. We should not deny the reality that this will certainly affect the cryptomining business.



Larger Shocks Are Coming With Your Electrical energy Payments

Nearly unnoticed, regional ahead electrical energy contracts for late 2022 and, particularly, for 2023 have risen considerably over the previous few weeks, heralding additional utility invoice hikes. In some circumstances, ahead contracts have set document highs, having surged about 40% over the past two months.

To date in Might, the benchmark German one-year ahead electrical energy contract has averaged 222 euros ($235) per megawatt hour, heading towards its highest ever month-to-month degree, above the earlier document set final December at 207 euros per megawatt hour. Earlier than 2021, the best common for a similar benchmark contract was 83 euros in July 2008.

Source https://easttip.com/larger-shocks-are-coming-with-your-electrical-energy-payments/

I had a discussion today with someone who showed me a website for mining BTCs on phone. I laughed myself to stupor. To make matters worse, one has to provide personal information like ID or passport digits. I bluntly told the person to desist from visiting such a site. It's a waste of time and one's data could be sold on the dark web.
[/quote]

A good of those wanting to get quick Bitcoin, one thing is sure, he'll get he's information exposed to malware attack's.
Folks should do them research before jumping in! Good you cleared that up.

Besides of the "problem" that people often only can buy small fractions of 1 BTC (which becomes a non-issue as soon as people are educated enough about BTC), I think purchasing power differences are generally a problem in so-called "developing" countries (like @franky1 also wrote). A solution may be to offer freelance work for BTC which can be sold globally, this is working quite well in South America for example. Of course this needs knowledge and equipment (a PC) not everyone has in these countries.

I think this is very different depending of the region you're living in. The main problems, apart from financing, are the climate (as you already wrote) which makes cooling more expensive, and grid quality/the risk of blackouts. However, many regions in northern and southern Africa have a big potential for solar energy, which could be used for grid-independent mining farms.

The best locations are seen in this map - in addition to the Sahara there are also excellent regions with probably better (i.e. cooler) climate in Namibia/South Africa and Kenya/Tanzania: SolarGIS Solar Map Africa and Middle East
(dunno why I can't embed it directly from Wikimedia Commons here - is there some kind of blocking active there?)

@franky1 I have been observing your style of writing for over many weeks now and I could see that you are very scrupulous at what you write with enough elaborative context. I like you maturity and the manner you often arrange your words, quite amazing.

I believe that you are more convinced that Africa is a weak continent. Yes Africa is poor, it's crystal clear but you are bringing it to the table in the worse manner. Dude, this is too thick to drop it in this form. You know there are so many non african countries that could be worse than what you have described entirely. You can't compare the entire African continent to the world most successful, richest, developed and well coordinated country like the United States. This is of no match...lol!
America seems to be the greatest when it comes to power, economy, dominance and it will looks unacceptable if you compare with Africa.

You are very correct, FOREX
FOReign
Exchange
It evolves exchange of currencies of different countries which are paired to each other. Just like the way GBP is pegged to USD. With this, we can easily compared them and know their values based on FOREX.
We have other currencies that are paired to USD like; USD/CAD, USD/AUD, USD/YAN, USDNGN, USDGBP etc. The African currencies have no strong value compared to the USD, that is why things always go wrong due to bad governments and lack of quality education.

I rest my case!

This was a roadblock before but not today since you can spend 1 sat/vbyte and confirm in ten to 30 minutes. Some people consider the confirmation time as a limitation.

You mentioned about buying altcoins instead of btc so I'm curious what these alts are. Ethereum is still a very popular chain among developers of new projects and we all know that transaction fees there are insanely high. Won't that be conflicting if they buy erc-20 tokens?

The issue with high transaction fees isn't an exclusivity of african continent. And it wouldn't be a limitation if financial standards in Africa weren't too low... That is the root of the issue. If you have money to invest in bitcoin or to work with bitcoin and earn an income from it, you will have money to pay for transactions fees.

I think the main limitations right now are the financial one, as mentioned, the lack of educational background/understanding on bitcoin usage and lack of access to technological gadgets and devices, which proportionate a much better comprehension and learnship not only on crypto subject, but in every aspects covering technological matters.

If every african had access to internet, a desktop or smartphone, they would easily understand bitcoin can be bought in fractions, while learning how to use an exchange by seeing how it works on practice.

Wouldn't you? What is the reason why so many new projects and already existing projects have to switch or create a bridge to bsc from eth network? If a high transaction fee is not part of the limitation I don't know what is.
It is a major limitation and bear in mind that not everyone has the technical knowledge to use LN or adjust their trans fees as many bitcoiners do. And you are talking about the developing countries where every penny counts, how many people do you think can afford to spend btc daily with such volatility!

I had a discussion today with someone who showed me a website for mining BTCs on phone. I laughed myself to stupor. To make matters worse, one has to provide personal information like ID or passport digits. I bluntly told the person to desist from visiting such a site. It's a waste of time and one's data could be sold on the dark web.

its not just poverty.
even if africans all had a 'living allowance' to cover rent, food and bills. there is still a wide gap between an african with a house and an american with a house.

this is not about a poor african in a tin-shack vs an american in a brick mansion. this is if you compared an african in a brick house with same floor-footage. same sofa same food in the kitchen as an american. it would require multiple times that 'value' of living standard for an african to buy the same amount of bitcoin as an american. even if both people had the same 'standard of life'

this gap is caused by FOREX
the exchange rate.

yep. african income and outgoing's is set at a rate that is lower than americans
even if you can buy a loaf of bread in africa for pennies, in america the same loaf of bread would be valued at more.

so while bitcoin is measured at near $30k where by 0.1 is enough for 2-3 months of living allowance/income in america.. that would equate to years of income/living allowance in africa.

meaning taking years to buy 0.1btc even if they had the same property size and same furnishings and same diets

Access to internet is now  among of the human rights. The countries in Africa are still suppressed by their rights and thereby knowledge and opportunity to become rich country. Not sure why Elon Musk is not doing it on all Africa since he is from Africa, he has Starlink so instead of putting up on other countries why not give his best to the country where he is from.

China had built a field of windmills and solar panel in the desert. Africa should be able to do something like this with Elon Musk help.  Probably enough that they could have mining farms.

Poverty is a huge problem on the African continent, and you can't invest money if you are barely making ends meet and have no extra money, so it is an obstacle to buying Bitcoin. An obstacle which the op missed, I think, is Internet penetration. How are you supposed to use Bitcoin if you don't have Internet access? And in many countries in Africa more than a half of the population don't have it. So serious economic and infrastructure problems must be solved first, and then people might get to use Bitcoin.

I disagree. I've only seen very few people who think they must buy a whole bitcoin and the reason why a lot of people buy shitcoins is because of the promises that shitcoin pumpers give them. Promises that they will never receive from bitcoiners. Fake promises telling them that they are going to become rich since their shitcoin is starting at $0.000001 and is going to reach bitcoin price!!!
This is also not specific to Africans. It's happening everywhere.

This could be solved by investment and effort. It doesn't have to be a massive farm, they could start small by installing some solar panels and import some ASICs and get to mining bitcoin then slowly expand their business if they are good at managing money and their business.
I've seen others do it in poorer countries with far more issues like Venezuela.

Not really considering the fact that 99% of the time bitcoin fees are very low.

I can agree with you that there is a lack of education in many parts of the world, not just Africa about bitcoin. But the possibilities especially on a big semi developed continent are huge. As you can store money easily on a mobile wallet and send it with relatively low fees to other countries with no control whatsoever.
For everyday payments it is maybe not the best because of those fees and the confirmation time.
Maybe you can set up an FAQ website in an African language and guide them how to buy some, because I think many people only learn about bitcoin after their first receive some Sats.

Africa having a population of over 1.4 billion people, surpassing Europe and USA, saw the rapid increase in the usage of p2p  transactions since the Covid pandemic,with countries like, Nigeria, Ghana, South Africa, Kenya and Togo topping the chart. Despite that(Increase in peer-2-peer, usage of digital currencies) they've had some limitations to the utilization of Bitcoin in Africa which have been a pain in the neck for them citizen's! Some of them are Viz ;



•Price / Financial Limitations.
•Enlightenment.
•Banks and Poor Governmental support.
•Ignorance / Information hoarding.
•Education / Basic amenities.
•Ignorance / Information hoarding.
•Mining of Bitcoin.
•Resistance to Change.


PRICE / FINANCIAL LIMITATIONS:

The average African ( Narrowing down to the average Nigeria ) does not have 15 million spare to buy 1Bitcoin, that's because the average african thinks it's a must to buy 1 Bitcoin not fractions of Bitcoin as they're yet to understand that Bitcoin can be bought in fractions  ( Satoshi's ). The price alone is chasing away investors,that's why you see the shift in focus to alternative coins that have lesser value's.

ENLIGHTENMENT:

Assuming, those teaching friends, buddies and pals about Bitcoin can enlighten them bro's that, Bitcoin can be bought in little fractions of Satoshi's rather than telling them to buy altcoins and altnets that will outperform Bitcoin. The information is out there but not properly encoded to be decoded. Shouldn't pay listening ear to influencers who hype a particular project for profit sake.


BANKS /POOR GOVERNMENTAL SUPPORT:

Reasons for merging them both are because, Government controls the bank, so it boggles me to see and hear from folks that banks championed the ban of Bitcoin. Most government in africa care less, as most if not all, are outdated, old standard sniffing scumbags and scavengers who knows few if not nothing about the Benefits of Bitcoin.


EDUCATION / BASIC AMENITIES:

You don't expect folks who've got no good literacy skills to pick up interest for Bitcoin as they'll find it as a very cumbersome load too carry.
Most African countries in Africa can be classified as developing, where in some cases, the poverty rate is about half the the population of a given country.
We've also got electricity and bad networks as one of our challenges and with the income level as per the minimum wage for most africans, those at grass roots are unable to go through like on the pay grade not too think of getting the necessary device to be Crypto enabled.


IGNORANCE / INFORMATION HOARDING:

Like I said , the information might be there but not properly shared or encoded to be decode. Ain't it disheartening when you see and hear people hurdle information about Bitcoin ?
Ignorance plays a key role in the limitation of Bitcoin in africa, as there are hundreds of million People who hasn't heard about Bitcoin.


MINING OF BITCOIN:

Due to weather, and lack of cheap electricity, I think this are another limitations in setting up a Bitcoin mining farm, as getting one down here would cost them huge sum's for Asics, coz they'll thrive in hot ends. Improvisation can be done with the sun for solar energy though.

Some older generations are also over reliant on them local fiat,(Not saying they be scared of new technologies though)as they find it difficult to adapt to change ( older generations )as they find some interface as scam or difficult too keep up with the current trend's. But if Bitcoin can be used in them day to day activities then, then it shouldn't be more hard or complex to utilize.

Will you consider High/ Low transaction fees as a limitation also ? Someone school my ass!