Dogecoin, Ethereum, Litecoin and Bitcoin etc are just a few of the cryptocurrencies we have circulating on the internet today. The growth of cryptocurrencies also known as digital currencies have grown exponentially especially the part that has to do with awareness.
There are certain characteristics almost all digital currency share, some of which include being peer-to-peer, that is one user can transact with a fellow without the need for a central bank. Digital currencies are almost always open source which means there are several developers and enthusiast working on the platform always and finally digital currencies can be divided into several smaller denominations etc.
Of all the digital currencies that is in circulation today, it is safe to say that bitcoin is the most popular. Europe, the United States and China constitute some of the geographical regions where bitcoin use is popular.
The bitcoin digital currency was created by an unknown almost mystical man called Satoshi Nakomoto (people doubt if that is his real name) and has been popular ever since. The foundations of the bitcoin digital currency is simple and can be understood in a matter of minutes.
The currency was created using a mathematical algorithm, these algorithms form blocks while every transaction using the currency is recorded on a public ledger known as the blockchain. Every bitcoin user has an address which can be used to store and send currency.
Users can generate as many addresses as they like and it is generally not advisable to use one bitcoin address for a long time. Due to the open source nature of bitcoin, there are miners constantly working on the currency to make it as safe and secure as possible, miners in return are awarded bitcoin.
One of the industries that will be hardest hit when digital currencies such as bitcoin popularity soar is the banking industry, especially the remittance part of the banking industry. Sending money via traditional money transfer operators doesn’t come cheap and service charges continue to skyrocket.
Whereas with digital currencies, users can purchase currency online and forward it to their loved ones at little to no cost. Combine that with the ease and convenience and it is easy to see how digital currencies can give international money transfer operators a run for their money.
Cyptopcurrency popularity can also simplify the movement of capital into Africa. Investments, freelancing and startups stand to benefit from the popularity and usage of cryptocurrencies.
The development of cryptocurrencies have made a lot of central banks across the world jittery, African central banks no less. The uneasiness on the part of central banks have to do with their inability to regulate cryptocurrencies.
For example Kenya’s central bank (CBK) released a statement warning Kenyans of the dangers associated with using digital currencies such as potential loss of investments and how digital currencies is used to fund terrorism and money laundering.
Technology has revolutionised a lot of the things we have around us. From electronics to transportation and security.
Cryptocurrencies is getting ready to disrupt our view of fiat currencies and take our understanding of the very concept of money to another level. The new wave of fiat money is cryptocurrency, therefore central banks have their work cut out for them.
Conversation of how to incorporate cryptocurrency in our daily lives is brewing on. Bitcoin in Africa is still in its early days, we can’t wait to see the developments cryptocurrencies will bring to Africa.