Why are Africans not using cryptocurrencies?

[jamesndungu1]

Africa is a developing continent, and despite the world leading search interest for cryptos, the continent still lags behind the rest of the globe in everyday cryptocurrency use and adoption. The continent is home to over 50 percent of the world’s mobile money services, but while the use of internet has risen exponentially in the past twenty years, users from Africa account for just ten percent of the global total. I can personally attest to the challenge of internet connections across Africa. The connection is either poor, slow or even non-existent at times. At times, accessing internet on your handset for the mere purpose of communicating with people or even carrying out transactions becomes a challenge, and this is one of the reasons why most people in Africa are not as enthusiastic about cryptocurrencies.

Some governments have been skeptical and reserved and, in some cases, unreceptive to the use of digital currencies. Countries such as Zimbabwe and Namibia have reportedly begun with a hard stance, and in Kenya, the central bank of Kenya has restricted the use of digital currencies because of their unregulated nature. Nigeria’s Central Bank has rejected the use of cryptocurrencies claiming that its citizens will be at risk of fraudulent schemes, but it is yet to release a whitepaper on their take.

https://www.dailymaverick.co.za/article/2019-04-08-blockchain-and-cryptocurrency-regulation-in-africa/

Another factor that holds back cryptocurrency use in Africa is that very often you will see Initial Coin Offerings targeting countries from literally all other continents BUT Africa. In cases where African countries are receptive to the idea of digital currency, most governments are slow with its adoption mainly because they fear for their young citizens or due to the crop of old leaders who cannot picture a future without paper cash.

https://www.africa.com/cryptocurrency-regulation-africa-slowly-picking-up-the-pace/

Adoption of cryptocurrencies is a work in progress for most African nations, but with time it could become the most used method of payment. I live for that day!

[Raja_MBZ]

Strange. Can you provide the source of the following?

"The continent is home to over 50 percent of the world’s mobile money services"

This percentage looks quite exaggerated. Africa is quite behind other continents when it comes to the usage of the internet (even in 2019):

[jamesndungu1]

Strange. Can you provide the source of the following?

"The continent is home to over 50 percent of the world’s mobile money services"

This percentage looks quite exaggerated. Africa is quite behind other continents when it comes to the usage of the internet (even in 2019):

There are two things here; Mobile Money Services and Internet Penetration.

In Kenya for example Mobile Money Services has penetrated 96% of households, https://www.cnet.com/news/kenya-mobile-money-vodafone-mpesa-10-years/ What we refer as Mobile Money Services is MPESA (M-Pesa is a virtual banking system that provides transaction services through a SIM card - NO Internet is Required). According to a recent report https://www.gsma.com/r/wp-content/uploads/2019/02/2018-State-of-the-Industry-Report-on-Mobile-Money-1.pdf There are 395.7 million registered mobile money accounts in the Sub-Saharan African region as of December 2018, representing 45.6% of the global figures.



We don't use the internet for mobile money services .... And most Cryptocurrency projects require internet connections at some point such as installing wallets, processing transactions etc.

[Raja_MBZ]

~snip~

What we refer as Mobile Money Services is MPESA (M-Pesa is a virtual banking system that provides transaction services through a SIM card - NO Internet is Required).

~snip~

We don't use the internet for mobile money services .... And most Cryptocurrency projects require internet connections at some point such as installing wallets, processing transactions etc.

That makes perfect sense. So it seems like that you guys are using these mobile money services for transactions (and other activities) through SMS/messaging and phone call methods. Even though the transactions of cryptocurrency require internet, I know a few projects which are working to make the stuff internet-free and let the users transact on SMS (such as the following project):

Transact Bitcoin Cash Through SMS Text Messages

However, the major issue with such an approach is that it requires a 3rd party, which ruins the taste of a p2p system.

[dengpei]

Africa is a developing continent, and despite the world leading search interest for cryptos, the continent still lags behind the rest of the globe in everyday cryptocurrency use and adoption. The continent is home to over 50 percent of the world’s mobile money services, but while the use of internet has risen exponentially in the past twenty years, users from Africa account for just ten percent of the global total. I can personally attest to the challenge of internet connections across Africa. The connection is either poor, slow or even non-existent at times. At times, accessing internet on your handset for the mere purpose of communicating with people or even carrying out transactions becomes a challenge, and this is one of the reasons why most people in Africa are not as enthusiastic about cryptocurrencies.

Some governments have been skeptical and reserved and, in some cases, unreceptive to the use of digital currencies. Countries such as Zimbabwe and Namibia have reportedly begun with a hard stance, and in Kenya, the central bank of Kenya has restricted the use of digital currencies because of their unregulated nature. Nigeria’s Central Bank has rejected the use of cryptocurrencies claiming that its citizens will be at risk of fraudulent schemes, but it is yet to release a whitepaper on their take.

https://www.dailymaverick.co.za/article/2019-04-08-blockchain-and-cryptocurrency-regulation-in-africa/

Another factor that holds back cryptocurrency use in Africa is that very often you will see Initial Coin Offerings targeting countries from literally all other continents BUT Africa. In cases where African countries are receptive to the idea of digital currency, most governments are slow with its adoption mainly because they fear for their young citizens or due to the crop of old leaders who cannot picture a future without paper cash.

https://www.africa.com/cryptocurrency-regulation-africa-slowly-picking-up-the-pace/

Adoption of cryptocurrencies is a work in progress for most African nations, but with time it could become the most used method of payment. I live for that day!

For a number of years now news to do with Bitcoin, blockchain and cryptocurrencies in Africa have been greeted by widespread fears and skepticism. This has been perpetuated by the possibilities that virtual currencies can be manipulated towards crime, tax evasion and money laundering.
However, as more information is beginning to filter through African communities as well as the availability of testimonial enlightenment being administered by those who dared to try cryptocurrencies to their peers, more people are increasingly embracing cryptocurrencies.
The continued collapse and institutional abuse of weak fiat currencies in a number of countries have also assisted the rise of blockchain based currencies as people are trying to preserve the value of their wealth and earnings.

In short, some of the barriers ahead of Crypto in Africa include:
- Internet Connectivity issues
- Lower literacy levels in some countries
- Internal conflicts (civil wars, coups, revolutions, etc.).
- Low-income levels

[paxmao]

Adoption of cryptocurrencies is a work in progress for most African nations...

May be because everything in there is black market.

Sorry, I just could not avoid the joke.

[CryptopreneurBrainboss]

I'm an African and here's a personal experience why I got discourage from using cryptocurrency for my day to day activity. I was very active using it (mostly bitcoin) some time between 2017/2018 and early 2019 at any given opportunities i got. I used BTC to pay for my internet & cable charges, grocery & gadget shopping etc but notice some disadvantage. The service providers aren't encouraging the use of these cryptocurrency. The fees they charge for a start, are outrageous, sometimes you can pay double the amounts or 20-50% more using bitcoin. The items are very expensive to the extent you'll have to second your decision especially as they are tagged in BTC/$ and when you convert that dollar value to your local currency you get the disadvantage due to the price cost of those items then secondly, their exchange rate.

The most common used of cryptocurrency (bitcoin) in Africa is as an investment vehicle and trading platform for profit. Any African in the space can attest to that. The home based exchanges too aren't encouraging the use of their service that's why we rely/patronize foreign based exchanges. Personally I used Binance for trading and Luno for easy convertion of my bitcoin to local currency, both service providers aren't home made and are very popular in the country. The other popular servicee are Peer2peer which aren't that reliable and fast.

The internet charges is also another disadvantage although, many enthusiast including myself still overlook this disadvantages and uses bitcoin for the privacy and self satisfaction it gives. We're still far behind although there have been improvement especially as foreign service providers are coming into the continent and hopefully bringing in friendly competition which will result to we (the customers) getting a fair share of what other continent are experiencing.

[Daniel91]

I can't answer for all Africans but I have some friends in Uganda.
They really live in very difficult conditions, without electricity, water, and Internet only in the big cities but not all the time.
Until they solve their infrastructure problems, I don't think they will be able to use cryptocurrencies as much as we do.

[posi]

Speaking of Africans not using crypto. It depend on what you really mean because Africans does use cryptocurrencies but not all Africa country though and the uses of cryptocurrency in daily activities still have some issues which are not encouraging and with good crypto card that shouldn't be a problem.

[carter34]

I think the caption is not really the way it should be. If it appears the way it is, it means every individual citizen of a particular continent is cryptocurrency and we know that is not true. It will become a fallacy to agree to that because at least if it is on record that all youths in that continent use it, then what about the aged?

In other words, I think every continent has its issues as per the usage of cryptocurrency.

[Willitivity]

Africa as you rightly pointed is a developing continent. But saying they don't use cryptocurrencies is not entirely true. Over the last years, some African countries, Nigeria for instance has shown a continued support for cryptocurrencies especially Bitcoin. Even though there are few services here which accept bitcoin. The slow growth rate of crypto adoption is also attributed to the environment. There's a gross lack of facilities that will facilitate the day-to-day usage of Bitcoin.

[carter34]

The connection is either poor, slow or even non-existent at times. At times, accessing internet on your handset for the mere purpose of communicating with people or even carrying out transactions becomes a challenge, and this is one of the reasons why most people in Africa are not as enthusiastic about cryptocurrencies.

This is not the fact. There is not correlation between network connection or communication to cryptocurrency transaction. Yes, it is based on network but that is not the hindrance. The hindrance is as same everywhere in the globe about cryptocurrency. The fear of crash, bubble stories and lagging in legislation for usage and acceptance.

[Jet Cash]

Perhaps the move to facilitate Bitcoin transactions over software controlled radio will help the spread of crypto in Africa.

[Macadonian]

This is not the fact. There is not correlation between network connection or communication to cryptocurrency transaction. Yes, it is based on network but that is not the hindrance. The hindrance is as same everywhere in the globe about cryptocurrency. The fear of crash, bubble stories and lagging in legislation for usage and acceptance.

If you are generalizing Africa then this is not true however if you target specific parts of Africa such as West Africa then it is in fact correct. There are a lot of internet black spots in Africa because they do not have the infrastructure to accommodate internet.If we look at South Africa or even the north then its a completely different story as they have the capable infrastructure which is available to the masses. 

[franky1]

africans using bitcoin is super small. not only due to internet. but also the transaction fee
africans using cryptocurrency is a little more. still limited by internet. but not so much by transaction fee
however due to the ease of SMS africans have a high use of 'digital' currency such as M-pesa requiring no internet

everyone knows i de-test LN due to it not being a blockchain and having to vault up and eventually custodian/co-partner authority).

but a niche that LN can fill is that when someone locks up their bitcoin asset for a month. they can be given a open session LN UTXO of msats which they can then SMS directly with their channel partner during the month, without needing the internet.

the only thing they need to do is SMS a agreed close session with a 'factory'/watchtower(3rd party) to close the session and re-issue an open session (broadcast onchain).

though this means relying on a 3rd party to be custodian/manage the onchain stuff. the users can end up just SMSing payments without the need of the internet

but for emphasis the whole channel partner/custodian problems is my concern as i personally am a 'if you dont hold the only private key the funds are not yours alone'

that said m-pesa is where a phone company holds the real value and people are just telling the phone company who deserves what, and the phone company is the custodian. .. so it aint much of a change..
(m-pesa users dont actually own the value, they just have authority to choose where it goes)
LN 'factory' can distribute a central control of just 1 phone company to become hubs of many 'factory/watchtower' custodians

but its still not as secure/trusted/independent as real blockchain assets
again emphasis on the whole point of blockchains is independant asset ownership, which LN and 3rd parties do not offer

[squatz1]

Strange. Can you provide the source of the following?

"The continent is home to over 50 percent of the world’s mobile money services"

This percentage looks quite exaggerated. Africa is quite behind other continents when it comes to the usage of the internet (even in 2019):

+1 here. You're not going to be able to use Crypto if you're unable to use the internet.

You're also not going to be able to use the traditional methods of transfer that are taken for granted in the US --> Look at Venmo, Cashapp, Zelle, etc.

Africans can only begin to use Crypto when they have heap, free, and plentiful internet. There's no other way for them to use this tech without it. Now we can sit here all day long and debate if you can use 'crypto usb sticks' or something along those lines.

But we have to push internet to them first.

[UserU]

+1 here. You're not going to be able to use Crypto if you're unable to use the internet.

You're also not going to be able to use the traditional methods of transfer that are taken for granted in the US --> Look at Venmo, Cashapp, Zelle, etc.

Africans can only begin to use Crypto when they have heap, free, and plentiful internet. There's no other way for them to use this tech without it. Now we can sit here all day long and debate if you can use 'crypto usb sticks' or something along those lines.

But we have to push internet to them first.

While Internet is one thing, the awareness and adoption is another.

For instance, Internet access in my country (not Africa) is plentiful but then, cryptocurrency adoption remains low. Only 3 exchanges were licensed so far.

However, we're slowly opening up to e-Wallets.

[CristianOff]

The main reason africa doesn't use cryptocurrencies is because of the DIGITAL DIVIDE

No matter what sources you find on how many people use mobile phones there, you have no clue how
bad certain things are in most of Africa until you visit it. I know it sounds strange and you won't believe
me unless you see with your eyes. The number of smartphones is very low as well as the number of workstations,
however africa is growing and I think it's going towards the right direction  


In terms of Digital Divide, Africa is the most disconnected worldwide. I recommend you to visit any of the
red locations on the map. There is one with 97% of its population offline

[Kakmakr]

One other factor that might influence the use of Crypto currencies in Africa are the already established digital payment option that are used, namely : M-Pesa.

Vodafone now offers M-Pesa services in 10 countries: Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Kenya, Lesotho, Mozambique, Romania and Tanzania. Source : https://www.vodafone.com/what-we-do/services/m-pesa

https://www.researchgate.net/figure/Summary-Statistics-of-Transactions-at-M-Pesa-Agents_tbl1_228292847

So, Bitcoin and other Crypto currencies are competing with a already established digital payment option that are widely used. It also does not require you to do this on expensive smart phones and it is very fast.

When you introduce a new payment option, people should understand why the new "decentralized" option is better than what they currently have in a centralized payment option and nobody are educating them on those facts. 

[mrquackquack]

Well I think, that crypto isn't more widely spread in Africa than what it is in other parts of the world because Africa doesn't seem to have the same items that are associated with crypto and things of that nature. I.E. computers, internet, mobile phones, technology so on and so forth. There are some places where it may be up to speed but there might be some places not so much. Also the mass adoption of crypto will never be if people don't even know what it is. People in Africa especially the younger generation have to start talking about it and implementing technology to where they may turn around their current state in Africa.