The way the world understands ‘money’ is gradually changing thanks largely to Bitcoin and its underlying technology Blockchain. Before the advent of digital currencies, the world knew money as a currency that is regulated by a central bank/government and as something one could touch in his/her own hands.

Now, that is no longer the case, there is a new form of ‘money’ which one can possess but not touch; a form of ‘money’ that the central banks/government cannot regulate.

This new form of ‘money’ i.e. digital currencies particularly Bitcoin does offer a lot of benefits to its users. Some of its benefits are universal while some are peculiar to certain regions or societies depending on the prevailing economic situation. To African countries, Bitcoin does offer both benefits i.e. universal benefits and also region-specific benefits.

Easing Liquidity Challenges

Most African countries are currently faced with liquidity challenges. Money changers and other top-ranked government and private sector officials’ horde both the local currency and foreign currency and sell it on the black market. In countries such as Ghana, Nigeria and Zimbabwe among many others, there are thousands of people making money by selling ‘money’ on the black market. This development affects the middle class and the poor largely as they are the ones who have to buy ‘money’ in order to fulfil any transactions they may want. However, thanks to Bitcoin, this problem can actually be solved if African countries embrace Bitcoin. With no government regulation and the influence of central banks in the monetary system, anyone and everyone has access to Bitcoin at any point in time and can do as s/he pleases with his/her money.

Elimination of Counterfeits and the problem of excessive printing of money

Another key area in which Bitcoin is of importance to Africa pertains to the problem of forgery. Many individuals and companies have lost money to fraudsters who create counterfeit notes and use them in transactions. Due to technology, it’s becoming extremely difficult to detect counterfeit notes as they closely resemble real notes, therefore, most people fall prey to fraudsters and their fake notes. However, fraudsters cannot create digital currencies’ counterfeits.

In addition, Bitcoin (if adopted) will eliminate the problem of excessive printing of money. Most African governments have been found wanting when it comes to this challenge with Zimbabwe being the most notable. As the mining of Bitcoin is limited to only 21 million BTC, its impossible or central banks or governments to excessively ‘mine’ Bitcoin.

Bitcoin can be used in ending the cycle of poverty

Bitcoin does also possess the power to end the age-long challenge of foreign aid in Africa. For decades, African countries have received foreign aid from western and eastern countries meant at ending Africa’s cycle of poverty. However, the cycle of poverty is still present to this day and showing no signs of ending. The reason behind is that foreign aid when it comes to Africa is prone to abuse, mismanagement and misappropriation. However, if foreign aid comes in the form of Bitcoin, it’s easier to manage it as all Bitcoin transactions are publicly available and can be traced right up to the destination. This, therefore, eliminates all corrupt practices and ensures that the foreign aid reaches its intended audience.

The end result for embracing and adopting Bitcoin in Africa would be the creation of a crypto capitalist Africa.