South Africa joins the party
In South Africa, Bitcoin adoption is starting to pick up the pace.
In South Africa Bitcoin is very much still an emerging market. However, that is starting to change.
Citizens have been enduring massive inflation for years now and have been searching for something, anything, as a means of protecting their wealth.
Here is a chart of the South African Rand against the US Dollar over the last 5 years:
Not a pretty picture, and it's even worse when you look back at the last 10 years. Basically, anyone who has held their money in a bank can purchase less than half of what they could purchase just a couple years prior with the same amount of money.
Enter Bitcoin
Currently there are about 100,000 users on the two main Bitcoin exchanges, Luno and Ice3X. That is not a large number but that number has been increasing rapidly over the last year or so.
Citizens are flocking to these exchanges as a means of preserving their wealth and to be a part of the current Bitcoin boom, or Bitcoin gold rush as some are calling it.
The Luno Marketing Officer, Werner Van Rooyen, said that it isn't just about new users signing up for the exchanges, but instead it is that Bitcoin overall is becoming more mainstream in South Africa.
"We see it in many ways,"
According to Van Rooyen...
"Not just from our own internal metrics, which include new customers, active users, application downloads, trading volumes and interest from banks and institutional investors - but also from other places: trading volumes that keep growing, increased merchant adoption, increased understanding by investors, regulators and banks, press coverage, and also the number of Google searches on Bitcoin."
Adding to that, The South African Reserve Bank also just announced that it would be starting a Bitcoin regulation experiment via a "sandbox" setup through a blockchain-based solutions provider called BankyMoon.
More about that can be read here:
https://cointelegraph.com/news/south-african-central-bank-to-start-bitcoin-regulation-experiment
Why the need for Bitcoin?
As mentioned above, South African's are getting hurt by inflation. Every year any money that they are holding is able to purchase less and less.
Political turmoil has been a major reason for this. The country was also just recently downgraded to Junk Status in terms of it's credit rating by the rating's agencies Fitch and S&P.
There are constant reports of corruption at the highest political levels and fighting amongst political parties which all negatively affects the value of their currency.
Bitcoin offers a hedge against that downward sloping local currency. Bitcoin is volatile as well, but over the years it has a predominantly upward bias vs. the Rand's downward bias over the same time period.
Van Rooyen noted:
"When there is a nosedive in, say the exchange rate for the Rand, you'll often notice a downtrend in other industries like the stock market or the housing market. Bitcoin has been found as one of the assets with the lowest correlation to other asset classes."
Which means South African's have few other options.
More than a store of wealth?
Currently the best use case for Bitcoin in South Africa is as a store of wealth, however, that isn't it's only use...
South African's biggest online retailer Takealot, accepts Bitcoin. Takealot is basically their version of Amazon.
Takealot's Chief Marketing Officer, Julie-Ann Walsh had this to say regarding Bitcoin payments:
"When we launched the Bitcoin payment option in 2014, Takealot was one of the first South African online retailers to allow customers to transact using Bitcoin, which then accounted for just under .1% of all transactions. While this is still a very small portion of our overall sales, the number of Bitcoin transactions has increased year on year since launching the service and from 2016 till now we have seen a 170% increase year on year in Bitcoin transactions."
Bidorbuy, has also been accepting Bitcoin. Bidorbuy is basically their version of eBay.
Heck, even the Nelson Mandela Children's Hospital Fund takes donations in Bitcoin.
As you can see, Bitcoin is a useful store of wealth for citizens in South Africa, but as time goes on it is quickly becoming MORE than just a store of wealth in South Africa.
Stay informed my friends!
Sources:
https://www.xe.com/currencycharts/?from=ZAR&to=USD&view=10Y
https://cointelegraph.com/news/south-africans-make-bitcoin-work-for-them-as-currency-store-of-wealth
https://cointelegraph.com/news/south-african-central-bank-to-start-bitcoin-regulation-experiment
Image Sources:
Follow me: @jrcornel
Very nice.
Congrats to all South Africans , S.A gov take a smart step ,
We are excited to welcome South Africa to the crypto party!
Agree SA is stepping up if you like money have a look at this hack https://steemit.com/introduceyourself/@bitshack/post-that-make-money-is-this-true-wow
I imagine they are anxiously awaiting the results of their "sandbox" test.
I wouldn't go near BankyMoon, the whole point of crypto is to be anon.
Bitcoin is open source. If you want anon, go Monero
can you vote me ?
Sorry to say but they have never taken a smart step. Goverments like this are usualy clueless about tech.
That's interesting to hear about the adoption of BTC. Hopefully diversifying into other areas will hedge buying power.
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I'm not sure that bitcoin qualifies as a store of wealth just yet. In my view, it's still too volatile. How can something that drops in value by over 25% in under a week be a store of value? Hopefully after the whole scaling debate is over, things will settle down.
I agree bitcoin has the potential to be an excellent store of value and should help people in high inflation regions but at present the volatility is just too high.
I think if your currency declined 50% against the USD in the last 5 years, you would prefer a currency that appreciated 2000% in the same period. Even if it has price swing of 20% in a week
and for all those Gold bugs. South Africa having lots of gold did not help
https://en.wikipedia.org/wiki/List_of_countries_by_gold_production
Will Gold ever get it's place in the sun again?
Yes, when hyper inflation comes
I think cryptocurrency is taking its place now as a safe store of value
This is the point of this article. A country rich in gold is turning to cryptocurrency instead gold to store wealth
Yes, we are moving on with technology. Gold might come redundant in the future. Even oil too.
Oil is going down. I believe we are beyond Peak Oil already.
That is why OPEC is not cutting supplies and USD is tanking
https://en.wikipedia.org/wiki/Peak_oil
Gold will always be here. To be used by central banks and people without computers or smartphones
Yip, I agree. Both will be there but the role it plays will be smaller and smaller.
In the long term I agree but it depends how often you need to use it. If you need to spend your wages on rent for example and they are worth 25% less today than yesterday, that is a real problem!
yes, its easier to convert bitcoin back to rand when needed than to convert gold to fiat money to pay your bills
Agreed that the volatility is not reassuring. However, in respect to a South African mindset Bitcoin sure seems like a plausible store of wealth. Especially when you take into consideration what has happened in neighboring Zimbabwe where $100 Trillion bills became the rough equivalent $1 USD.
If I were a South African, I'd sure sleep easier at night knowing I had some portion of my savings in Bitcoin. It sure seems like once awareness of Bitcoin/crypto reaches the far corners of the world (and with it internet access), everyone will be inclined to allocate at least some portion of savings towards the space. Just my two cents!
If value is not at all tangible and is based on a belief system then value can be stored in just about anything. the only reason gold price seem to have stability is because it is centralized, controlled and in the hands of a few. Bitcoin is a lot safer to hold than most if not all government currencies that exist today.
If the government fucks up the currency goes down and the community belief system that gave the currency value goes with it.
bitcoin has no government to fuck up the belief will fluctuate so will the value and so will the price. bitcoin is gonna be around for a while
Nope, just miners and developers arguing over what is best for it ;)
Good point. I think in this situation everything is relative. When you have a local currency that has dropped by 75% in the last 5 years, Bitcoin seems like the more stable option in comparison, even if it does have nauseating peaks and valleys.
If you apply regular smaller purchases at what seems a low spot, with a buy and hold strategy, the Rand cost averaging could take advantage of the volatility. That's what I'm doing anyway.
Great to see SA come to the party. It is unfortunate that Bitcoin got a bad name in 2016 in SA thanks to MMM. Some people in SA still think MMM and Bitcoin is the same.
Its all about the bitcoin!!! store of wealth forever and a day, stops value destruction due to the fixed supply of BTC.
Cryptos all the way.
Keep steeming like no other @jrcornel such an informative post.
That is the hope. I wonder if that limited supply will hinder it's use as a global currency though?!
Thats where verium eos and ethereum come in...
I dunno @thecynic think Bitcoin still has a long way to go and will increase in price dramatically.
I can't see supply being an issue, the value will just increase. With a 100 000 000 'satoshi's' (smallest unit) in each Bitcoin there are 2 100 000 000 000 000 units that can absorb value over the eventual Bitcoin supply.
@jrcornel
it's crazy to see south Africa , use bitcoin mostly Mandela fondation taking bitcoin
it's juste great way for them , to be able to use parallele economy system
Thanks for sharing
Upvoted ;)
Peace
@geemo-from-paris
Good news @jrcornel. Cryptos seems to be an answer to our dwindling S.A. economy. Resteemed
Great history lesson, quite an interesting topic there. You really spent time doing your research. Steemit is such a great platform to learn about so many different things, its amazing. Thanks for posting and keep up the great work!
Hi jcornel let me ask you something again how do you find this knowledge? you must be in finance or something? I am trying to come up a little myself but its tough can you share any pointers on btc for me? :0)