Beyond speculation, real-world use of Bitcoin is booming in Africa

Critics have long claimed that Bitcoin’s only usefulness is speculation. Nonetheless, this data paints a very different picture, one conveniently missed by those who have declared Bitcoin dead hundreds of times.

Bitcoin and cryptocurrencies have gained a lot of traction in Argentina, Venezuela, Africa, and other parts of the world, where cryptocurrencies are used as a hedge against currency devaluation. In Africa in particular, Bitcoin usage is booming.

Despite weak local currencies and complex bureaucracies driving people towards Bitcoin, Africa’s young and tech-savvy population is finding it easy to quickly adapt to Bitcoin.

Although central banks continue to warn that cryptocurrencies are not legal tender and investors are not protected, this has not stopped the enthusiasm of users and investors.

South Africa, Nigeria and Kenya are hotspots for Bitcoin on the African continent. In Nigeria, small cryptocurrency transfers totaled about $56 million in June, up nearly 50% from a year ago. The country's transaction volume also jumped more than 55% to 120,000.

According to Chainalysis, a cryptocurrency tracking and blockchain analysis company, the amount of cryptocurrency transfers in Africa reached $316 million in June this year, an increase of more than 55%. The number of monthly transfers also doubled to more than 600,700.

Abolaji Odunjo, a mobile phone seller in Lagos, Nigeria, found that his profits increased significantly after he started paying suppliers with Bitcoin. He gets mobile phones and accessories from Chinese suppliers, who require payment in cryptocurrency for speed and convenience.

“Bitcoin has helped protect my business from currency devaluation while allowing me to grow my business,” Abolaj Odunjo told Reuters. “You don’t have to pay extra and you don’t have to buy dollars.”

Nigeria, the continent's largest economy, is oil-reliant and its central bank has devalued its currency, the naira, twice this year due to low crude prices and the impact of the pandemic.

The naira’s devaluation has prompted Nigerians to turn to Bitcoin, as reflected in trading volumes on the Lagos exchange BuyCoins, which more than quadrupled to $21 million in June after the naira’s devaluation in March.

Another exchange, Yellow Card, also saw its monthly cryptocurrency trading volume surge fivefold in 2020 to $25 million last month. On the trading platform of Luno, one of the world’s leading digital currency companies, bitcoin trading volume in South Africa and Nigeria increased by half to $536 million.

Bitcoin is booming in Africa, driven by remittances sent home by migrant workers and payments to small businesses. "People are very willing to accept any technology that makes their lives more convenient," said Frankline Kihiu, a cryptocurrency broker in Nairobi, Kenya. "In most African countries, Bitcoin eliminates many government restrictions." (Baijiahao)