Bitcoin is a growing reality on the African continent, and Tanzania is one of the countries that is slowly but surely responding to the popularity of this cryptocurrency. The rising interest towards bitcoin from investors and residents alike has caught the attention of the country's Central Bank, and the Governor has expressed his opinion in that regard.
Talking to the Guardian, a local newspaper in Tanzania, Benno Ndulu said the citizens need to be cautious of the risks associated with digital currencies. He acknowledged the existence of cryptocurrencies but said there was a need for the government first to study them and understand how they work before recommending them to the population.
Current online searches show that the decentralized cryptocurrency is the newest trend in the Southern and Eastern region economies. Countries like Kenya, Nigeria, and South Africa have discovered a plethora of methods to gain access to bitcoins. Local bitcoin volumes in Tanzania has risen in a big way, and this is the reason why the Central Bank has begun to take notice of this new phenomenon.
The bitcoins start-up platform, Bitpesa, in Kenya has found its way to Tanzania. Bitpesa can accept bitcoins from just about anywhere in the world, and it also supports payment in Kenyan and Tanzanian shillings.
The platform allows traders and businesses to receive and send money in Kenya and Tanzania. The transaction fee in Tanzania is charged at 3%, and Tanzania has over 31 million registered mobile money accounts.
Reports by Coin.dance, a portal that provides updated blockchain information in various sectors of the Bitcoin system, show that Tanzania has an impressive spike on bitcoin trading in regard to volumes. The second week of July 2017 saw the amount of traded bitcoins hit 83 million of Tanzanian shillings, a remarkable value, considering the concept was still relatively new in the market. In USD, this was a value of $37,140. Concerning the actual number of bitcoins that were exchanged, Coin.dance put the figure at approximately 14 BTC, although the value significantly dropped to 9BTC in the third week of the month.
However, it is not just about the numbers. These figures do not translate to Tanzania being ahead of Nigeria in the Bitcoin industry. Tanzania stands at only 1 percent of all the bitcoins traded in the three most outstanding countries in Africa; Nigeria and Kenya.
In a bid to educate users of the bitcoin platform all there is to know about the cryptocurrency, social forums have been created online. People interested in the trade can join the forums and learn. It is interesting to note that the forums are using the national language- Kiswahili to educate their people.
Known as Jamii Forums, the platforms go into depth to explain what bitcoins are, benefits of trading with the cryptocurrency and embracing the technology, how to trade using the coins, and most importantly, how to protect yourself from fraudsters online. This is a good initiative that ensures that the locals who wish to invest are not left out because of language barriers.
Bitcoin mining in Tanzania has taken root, with a few platforms offering the medium through which investors can invest in the process. Anyone in Tanzania can compete with other cryptocurrency mining rigs around the world. One of the rigs, Invia World, offers a contract of up to 36 months, which is a longer duration compared to other providers of the service.
Tanzania’s electricity consumption in bitcoin mining is more than the entire country’s consumption per year. It ranks position 120 out of the 219 countries that are actively involved in bitcoin mining.
The rate of electricity consumption in Tanzania is predicted to increase by about 30% in the next one month. As more miners join the network, it is likely that the hash rates will also increase, but this will depend on the ability of the country to meet the electricity consumption demands.
The part of the population in Tanzania that has accepted trading and investment in bitcoin have created comfortable and secure mediums for trading. Currently, over 10, 000 bitcoins have already been sold in Tanzania. There are over 300 methods to pay for bitcoin through the Paxful platform, which include gift cards, bank transfers, Moneygram, PayPal, Western Union, personal credit cards, among many others.
Paxful is a peer-to-peer trading forum that connects bitcoin buyers and sellers. The system is easy to use, as all that is required is to select the method of payment and the number of bitcoins needed.
The platform seeks to provide traders with a fair, simple, and secure place where they can get value for their investments. It also solves problems revolving around money and how it is transported. Every day, the platform registers new entrants, an indication that the popularity of bitcoins in Tanzania is growing by the day.
Other methods through which payments for bitcoins are made in Tanzania are Tigo Pesa, Easy- Pesa, M-Pesa, bank deposit via ReMITANO, or Airtel Money. ReMITANO operates through the escrow service, which offers much more protection to online transactions. Once a buyer selects the number of bitcoins they need from the system, they are transferred from the wallet of the seller and held in ReMITANO’s escrow service.
Once the payment has been completed, and the seller confirms it, the bitcoins are released to the buyer. The service reduces the risk of the seller not releasing the bitcoins to the buyer after receiving payment. The support team resolves any arising issues between the buyer and the seller.
While the Central Bank of Tanzania has not entirely spoken against the cryptocurrencies, statistics show that the trading volumes are a little lower than what would be expected. The fact that the governor of the bank has distanced the institution from peer-to-peer bitcoin trading can explain why there is scepticism among some interested parties. The bank has described the digital currency as an illegal tender in the country.
However, the bank had promised to investigate and study how it works, and if the research yields positive results, it is likely to endorse the use of bitcoins for business at the local and international levels. Tanzania is likely to be listed as the most prominent Bitcoin economy in Africa.
Digital money is not a new concept in Tanzania, and once the idea of bitcoin has fully matured, the platform will open up more business opportunities between Tanzania and the developed countries. However, for this to be realized the nation will have to invest more in making the internet more accessible to the cities to encourage easy access to the platform.