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cryptocurrency in AfricaCryptocurrency in Africa has become increasingly popular over the last couple of years, as many people become more interested in the possible economic benefits that can come from the new technology. Cryptocurrency is entirely digital money that uses a decentralized system. As a result, there is not one entity with complete authority over the process. The whole system works over the internet allowing transactions to happen anywhere in the world with no government regulation. Bitcoin, created in 2009, is the leading cryptocurrency company in Africa. There are a variety of users, from individuals to small businesses, that use the technology for investments, banking and payment transfers across borders.

Why Cryptocurrency is So Popular in Africa

In April 2019, Google Trends data showed that Nigeria had the world’s most searches for Bitcoin. Also in 2019, South Africa has the highest volume of cryptocurrency ownership compared to internet users. It was found that 10.7% of internet users in South Africa owned Bitcoin compared to the worldwide average of 5.5%.

In 2020, despite the global economic uncertainties, COVID-19 brought by businesses closing and people not working, Bitcoin trading has continued to increase in Africa. In May 2020, Nigeria had the highest trading volume in one week at $7.2 million, its third-best P2P trading week. Kenya was second with another record week by trading $1.6 million. South Africa came in third exchanging $1.1 million in a week.

Cryptocurrency in Africa mainly gained wide popularity because of high inflation rates across the continent. In 2018, South Sudan saw rates of 83.5% compared to the previous year. Other countries like Nigeria, Ghana and Zimbabwe, who printed $100 trillion notes worth only $40 in 2015, also experienced double-digit inflation rates. These hyperinflation rates had many citizens doubting the economic services of their central banks and governments.

Benefits of Cryptocurrency

In an effort to protect their money from the economic turmoil in their country, Africans started transitioning to Bitcoin. Since companies like Bitcoin have no single domain, the money inside the company is not affected by a single country’s inflation rate, which allows the citizens of African countries to protect their money from a failing economy. As a result, trust for these cryptocurrency companies builds.

Cryptocurrency in African also gives its people the ability to make cross-border payments. Some African countries have a history of fraud which had caused problems with international money transfers. In Nigeria, PayPal banned citizens from receiving money from other nations because of the country’s problems with fraud. However, cryptocurrency allows these citizens to transfer and receive money from anywhere around the world without the high fees that other money transfer companies usually have.

Cryptocurrency companies are blockchain technology that stores public records in a decentralized system. This also makes it impossible to alter transactions and assets. Many African countries use this new technology, through companies like Bitcoin, to elevate their status. They also use this technology to continue pushing their economy up to a level playing field with other nations. In 2019, Kenya and Nigeria announced plans to work more closely with these companies. These countries hope that by regulating cryptocurrency companies and their technology, the governments can begin bringing its people out of immense poverty and start becoming a greater global power.

– George Hashemi 
Photo: Flickr

Cryptocurrency in Bulgaria

In the years following the fall of the Eastern Bloc, Bulgaria still struggles in comparison with the rest of Europe. As of 2016, the government of Bulgaria reported that an estimated 23.4 percent of its population lived below the poverty line, while as of 2017 the unemployed constituted around 6.2 percent of the population. Bulgaria also happens to have the lowest annual salary, minimum wage and average pension amount in Europe, while also suffering high rates of outmigration, governmental corruption and overall mortality. Though these problems may appear overwhelming, the use of cryptocurrency in Bulgaria provides a means by which steps may be taken to mitigate these issues.

Fundamentals of Cryptocurrency

As a medium of exchange, cryptocurrency by its very nature expedites humanitarian aid to distressed regions. This is because it sidesteps the need for a financial institution as an intermediary between grantor and recipient, thus providing a means of direct payment for potentially large amounts. The realities of governmental and organizational corruption and incompetence that hinder international aid may be entirely evaded, resulting in more effective and efficient aid conveyance even to the most turbulent locations.

Furthermore, an estimated 40 percent of adults, mostly residing in the developing world, face impediments to the formation of a financial identity that may appear nearly insurmountable. However, cryptocurrency provides an alternative means by which people without easy access to financial institutions or who lack sufficient capital to open a bank account may establish a financial identity and improve their chances of escaping poverty. Moreover, despite the market volatility of cryptocurrency in Bulgaria and throughout the world, it provides a fairly stable alternative compared to entrusting one’s assets in banks and other financial institutions. Savings stored as cryptocurrency are less likely to be subject to the vicissitudes of inflation, corrupt governments and asset appropriation.

How an NGO Uses Cryptocurrency in Bulgaria

The BitHope Foundation, an NGO established by Vladislav Dramaliev, provides a global crowdfunding platform for humanitarian initiatives. As the first charitable platform of its kind established on the basis of cryptocurrency in Bulgaria, it seeks to facilitate NGOs and individuals alike in their fundraising efforts. This organization hopes to incentivize businesses that accept cryptocurrency to invest in these causes, which will further bolster the public impression and acceptance of cryptocurrency as a legitimate medium of exchange.

Many crowdfunding campaigns hosted through the BitHope Foundation’s website are considered to be humanitarian successes in Bulgaria. For instance, the “Support Burgas Municipality After the Floods” campaign raised €1,749 in cryptocurrency or approximately $1,925, in response to floods that damaged parts of Burgas municipality, a region of Bulgaria on the Black Sea coast. These charitable contributions went toward the purchase of household needs including refrigerators and microwave ovens for those affected by the floods.

Specific Campaigns by BitHope

  • “Every Child Deserves A Holiday” aimed to raise charitable funds for families living below the poverty line, raising €588 or approximately $647, in cryptocurrency.
  • The “Support Positive and Character Education” campaign, which raised the equivalent of €786 (approximately $865), sought funding for programs designed to inspire children and parents to persist with schooling regardless of what predicaments may arise.
  • The “Sports Charity League” campaign enabled the funding of sports competitions for children and adolescents, after raising a cryptocurrency total of €1,522 or $1,674.
  • The 2017 funding campaign “Preeclampsia? I want to know” raised €1,132 ($1,373) for the acquisition of biomedical tests for use in screening pregnant women without charge for the potentially serious medical condition preeclampsia.
  • Also in 2017, a campaign called “Hope for Mental Health” accrued €358 ($434) in funds to assist mentally disabled children and adults in obtaining health care.

BitHope in the Present

These successes emerged in spite of numerous impediments standing in the way of using cryptocurrency in Bulgaria. Besides a global decline in the total market cap of cryptocurrency from $604 billion to $131 billion in 2018, the Bulgarian government persists throughout 2019 in its refusal to allow cryptocurrency-based organizations to open a bank account for the storage of cryptocurrency. Although this complicates the withdrawal of funds, the cryptocurrency conversion process, accounting, tax payments and payments to internet service providers, such difficulties have made the BitHope Foundation more resilient in its fight to address humanitarian issues in Bulgaria.

– Philip Daniel Glass
Photo: Flickr

Cryptocurrency and Poverty Reduction
An increasing number of nonprofit organizations are looking to cryptocurrency to help reduce global poverty. The immediacy, inclusivity and stability that cryptocurrency promotes could be invaluable for those who are in crisis, lack access to a bank or struggle due to hyperinflation. Here are four examples of how cryptocurrency and poverty reduction are coming together:

GiveCrypto

GiveCrypto is a nonprofit organization that links cryptocurrency and global poverty reduction. Since founding members currently cover operating fees, 100 percent of the funds GiveCrypto accumulates goes to the recipients. While Bitcoin is the most recognized cryptocurrency GiveCrypto uses, this nonprofit also transfers money through Bitcoin Cash, Litecoin, Ethereum, XRP and Zcash. GiveCrypto emerged on June 20, 2018, and has raised $4 million so far. The founders hope that GiveCrypto will improve the well-being of individual people struggling in their communities. However, they also intend for GiveCrypto to build up the economies of these communities. For this reason, the ultimate goal of the organization is “to help spark economic growth by giving access to property rights and financial services on an open network.”

CareBit

The founders of CareBit specifically designed the CARE coin for charity purposes. Unlike GiveCrypto which is merely a platform to distribute several different types of cryptocurrency to those living in poverty or financial crisis, CareBit is its own cryptocurrency. The purpose of creating the CARE coin is to link cryptocurrency and poverty reduction more directly. Currently, CareBit is the only independent charity on blockchain, a technology that documents and decentralizes transactions. By directly implementing a charity model into blockchain, CareBit is able to trace transactions to ensure that 100 percent of each donation reaches its intended recipient. The ultimate goal for CareBit is to increase transparency and to decrease fees, corruption and fraud in any given transaction.

BitGive

BitGive emerged in 2013 and is Bitcoin’s first nonprofit charity. BitGive partners with international relief organizations and local charities such as The Water Project, Medic Mobile and Save the Children. Just like CareBit, BitGive implements its charity directly into blockchain in order to effectively track donations and increase its efficiency. Additionally, BitGive uses the blockchain technology GiveTrack to publicly track financial information and share this information in real-time. With GiveTrack, donors can track funds and ensure donations reach their final destination. The other benefit of BitGive is that processing fees are considerably less. On average, 3.61 percent of donations go towards processing fees for the average nonprofit. On the other hand, BitGive spends less than one percent of donations on fees.

Binance Charity Foundation

The Binance Charity Foundation (BCF) is the philanthropic extension of Binance Exchange. BCF uses Binance Coin to integrate cryptocurrency and poverty reduction. In contrast to the nonprofits mentioned above which focus on financial poverty reduction, BCF specifically focuses on improving the overall health of women in developing countries. For instance, BCF has recently partnered with 46 other organizations to provide a one-year supply of sanitary products to approximately one million women. Women will receive these sanitary products by using the Pink Care Token (PCAT), a redemption-only token on the Binance blockchain.

Uniting cryptocurrency and poverty reduction initiatives demonstrates the increasing demand for improved donating systems in response to a lack of trust in how charities spend their funds. Thus, the increased transparency that cryptocurrency offers through blockchain’s traceability feature could potentially reassure donors and encourage them to donate. Whether or not cryptocurrencies will become influential enough to directly strengthen the economies of the developing world, however, is still unclear.

– Ariana Howard
Photo: Unsplash

Cryptocurrency provides access to energy
Access to energy is necessary for daily life in most countries in the world. Electricity allows for economic development and innovation as well as securing basic human rights such as health and security. However, there are more than 1 billion people living without access to energy.

Solar Power and Cryptocurrency

One negative effect of not having secure and affordable access to energy is the expenditure that goes into coal. This leads to impoverished people being forced to buy expensive coal which further leads to environmental and health problems.

As a response to the scarcity of energy, the International Energy Agency confirmed that decentralized energy systems such as solar power would be the lowest cost option for electrification across sub-Saharan Africa due to its geographical location as well as the accessibility and practicality of the solar panels. With solar power, impoverished communities could use the electricity from solar panels to improve education, healthcare and socioeconomic developments.

Crytoeconomy Fueling Solar Energy Initiatives

This is where The Sun Exchange, a solar micro-leasing marketplace, and Powerhive, a rural mini-grid solutions provider, are partnering up to use crypto-economy to create a fully decentralized, blockchain-based global economic system that could distribute the full potential of solar power to impoverished people.

Sun Exchange states its purpose as buying solar cells and leasing them to schools and businesses in areas with a lot of sunlight. Fortunately, this lines up perfectly with the sub-Saharan region of Africa. Powerhive states that its purpose is to develop off-grid utility solutions to create a future where everyone has access to energy.

“Together, we are working towards a world where no one is forced to cook with unsafe kerosene or wood-burning stoves, no child has to worry about how they will study after dark, and lack of energy access ceases to propel cycles of poverty,” said Abraham Cambridge, Founder and CEO of Sun Exchange. “Our partnership with Powerhive underscores the SUNEX token sale opportunity to support a crypto project geared directly towards reducing global inequality and climate impact.”

For example, the new joint initiative plans to fund up to 150 new Powerhive rural mini-grid projects which will provide access to energy for 175,000 people in Kenya.

“At the heart of our projects are the communities we serve,” said Christopher Hornor, Founder and CEO of Powerhive. “By providing the power platform first and then layering in productive use programmes, we create a virtuous cycle of economic and personal empowerment that provides steady profits for both our customers and our investors. Our partnership with Sun Exchange will now give almost anyone the opportunity to invest in innovative low-carbon development projects in Africa and beyond.”

This partnership allows for the international community members to help improve lives across the world and make a small profit. This is possible because through Sun Exchange, individuals across the globe are able to purchase and own remotely-located solar projects set up by Powerhive.

The buyer would now earn a return for the power generated by his or her solar asset while the energy would undeniably improve the life of whoever received that energy in rural Africa. Also, because the payments are done through cryptocurrency such as Bitcoin, there are no complications that result from international transactions.

Hornor sums up this partnership as a positive step towards the future for renewable energy and universal access to energy. “The crypto-economy is the best tool we have to fight poverty, hands down. Our customers are hard-working people who have been excluded from the global economy. Now, we are able to bring them onto a platform of modern, clean power and to offer support for new businesses and opportunities for personal and intellectual enrichment.”

– Jenny S. Park
Photo: Flickr