Bitcoin has recently been a hot topic of discussion for many popular radio and television programs—including NPR’s Planet Money and The Colbert Report. Now the question is, what exactly is Bitcoin?
The U.S. has the dollar, Mexico has the peso, the United Kingdom has the pound. The creators of Bitcoin wanted to invent a currency that was not tied to any country or government. Bitcoin acts as cash for the online universe that can be transferred to anyone, anywhere in the world.
The online currency, that began as a mere hobby for tech entrepreneurs and pioneers of finance, has landed in Kenya. The Bitcoin transfer service will be an addition to M-Pesa, the country’s highly successful mobile banking platform. The service, called Kipochi—Swahili for “purse”—will allow Kenyans to transfer money abroad while avoiding the large transaction fees of companies like Western Union and MoneyGram.
Kipochi describes itself as a faster, easier, and cheaper way to transfer money, compared to banks and money transferring services. All that is required for users to sign up is an email address, phone number, and passport or national identity number. Users can currently transfer one bitcoin a day—the exchange rate is currently 99 USD=1 BTC. However, the transfer amount is expected to increase overtime.
M-Pesa is a system many Kenyans already use to transfer money by text message within the country. Kimpochi will link to this system and allow Kenyans to send and receive Bitcoin internationally, converting it to and from an M-Pesa balance. Since Bitcoin only charges $0.04 per transfer, exchanging money will be made cheaper and more affordable to Kenyans.
In a country where 70% of the population does not have a bank account but does have a mobile phone, it makes sense that a non-governmental, cashless system like M-Pesa, and potentially Bitcoin, will thrive.
– Scarlet Shelton