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Bitcoin is an innovative payment network and a new kind of money. It uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network
It’s been declared dead countless times in the West, but in Kenya’s start-up scene Bitcoin is all the rage.
In the Western world, to say that the crypto-currency Bitcoin has publicity problem is to put it mildly.
For years journalists covering the tech industry have been proclaiming that Bitcoin, as a currency, is dead. But in Africa, Bitcoin’s future is looking up.
A number of start-up companies in Kenya have been attracting investment in the hopes that Bitcoin could be a new answer to an old problem: the high cost of sending remittances.
It uses its own network to carry out money transfers without any central authority or banks.
Kenyan start-up BitPesa claims it can send Bitcoin to Kenya for a mere three percent – considerably cheaper than a company like Western Union.
“In the US, when people want to buy bitcoins they have to wire their money using a bank, and it takes a couple of days to get your funds into an exchange. But in Kenya I don’t have to use a bank – I just use my mobile phone,” he said.
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Not everyone is convinced Bitcoin will have an easy time breaking into the African remittances market.
Bitcoin can be a difficult concept to understand, Kimani acknowledges, and its global reputation does not inspire confidence.
Gareth Grobler, CEO of the South African Bitcoin exchange ICE3X, pointed out that well-established companies like Western Union still had a major advantage when it came to trust.
It’s lack of liquidity right now, he added, would make it difficult for a start-up to scale up.
Bitcoin could help Nigerians pay for things online, said Grobler, allowing international companies to safely tap into a vast market.
“No company in the rest of the world is going to say no to someone paying them with Bitcoin, if they’ve got a payment processor like BitPay,” said Grobler.
The idea behind Bitcoin, he insisted, was far from dead.. (All credits to Hilary Heuler)
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