Is Cryptocurrency the Solution to Africa’s Banking Challenges

By Guest Author
March 8, 2019 Updated March 8, 2019
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Over the years, bitcoin has evolved into something we never thought it was going to be. It became this juggernaut of a cryptocurrency. It reached all-time highs that no one expected. Somehow, the volatility of bitcoin’s price both became an advantage and disadvantage of bitcoin.

It became a disadvantage because it scared away investors and potential newcomers to the industry. It became a problem for investors because the volatility made it seem like it was a risky investment.

It became an advantage because now, there are hundreds of ways to buy bitcoin. The answer to “how long does it take to buy bitcoin” is now very different from what it was years ago. Now that bitcoin is 10 years old and booming. More and more different payment methods pop up every day. This not only acquiring bitcoin faster, but it also makes it easier. But despite all these, there’s one advantage of bitcoin that really puts it over the top: the ability to help the underbanked.

Africans and the Banking Issues That Surround Them

If you’re living in the United States, you’re probably used to doing most of your financials through a bank. This includes normal things like loaning, saving, sending money, etc. The thing is that not everyone has this privilege.

In places struggling economies like Africa, the population of the unbanked is staggering. According to an article on Oxford Business Group, 23.5% of the African population don’t have bank accounts. An estimate of around 1 billion US dollars is held in cash outside of banks. Adding to that, African countries are experiencing an increase in the inflation rate. That can cripple their fiat currency.e experiencing an increase in inflation rate. That can cripple their fiat currency.

How Bitcoin and Other Cryptocurrencies Help Africa’s Cause

Despite all of the economic struggles that Africa is in, they still continue to show their strength. They find creative solutions to their problems. There is one creative solution that comes to mind: peer-to-peer finance. It’s important to understand that when it comes to peer-to-peer finance, bitcoin is only a building block. Peer-to-peer finance is the big picture and it’s what’s creating solutions for Africa’s problems. It has revolutionized the way we control our money. It’s the ability to break down barriers and make an honest living are what makes peer-to-peer finance so special.

When it comes to peer-to-peer finance, there are many real-life uses and Africans are taking full advantage of this. People from all over the world are learning from what the Africans are doing with peer-to-peer finance. Here are some of peer-to-peer finance’s real-life uses:

Making Payments

For people who live in the United States, buying things online and making payments is easy. Everyone has a debit or credit card that they can use to make those payments. It’s easy and efficient but it’s not like that everywhere in the world.

Africa, for one, struggles with making these kinds of international payments. Not only are there transactions fees for sending money around the world but there are also limits set on how much you can spend. For example, the spending limit on Nigerian debit cards is $100. That’s way too small if you’re looking to take full advantage of online markets. Thanks to peer-to-peer finance, there is a workaround to this problem: online shopping with bitcoin. As said earlier, using bitcoin has evolved. There are now hundreds of ways to buy and sell bitcoin available. Thanks to these peer-to-peer marketplaces. To work around this problem, Nigerians go on peer-to-peer marketplaces. They buy bitcoin and sell them through a  payment method like AliPay or PayPal. With the AliPay or PayPal funds that they accumulate, they can then purchase whatever they want. If you used AliPay as your payment method, you can use AliExpress to get your products.

Earning an Income

Peer-to-peer finance has changed the way bitcoins are sold, bought, and traded. Peer-to-peer marketplaces add a personalized touch to the trading experience. With more control given to its buyers and sellers. Buyers can filter out offers themselves and sellers can set their own preferences.

The best thing about trading bitcoins on peer-to-peer is that the price doesn’t matter as much. This is something that the Africans have figured out. They are constantly trading, converting their bitcoin into different forms over and over again, making a profit. Africa continues to lead the way of the new bitcoin revolution.

Wealth Preservation

This is a real-life use that helps struggling economies. As said earlier, Africa is experiencing a high percentage of inflation. They use bitcoin as an investment. That way, they protect their wealth from inflation. It’s unfortunate for countries to see the value of their fiat currency diminish more and more every day. An example of a country that’s experiencing these problems in Venezuela. According to Trading Economics, the annual inflation rate of Venezuela jumped from 2.69 million in January 2019. As their currency inflates, they need to find a way to preserve the value of their wealth.

The Wave of Ingenuity and Creativity

If anything, the African bitcoin community has shown us that there’s always a way to minimize restrictions. They also show us that a peer-to-peer revolution is starting. Bitcoin is not only used for profit anymore but also for survival. It’s showing us that it’s more than an investment tool with an end goal of buying a Lamborghini. It’s showing us that it has the potential to help millions of people around the world. It’s showing us that the peer-to-peer finance revolution is starting, giving us a new way to use our money. Most importantly, it’s showing us that everyone has the power to control their own finances.

We could all learn a thing or two from what Africa is doing. Their creativity and ingenuity are helping them control their own finances. They are utilizing Bitcoin to their advantage and they are making more money in the process.

Now that the peer-to-peer bitcoin revolution has begun, are you in or are you out?

This author could be anybody, but he/she is not a member of staff and opinions in the article are solely of the guest writer and do not reflect Coingape's view.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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