HomeOpinionThe role of bitcoin in a changing Zimbabwe

The role of bitcoin in a changing Zimbabwe

The rise in the value of Bitcoin has been stratospheric over the past several years. Where before Bitcoin was a cryptocurrency that only a select few knew much about, nowadays it has become part of our everyday vernacular. We are familiar with the idea of cryptocurrencies as a nation, but we haven’t adopted them with such gusto as some other countries. Maybe now is the time for Zimbabwe to cement itself as a cryptocurrency hub.

Zimbabwean government has decreed that commercial banks cannot trade any cryptocurrencies. This ruling is enforceable by law, which means that at the very least, our banks cannot profit, or indeed lose money, by investing in this industry. However, these rulings apply to banks only, not to other business or individuals. It is totally legal to invest in, trade with and use Bitcoin in Zimbabwe, so this could be used to our advantage. Nigeria are the world leaders in Bitcoin use, accounting for 32% of its use for trading. Not a single other African country makes the top 10 list, but Zimbabwe could be the ones to follow. It is worth noting that although Nigeria accounts for 32% of Bitcoin transactions, the currency is owned by relatively few people. The USA, China, and even Romania have more bitcoin holders than Nigeria by far, meaning that the wealth is in the hands of the few. Investing in Bitcoin mining in Zimbabwe could open up an area of the market, enabling the wealth to be distributed more equally.

Another important factor in the successful uptake of Bitcoin as a currency in Zimbabwe depends on how easy it is to use. Whereas just a few years ago Bitcoin was relatively unheard of, it is now used for all kinds of things. Mainstream applications are frequently used by Zimbabweans and this is where Bitcoin could spike in value again. The advent of bitcoin casinos has made gaming safer by allowing people to play totally anonymously. Although gambling is legal and regulated in Zimbabwe, many people prefer to keep this activity private from people such as their employers. Whilst a security breach is always possible, no matter how sophisticated the safety measures, because blockchain is totally untraceable by nature, even in the event of a security breach, no personal information could be spread. It seems as though this particular cryptocurrency has really found a niche in the online gaming industry, which, as of yet, no traditional currency can adequately fulfil.

So, whilst it is relatively simple to use bitcoin in Zimbabwe, is it as easy to actually acquire it? Currently there are three sites that stand out as the most widely used in this country, with Kraken being the most popular. It is used by around 6 million people, but offers fewer currency exchange options than LocalBitcoin which is the preferred site of those who are new to cryptocurrency trading. This site allows transaction in fourteen different currencies, making it simpler to change Zimbabwean currency for cryptocurrency. Of course, purchasing some is only the first step in the process. Trading is complex and can lead to big gains and big losses, so it should only be approached by those who can afford to do so. However, for those interested in purchasing some of the cryptocurrency, whether as an investment, or to use, it is important to understand a little better how it works.

The first thing to understand about Bitcoin is the blockchain. This technology was created so that the cryptocurrency had something of an inherent value. In order to mine Bitcoin, essentially win them, one must solve mathematical problems. These problems started off relatively simple for the first few coins, but became harder as more coins entered into circulation. This meant that the problems took longer to solve, or required the work of more people. In turn this inflated the value of Bitcoin, as the time taken to earn one increased. As well as encouraging a growth in value, blockchain technology also helps to keep transactions safe. Every bitcoin transaction is recorded in the blockchain, meaning that there is no way for the cryptocurrency to be stolen, missold, or misplaced. Whilst it can seem a little confusing at first, this should give people faith in the safety of their investment.

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