10 ways Kenyans can directly benefit from Bitcoin

Written by
  • 5 years ago
  • Posted: September 8, 2014 at 10:47 am

Guest post

For a related post read: Six reasons why we must popularize bitcoins in Kenya

Bitcoin is a new way of money transfer over the internet, a platform for building financial services, a decentralized network, a currency and a whole host of other things. This groundbreaking innovation has taken the world by storm and is gradually gaining traction beyond its nerdy origins.

“From Bangla-Pesa to bitcoin, Kenyans’ love for alternative money goes global”

– Title of a Daily nation article from earlier this year. Since Bitcoin has made its way into Kenya, I dug deep into the subject to unravel the numerous benefits that Kenyans both young and old can tap into directly. This is a short list of 10 ways that I found out.

  1. Working online? Get paid in 5 mins from anywhere across the world straight into your phone!

The unique design of Bitcoin allows people to instantaneously send money over the internet for almost no fees to and from anywhere around the world. Young Kenyans working online or outsourcing projects from international clients often have to pay high fees in money transfer and FX conversion fees. On top of that, they have to wait for days to receive their money. Worse still, some have to queue at a bank/ATM to withdraw money. Bitcoin lets you be your own bank. You receive money from ANYWHERE in the world in 5 mins straight into your phone from the comfort of your couch. Just like regular email.

  1. Diaspora remittance to families in Kenya

According to the Central Bank of Kenya and the World Bank, Kenyans working and living abroad sent home 111 billion KSHs annually. Unfortunately, they are subjected to high fees in transfer (10%) while having to wait for days to cash out. The situation is grim for East Africans sending money within Kenya, Uganda, Tanzania and Rwanda – where fees incurred is at a staggering 25%. Bitcoin completely does away with all these hurdles by introducing a fast, efficient and non-discriminatory channel of sending and receiving money. A Kenyan company, BitPesa is already doing this for Kenyans in the UK sending money into East Africa. It takes 5 minutes and costs a flat 3% for a person to receive money into their M-Pesa/Airtel/ Orange money account from the United Kingdom.

  1. Kenyan  entrepreneurs and businesses doing business across East Africa, Africa, China and the world can pay and get paid easily

The way money moves from one country to another has been a complex web of networks that take up high costs in time and money. The system adds friction into commercial activities and business transaction. Increasingly, entrepreneurial Kenyans are buying and selling goods from China, Dubai and into East Africa. Since these are cross border transactions, paying and receiving money incurs significant costs. The banking networks that exist to transmit money from Nigeria to Kenya, or Kenya to China are disconnected and add time and heavy costs into transactions. Bitcoin drastically improves on this by making transactions instant and significantly lowering fees. It doesn’t matter where two people are – just like email, once you press send, the other person receives funds on their end. Wanabiashara can tap into this when doing business with partners in Dubai, China, the UK, South Africa, Rwanda, the Philippines and everywhere, anywhere.

  1. Kenyan artists of all forms can now monetize their expressions in a global marketplace

The booming music industry in Kenya is a testament to the creativity of young people in and artists in our country. From Juliani, to Kenyan Poet Clifford Gachagua, blogger Sharon Mundia from ThisIsEss – the burst of creativity in Kenya is glaringly obvious. The success of these individuals proves the viability of creative talent and Getting Paid! Bitcoin helps creatives monetize their work not just from Kenya, but from anyone across the world. If you can take a beautiful snap and attach a bitcoin address to it, anyone who appreciates your work can send you money by just viewing the picture. How?

Here is a bitcoin wallet address – think of it as purse/wallet/email account online.

Bitcoin Address

This address is converted into an image known as a QR code.

QR code

Placing this image anywhere within your work – a music video, a painting, a photo, poem, script, writing etc allows a fan from Rwanda to scan the image with their smartphone and instantly send you some money!

I’ve personally tried it and it has worked for me. I placed my address on a blog profile and some anonymous grateful reader was kind enough to tip my blog post. I won’t say how much, but the experience was incredible!

  1. Buy online content from online stores  – music, movies, books, software, apps

It is great that we can now buy apps from Kenyan developers using airtime thanks to a recent partnership between Safaricom and Microsoft, however. Buying virtual goods – books, apps, music, movies from online stores such iTunes, Netflix, Ebay, Amazon books and non- Kenyan stores is a bad experience. The experience poses security risks for consumers entering personal data online. More than one time, I have wanted to buy ebooks online but gave up midway through an endless process that dragged on into weeks.  Why can’t I just pay with my mobile phone from the comfort of my bed? – that is what I would like.

Well, it turns out with Bitcoin you can! Buying stuff online is a lot easier with Bitcoin and bitcoin ecommerce services. The process is quick, smooth and feels just like sending a text. I’m an avid House of Cards fan; paying for a live stream premier is a fantastic thought.

This opens up doors for us to tap into products online for our projects, business, work, play, school etc If you can find something online that excites you – like a wordpress theme I purchased recently for my blog – you can now easily pay for it from your phone/tablet/computer using Bitcoin services.

  1. Forex traders in Kenya

In the course of my life I have come across diverse entrepreneurial Kenyans exhibiting youthful energy, drive and ambition. Kuhustle aptly captures this character. A number of my forex traders friends in Kenya work online from home, earning a living through  trading global financial markets – gold, binary options, foreign currencies.

Bitcoins are considered as both a currency and a digital asset. If you are a Kenyan forex trader, what this offers is an alternative currency and asset that you can trade just like other forms of trading. Looking at these charts, the market platforms closely resemble traditional trading platforms – market participants, order book, buy and sell options, long and short positions, leverage and [more financial jargon]. What’s more? There is low barrier to entry and low trading fees. You don’t need to find a broker to sell you bitcoins – you can buy/sell bitcoins from a friend, or someone willing to sell/buy without having to go through an exchange

I also happen to have a background in trading global markets. In one and a half weeks, I made 15% on 100,000 KES (15,000) when the price of Bitcoin gained 15% from its lows over that period.

Currently, there are 4 bitcoin exchanges in Africa – Ghana (Kitiwa), Kenya (BitX), South Africa (ICE3X) Namibia (BitX) and BitQuick in Egypt. Plenty more Bitcoin exchanges around the world have sprung up.

  1. Kenyan farmers in agricultural exports – Cooperative Unions, farmers groups

If you live in Kenya and watch the news or read the dailies, this headline comes as no surprise ‘Tea farmers’ payment delayed’Coffee union up in arms over delayed payments’. Kenyan tea farmers bring in a whopping 114 billion KES worth in tea exports to markets abroad. Individual farmers and farmers’ Cooperative Unions receive payments through payment networks that take weeks to get cash into the pockets of farmers. Buyers from abroad making payments have to use up to 3 banks for money to finally get to the bank accounts of farmers. This delay is a significant cost on the farmers who rely on tea revenues. Because of the way banking networks work, money cannot be sent directly from the US buyer directly to a farmer in Kenya. The funds take days moving through banks in Europe and the US. At each stage, costs are incurred in conversion fees, forex margin fees and correspondent fees. This eats into the overall sum due to farmers and additionally delays payments.

Bitcoin, and digital currency technologies such as Ripple & Stellar, make it possible for monies of any size – large values and small values to be sent from one country to another in 60 seconds. This means that farmers can forget about delayed payments and expect their incomes immediately a sale is completed. Not only do farmers benefit, but the overall Kenyan economy gains tremendously from this injection of efficiency.

  1. Ultra low cost of financing businesses and entrepreneurs

Setting up a business in Kenya today can be a pain. On top of all the bureaucracy one goes through to get set up, financing the business is an upheaval for aspiring entrepreneurs. Acquiring a loan to start a business or expand an existing one costs upwards of 15% in interest. For some aspiring entrepreneurs, the pressure of repaying interest on a loan deters risk taking that could bear more revenues.

Bitcoin is a platform that allows entrepreneurs and small businesses access to credit at costs as low as 1% interest rates. By tapping into a global credit market and capital from willing lenders in another country, the cost of a loan is significantly reduced.

Mutuku, a maize miller in Githurai has been getting a lot of business at his posho mill. He owns one machine that can only mill so much maize. Of late, he has had to turn customers away because of his limited capacity. The solution is obvious to him – buy a new machine and get more business. He has thought about acquiring a loan from a bank but the high cost of borrowing made him reconsider this option. There are investors abroad who would be willing to lend to Mutuku at 1%. Bitcoin connects Mutuku and this investor.

There is no institution in Kenya that will lend you money for a business at 1% interest rate. If you can find one, please drop me a line. Bitcoin connects people, entrepreneurs, and investors across the world. The world is yours.

  1. Socioeconomic development projects, NGOs & Charitable organizations

Social projects in Kenyan communities have positively impacted traditionally neglected areas of our community – drought relief efforts, education of young girls, aiding small businesses, enabling farmers with better techniques and more. Organizations that are involved in achieving these goals rely on donations and well-wishers from within and outside of Kenya. Just like other flows of money into the country, donations are encumbered with costs and delays in receiving funds. Bitcoin enables charities to receive donations instantly, directly and for no fees. Bitcoin related companies are partnering with NGOs to allow them to receive donations through Bitcoin for 0% fees.

  1. Kenyan tech developers can monetize their apps and skill and get paid!

If you’re a developer, and have read this far, you probably know firsthand the trouble with existing channels for selling apps and receiving money for working on projects online. Bitcoin is the most efficient way to get paid by clients across our borders. Plus, you get front row tickets to a global innovation happening now.

If you would like to find out more on Bitcoin and digital currency tech in East Africa, get in touch with the ADCA (African Digital Currency Association) through email at [email protected]  or twitter @African_DCA . The ADCA is a non-profit advocating digital currency technology in East Africa. They hold regular meet ups, talks and events. Their next scheduled event is a Bitcoin Kenya meet up at the iHub on Tuesday, September 16th. The meet up is a free, open and public forum for participation and discussion. Everyone is invited to attend. This time, the ADCA will be handing out FREE bitcoins and demonstrating the unique features of Bitcoin at the meet up.

What is your opinion on the topic?
Kachwanya.com
Administrator at Kachwanya.com
---
Kachwanya.com is a leading Kenya Tech News websites specialized in product reviews, news insights, social media management, events publicity, and ad placement. See our Contacts Page to contact us.
Kachwanya.com on FacebookKachwanya.com on Twitter
Article Tags:
Article Categories:
TECH NEWS