Bitcoin and the African demographic explosion

[dree12]

I recently read about Africa's coming population explosion. What's more, the generation that will soon become the working force was mostly raised in relative poverty and high child mortality. They will consequently be the "cream of the crop". Many of them will lack proper education but have great intelligence nonetheless. A poor and uneducated, but intelligent demographic seems like the perfect Bitcoin success story.

There are, unfortunately, problems. Internal unrest, totalitarian governments, and militant groups are active in many parts of the continent. Even in Equatorial Guinea, Africa's richest country, violence is common and governments are corrupt. The risk of excessive government regulation seems almost inevitable. Moreover, Internet access remains sparse in Africa, especially in slums and rural areas.

But Africa has great potential. The African Union, following its European counterpart, has gained traction recently and will soon create the world's second-largest democracy, after India. With universal suffrage comes greater freedom and peace. Religious and ethnic feuds, although still rampant, are also set to decrease to acceptable levels. In 1990, a massive genocide in Rwanda claimed almost a million lives. Twenty-three years later, most are confident such an event will never again occur.

African governments likely do not worry about Bitcoin now, as it is still small. But as it gains traction, it cannot be ignored. If a democratic African Union votes to embrace Bitcoin, thereby bringing its low management costs, transaction fees, and reduced waste, both Africa and Bitcoin stand to benefit. The daily lives of what will eventually be 22% of the world will be improved.

Many claim that the demographic explosion helps Africa none, and will only fuel conflict, war, and totalitarianism. Indeed, recent losses for democracy in Egypt seem to cement this position. But perhaps there is a saviour in Bitcoin. In this time of change and challenge, Bitcoin will not only nullify the boom's demerits but also bring out the boom's benefits. With Bitcoin's help, Africa's coming population explosion will recall the Baby Boom: affluence and prosperity.

[1715119083]

1715119083

[1715119083]

1715119083

[Adrian-x]

Just picking up a few bits here and there, there seems to be a supply problem in Africa. The exchanges in South Africa have very low volume and charge in excess of 10% the going rate.

While Bitcoin is a good fit, for the likes of Zimbabwe, Africa needs to export a lot of wealth (or migrant labour) before XBT finds its way over there.

[countryfree]

A good point also is that millions in several African countries are used to the idea of exchanging money with their mobile phones. That's the M'Pesa system, it's very big in Kenya, but I fail to see how bitcoin could help Africa in any way.

You can still have corruption with bitcoin, and there won't be any change in management costs or transaction fees. African banks have much lower fees than we're used to in rich countries.

[semaforo]

   Yes, nice observation. The core of the issue is the nation state. States in Africa were set up by colonial power to manage resource extraction. When they handed authority over to Africans in the independence movement, the structure of governance basically remained the same. If African leaders fork over the resources, they get compensated with money and weapons that they can use to keep the resources flowing. This has led to very autocratic regimes and ruthless dictators. When Mali started to collapse recently, the French sent troops in to make sure the nation structure stayed in effect.

   A big part of the power of nations is their currency. When I took my first political science class, my professor said, if you want to know what the flows power look like, follow the money. Bitcoin simply does undermine national currencies, because it is actually fundamentally better than them. This is abundantly clear in the short term in Africa, and will be abundantly clear in the long run in the whole world, insha'Allah. This puts national governments in a conundrum, because in a liberal democracy the legitimacy of the government depends on their ability to generate economic growth- unemployment leads to unrest and destabilization of government. Bitcoin will lead to fewer capital controls and therefore more economic growth, so countries can't really ban it- plus, they can tax a lot of the surplus generated, making up for some of the income lost from their ailing national currencies.

    The case is different, like you say, in more totalitarian countries where the governments stay in power through violence rather than appeasing the masses. Capital controls are one method of these countries to maintain their power. People have been saying Africa Unite! for a long time- and why hasn't Africa united? Because a small group of people make tons of money maintaining colonial states, and maintain those states using violence and weapons provided by their former colonial masters. By taking capital controls out of the picture, one very important tool in the maintenance of modern states is removed.

       Kipochi is a good way to get people started, and this is their intention. Once people figure out that bitcoin does work, they will learn how to do it independently too, and it will be used to finance all sorts of movements that would've been impossible before. It is going to completely shake up the world and there will be a redistribution this means great losses for some and great gains for others. Africa stands to benefit greatly.

  The key part of this equation is internet technologies utilizing the airwaves used for TV being applied to mobile internet.

[countryfree]

Note that many African countries don't have a national currency, they use the CFA franc.

more about it here: http://en.wikipedia.org/wiki/CFA_franc