Bitcoin in Uganda

As a currency, bitcoin is an unmitigated failure, it is extremely volatile, and you will be hard fetched to to be able to spend it.

Where though bitcoin does come into its own, is as a quick and dirty means of  transferring between currencies, across borders.

The banking crisis in Cyprus in 2013 created panic, the banks shut their doors for several days, the EU stole money from anyone with over 100,000 euros in their bank account, capital controls were introduced. A trial run for Greece two years later.  Bitcoin offered a solution. Even the University of Nicosia jumped on the bandwagon,  accepting payment of fees in bitcoin and offering a MSc in Digital Currency.

For migrant workers, sending money home is an expensive business.

Every year, migrant workers from Uganda send $700 million back home. Western Union  and MoneyGram cream off 10-20% in fees. But it is not only the fees, it may necessitate half a day off work to journey to a Western Union Office, for the recipient, it could mean a day round trip to a Western Union Office.

Bitcoin offers a reliable and fast alternative. Not only that, volatile as bitcoin is, it is a better store of value than the local currency in Uganda.

Everyone has a smartphone, not everyone has a bank account.

Bitcoin, or better still faircoin, enables countries like Uganda, to completely bypass the banking system. It would only be one step, to go shopping with your smartphone, transfer money from one bitcoin or faircoin wallet to another.

Faircoin, which can be seen as BitCoin 2.0, attempts to address some of the problems associated with bitcoin.

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2 Responses to “Bitcoin in Uganda”

  1. Peter Coulson Says:

    Not sure where you can spend faircoin though. Doesn’t seem any better.

  2. keithpp Says:

    FairCoin addresses two problems associated with bitcoin:

    – unfair wealth distribution

    – energy required to create

    Early adopters of bitcoins were able to easily mine on a on laptop or games console. No longer true, requires vast computing power.

    Few people understand currency, even less those who write upon the subject. Money did not evolve from barter, it arises out of the gift economy and moving from hunter-gatherers to farmers.

    The account to read is Sacred Economics.

    Money has to fulfil two criteria:

    – store of value

    – unit of exchange

    If a euro buys a loaf of bread today, then it has to buy a loaf of bread tomorrow, next week, next month.

    Bitcoin is too volatile to be a store of value. It also lacks utility, where is the baker to accept a bitcoin for a loaf of bread?

    Where it has utility, is as a transfer currency. It was used to transfer money out of euros, out of Cyprus, during the 2013 banking crisis.

    A lot of money is laundered through Cyprus. But they got their money out before EU stole from bank accounts.

    University of Nicosia accepts payment in bitcoin.

    I am currently discussing setting up exchange for bitcoin and faircoin and car hire using cryptocurrency.

    It is of use for migrant workers.

    And although volatile, less so than weak currencies, thus volatility relative.

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