How Bitcoin is Solving One of Africa’s Biggest Problem (Part 1)

Osiri and her peers are embracing some of Bitcoin’s most controversial features and virtues of privacy and decentralization, to stick it to the man and turn it into fortunes.

It took a white man, CEO of Twitter Jack Dorsey, to point out one of the most powerful, yet underrated stories coming out of Africa, when he said “ Africa will define the future of Bitcoin.”

I am here to tell you that story. 

After years of poor governance and corruption, time has now caught up with Africa’s states. They are unable to generate enough job opportunities for the millions of digital native Africans that spend 6 hours everyday glued to their whatsapp, tik toks, selfies and hyper localized memes.

Half of their time is spent on smartphones and the other half out in the real world looking for any way to make a dollar. It is hard out here. No jobs. That’s all that matters.

In the midst of the digital economy that is taking root in Africa, Bitcoin , a rare, radical, anti-central bank digital asset has found its way into the hands of thousands of young Sub Saharan African digital native, like Osiri.

Osiri and her peers are embracing some of Bitcoin’s most controversial features and virtues of privacy and decentralization, to stick it to the man and turn it into fortunes.

Despite multiple warnings by African Central banks, and an embargo by banks and Mpesa imposing sanctions on Bitcoin & cryptocurrency exchange services, informal networks of virtual currency dealer in Kenya, Ghana, Nigeria and South Africa continue servings millions of dollars worth of demand, in ways that resemble the trading ways of their ancestors.

In the decentralized digital economy, trade of Bitcoin flows free, unhindered.

But while the rise of this decentralized digital economy is creating opportunities for the bulging youth populations of Africa’s economies, it is running up against the old power structures that will go to great lengths to maintain the status quo.

This is part 1 of a 2 part series on how bitcoin is solving one of Africa’s biggest problems.

Continue reading “How Bitcoin is Solving One of Africa’s Biggest Problem (Part 1)”

How the Young Somali Hawaladars of Little Mogadishu are Shaping the Future of Bitcoin in Africa (Part 1 of 2)

Youthful Somali hawadalars from East Africa are complementing an age old informal financial practice with an odd piece of a new digital resilient tool – bitcoin.

This article is Part 1 of a 2 Part Series

The importance of informal finance arrangements is a reverberating theme across Africa. Informal doesn’t necessarily mean bad or evil or dirty, it’s just that rather than rely on the heavy hand of the law, some communities prefer to place their trust in reputation and social networks for all trade commerce and financial relationships whether offline or online.

Others, will turn to informal institutions of trade and finance when faced by adversity in an immediate harsh environment such as war, political instability, structural programs or lack of reliable services.

For example, the Igbo traders in Nigeria pulling on social networks to scale resilient informal enterprise in the face of political instability in Nigeria. 

The early airtime currency traders of Africa who gave birth to mobile money like Mpesa tapped into the power of networks to fill a money remittance gap using an odd piece of technology.

Today, the peer to peer Bitcoin traders of Kenya are bypassing an embargo by banks to meet demand for bitcoin by leveraging informal bitcoin trading networks based on trust and reputation.

It is all there.

One of the best case studies is of the Somali people, during post black hawk down cold war of Somali in the 90s by Peter D. Little. 

Set in the early 2000s post war Somalia, his stories tells of the resilience of trade of livestock across the whole of East Africa despite the collapse of central government and no functional system. 

The Ethiopia Somali Kenya cattle trade flourished in spite of the failed state conditions, on the back of trust network built on kinship. Through informal financial instruments and contracts of exchange and trade, they were able to sustain demand in Nairobi, forming a key trading corridor network in the Horn of Africa

In the post digital, post mobile world of 2019, the Somali people of little Mogadishu are under a different kind of threat on their digital financial lives.

Digital financial surveillance is underway in Kenya as part of tax reforms by revenue authorities including mandatory monitoring of electronic transactions and taxes on the digital economy.

Kenya is under pressure to reform after taking on too much debt to fund infrastructure projects that haven’t quit materialized as planned. An economic slow down, high youth unemployment rates and the weight of repayments on sovereign debts are some of the symptoms of the times. Some commentators have likened the impending state of the times to the Structural Adjustment Programs of the late 80s to 90s which shaped much of what is today’s informal economy.

As we shall see, the Somali people are some of the most sensitive to threats of erosion capital. It is in their blood, a natural instinct to respond to invasive threats to wealth such as hawala networks to bypass strict capital controls.

This got me thinking, how will the Somali people weather a period of heavy monitoring, high scrutiny and low trust?

The the answer lies in Eastleigh, a bustling business district in one of East Africa’s capitals, Nairobi. Here, youthful Somali hawadalars are complementing the old informal financial practices with an odd piece of a new digital resilient tool – bitcoin.

While there is no war today, times are similarly tough, the only difference is that is all mostly digital.

This is Part 1 of a 2 Part Series on how the young Somali Hawaladars of little Mogadishu are shaping the future of bitcoin in Africa

Continue reading “How the Young Somali Hawaladars of Little Mogadishu are Shaping the Future of Bitcoin in Africa (Part 1 of 2)”