What Bitcoin is Doing Well
Bitcoin has won the heart of many online investors, freelancers, gamblers and many others who engages in various online businesses. Bitcoin has become so explosive that it is traded throughout various darknet markets too, such as WallSt Market. The universal feature of Bitcoin has for the past years played the magic for its penetration into several economies, both larger and smaller ones. This article is aimed to address the reasons behind why Bitcoin has been easily accepted and has won the heart of many online workers in the Developing world.
It is undeniable fact that Bitcoin usage is directly proportional to internet usage, and this applies to all countries. Most developing countries are fast growing in internet usage, and it is no coincidence, that such countries are growing in numbers of Bitcoin users.
According to internetworldstats.com, South Africa had as many as 2,400,000 internet users at the end of the year 2000. But by the middle of June 2016, that number had exploded exponentially to 28,580,290. This is a 1,300% increase in a decade and a half. Most developing countries are growing into having internet usage, and it positively affects Bitcoin growth amongst them.
Bitcoin Users Making an Impact
Following the introduction of Bitcoin in 2009, South Africa has recorded increasing usage of Bitcoin. Even though few number of internet users in the country undertake online monetary transactions, they recorded Bitcoin users of 26879.96 in 2015, according to “Global Findex (Global Financial Inclusion Database).”
More marketing platforms which accept bitcoin payments have also emerged. Many of them deal in different products but they all have one goal in mind. To create accessibility for individuals without the burdens of taxes and banks. Pekar and Horizon, are all darknet markets that are winning the hearts of their bitcoin users.
Furthermore, Bitcoin is easily mined, in addition to its value of the domestic currency of most developing currencies. Bitcoin can be earned through faucets on the internet, freelancing works, Captcha and more, and does not require a credit check. In fact, the platforms that give people chance to earn Bitcoin does not strictly demand a C.V and work experience which most people do not have.
Bitcoin empowers population in the developing countries, through its low-cost remittances for those seeking to transfer small amounts of money internationally, and providing the basis for a richer set of financial services.
A Ghanaian worker in the U.S. can use the remittance service to transfer U.S. dollars to Bitcoin and allow a Ghanaian worker in Ghana to withdraw it in the Ghana Cedi, and in Naira in Nigeria. And as stated earlier, it is easy for developing countries to access and trade with bitcoin as compared to the other available payment methods. There are not as many rules and regulations, and the bigger governments are not monitoring their banks.
Inflation’s Impact on Bitcoin
Bitcoin has users in Russia, India, Argentina and several other places, and the named countries are categorized under developing countries according to ICQI. So the question of “why Bitcoin has won the heart of these countries” still stands.
Linking the growth to inflation leaves no room for further questions. While inflation may be a thing of the past in some developed countries, many developing countries still experience rampant inflation. Some countries set their exchange rate artificially high to increase the value of their domestic currency, and citizens take advantage to buy foreign reserve in the black market. The urgency to hold foreign currency in such an inflationary state pushes internet literates to sell their skills to obtain such foreign currencies.
Of course, there is a number of online payment systems. But most of the freelancing websites and other business platforms online accept PayPal. While other online systems do not favor internet users in developing countries. Africa, for instance has a 3% penetration rate of credit card and inactiveness of PayPal. If they were to maximize darknet markets such as Hydra, that uses bitcoin, a lot of money and fees can be salvaged.
Moreover, bank charges on international payments in Africa are the highest in the world (12.3%) due to lack of competition. As a result, around 40 billion dollars is sent back annually. Bitcoin, being a universal online banking system has been much subscribed to, and its recent rise in value has brought more people on board to take advantage of it over their domestic currency.
Bitcoin also serves as a banking service for those residing in countries with poor banking infrastructures, and its convenience usage makes it possible for day-to-day transactions. One economic characteristic of developing countries is the poor banking infrastructures and difficult accessibility of the few banks. Rational consumers will always go in for the best option at a lower cost, henceforth; an internet user with knowledge about Bitcoin will always choose this system over the physical banking systems.
Since the introduction of Bitcoin, the subsequent years has witnessed more interest from the developing countries, and for Bitcoin to be later accepted as real physical money in our world is yet to be told.
Even though lack of publicly available smartphones and computers in most countries has hindered the growth of Bitcoin usage in most countries, the London school of economics and political science has projected that, “the ’10 most likely’ to adopt Bitcoin are in the developing world”, based on the new Bitcoin Market Potential Index (BMPI).
In conclusion, Bitcoin has won a place in several developing countries, due to its advantages over the other payment systems, and going by the projection of the London school of economics and political science, Bitcoin is likely to strive among the few countries left.