Bitcoin, the world’s first decentralized cryptocurrency, has the potential to revolutionize the banking industry, particularly in developing countries such as those in Africa. With its decentralized nature and borderless transactions, it offers a new way to access financial power for people who are excluded from traditional banking systems. Recently, CNBC reported that Bitcoin is poised to blow up Africa’s broken $86 billion banking system, and it is easy to see why.
Bitcoin and the Lightning Network
The Lightning Network is a layer 2 scaling solution for Bitcoin that allows for faster and cheaper transactions. Essentially, it is a network of channels that can be opened between users to facilitate off-chain transactions.
This means that users can make Bitcoin transactions without having to wait for them to be confirmed on the blockchain, which can be a painstakingly slow and costly process. With the platform, users can make instant and cheap transactions, even for small amounts.
Improving Financial Access for People in Remote Areas
The Lightning Network has the potential to greatly improve access to financial power for people in Africa, particularly those in remote areas who may not have access to traditional banking services. The platform lets anyone with a smartphone and an internet connection participate in the global financial system. This is especially important in a continent where a great number of the population does not have access to basic financial services.
Decentralization and Stability of Bitcoin
In addition to the Lightning Network, Bitcoin’s decentralized nature also makes it an attractive option for people in Africa. Unlike traditional banking systems, which are often dictated by a few large corporations or governments, Bitcoin is controlled by a decentralized network of users. This means that users have more influence over their own money and are not subject to the whims of centralized institutions.
Furthermore, Bitcoin’s limited supply and deflationary nature make it an attractive store of value for people in Africa. Many African countries have struggled with hyperinflation and currency devaluation, which can make it difficult for people to save money or invest in their futures. Bitcoin’s limited supply means that it cannot be inflated away by central banks or governments, making it a more stable store of value.
Overcoming Challenges in Education and Internet Connectivity
Of course, there are still challenges to overcome before Bitcoin can truly revolutionize Africa’s banking system. One of the main challenges is education. A lot of people in Africa may either be unfamiliar with Bitcoin or may not understand how it truly works. Education and awareness campaigns will be crucial in helping people learn about the potential benefits of Bitcoin and how to use it safely and securely.
Another issue that impedes the wide adoption of Bitcoin in the continent is its low Internet connectivity rate. However, one developer by the name of Kgothatso “KG” Ngako has developed a solution to this problem.
KG’s “Machankura” project works by integrating Bitcoin and the Lightning Network into the existing GSM network in the area. It makes it possible for people in remote areas to send or receive Bitcoin without the need for an Internet connection. By integrating Bitcoin into the GSM network, the platform provides a way for people to participate in the global financial system, even in areas with limited internet connectivity.
Bitcoin and the Lightning Network have the potential to greatly improve access to financial power for people in Africa, particularly those in remote areas. With its decentralized nature and borderless transactions, it offers a new way to access financial power for people who are excluded from traditional banking systems.
Despite the challenges in education and internet connectivity, initiatives such as the Machankura project provide hope for the future of Bitcoin adoption in Africa. As more people become aware of the potential benefits of Bitcoin and the Lightning Network, we can expect to see increased adoption and a shift towards a more inclusive and accessible global financial system.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.