The mainstream media in the US–and most of the rest of the world–really misses the point on Bitcoin. They’re obsessed with the cryptocurrency’s volatile valuation and fixate on the ‘black market’ uses along with high profile Bitcoin economy failures like the Mt. Gox exchange. For the most part they completely ignore the really compelling part of the Bitcoin story–its ability to disrupt so many components of the financial status quo and its countless uses that are downright revolutionary.
One important part of the Bitcoin story that is routinely overlooked is its potential for lower income individuals all over the world. There is a sizable–and growing–portion of the population worldwide that operates outside the conventional banking system. There is already a growing range of products and services focused on serving these ‘underbanked’ consumers from the venerable Western Union to recent startups backed by companies like American Express. Bitcoin has the potential to completely change the game and provide a zero cost and effective solution for consumers who don’t have access to traditional banking services.
That would include the 326 million people on the African Continent who don’t have access to basic banking services as well as their friends and family around the world. Western Union already processes $32 billion (US) in transactions to Africa each year. This dynamic is also why lower tech mobile payment solutions that work on less advanced traditional cellphones (as opposed to smart phones) have become so popular in Africa–16% of the population use this type of service.
There are now companies looking to leverage the Bitcoin platform on to standard feature cellphones to serve the huge African market. Once such company is Kipochi, and their CEO Pelle Braendgaard has a simple goal:
“My goal is to make bitcoin usable by ordinary people all over the world, so that even my grandma can use it.” That’s a noble goal, but challenges remain in Africa–many similar to the ones that Bitcoin faces worldwide. One of the most daunting is the lack of a system to convert Bitcoin easily into a local African currency. That’s another problem that the marketplace should be able to solve but it will take time. Once this occurs there’s much to suggest that Bitcoin could gain a surprising amount of traction in a highly unlikely market.