Countries such as Kenya, Uganda, and Nigeria, were the first African states to adopt the use of Bitcoin as the primary digital currency introduced back in 2009. With close to a decade now in existence, cryptocurrencies have rapidly become a payment solution in other countries across the continent. The year 2017 saw some Southern African states as well embrace the use of digital currency, with Blockchain becoming a possible solution for growth in Africa. It has been speculated that if all the African states would adopt the use of cryptos, it could fuel growth more significantly.
Much knowledge is behind the acquisition of cryptocurrencies, their framework, and structure, as well as particular skills to its use. However, the primary goal is to understand what they are and the necessary knowledge of Blockchain technology. Below is a rundown of these basic concepts;
Cryptocurrency in itself can be defined as a digital asset with the ability to work as a medium of exchange and ultimately a payment solution. They are a subset of digital assets accepted as alternative currencies. With the use of cryptography, they can secure and control transactions with little influence from external economic factors.
So what’s Blockchain?
The blockchain is a continuous series of stored transactional data known merely as blocks. Each of these blocks is linked together to create secure cryptography, with specific timestamps, and transaction data that is resistant to modification. Therefore, a blockchain can simply be said to be an openly distributed ledger on recorded transactions.
The use of Bitcoin Wallet for cryptocurrencies has become the newest and most promising currency asset. However, there have been different and divided opinions on cryptocurrencies with different investor’s and public opinion attracting debate. This is not an exceptional case in Africa with policymakers demystifying their stance on cryptocurrency.
What are the risks involved in the use of cryptocurrencies
Undoubtedly, everything that has a benefit has its downfall. Let us look at some of these benefits and downfalls associated the cryptocurrency as a medium of exchange.
The high volatility of Bitcoin and other cryptos has heightened the reluctance of adopting digital currency as a mode of exchange. The uncertain risk of rising and fall with uneven percentages have been a significant threat to investment. Consequently, this results in an inability to predict performance to evaluate potential profit from investments.
Even though cryptos provide a decentralized and independent secure platform, it hasn’t been able to keep fraudsters and hackers away. There have been numerous headlines highlighting market hack attacks where many investors have lost their investment. Even though there are major steps that have enhanced the security of crypto markets, potential users are yet to embrace its use wholly.
The fact that cryptocurrencies have no direct involvement by central banks and limited to financial and monetary policies, Bitcoin is the best for business and other personal payments due to its ease of use, convenience, safety and instant transactions. Needless to say that almost anyone can use cryptocurrencies.
For the case of Africa, which has lacked dependable and stable financial, economic systems, Bitcoin promises great hope. Access to securities and funds with cryptos as a medium of echange may be possible across Africa.