Ugandans touting ‘gospel of bitcoin’
Adoptees include professionals, jobless
KAMPALA, Uganda — In a sleek new high-rise in Uganda’s capital, an enthusiastic lecturer described his financial success with the cryptocurrency bitcoin while his earnings were projected on a screen.
“What I have earned in one-and-a-half years from bitcoin is more than I earned in 10 years as a teacher,” Richard Bagorogo told his audience. “I am living on bitcoin because getting a job in this country is not easy.”
Some tech-savvy Africans are embracing bitcoin, the most popular virtual currency, despite the warnings of a few governments, seeing the volatility in its value a better risk than the usual hustle amid the continent’s high unemployment.
Many bitcoin adoptees are professionals aiming to supplement their salaries, but others are jobless millennials hoping to make a living by trading the cryptocurrency, which isn’t tied to any bank or government and, like cash, allows users to spend and receive money anonymously or mostly so.
In Kampala, Uganda’s capital, and elsewhere a small community turns up at events where stars like Bagorogo preach what they call “the gospel of bitcoin.”
It didn’t always go smoothly, as many in Africa have little idea what bitcoin is.
“When I tried to bring my cousins on board, they called my father in the village and said, ‘Your son has gone mad,’ ” Bagorogo recalled. “For me, I was fascinated by the mathematics behind blockchain technology. But the local man is interested in money, not the mathematics, so I normally sit with them and show them how I get and withdraw my money. Once they see how easy it is, they also want bitcoin.”
Bitcoin and other cryptocurrencies rely on blockchain, or the public, distributed ledgers that track the coins’ ownership. The bitcoin ledger is powered by “miners,” so-called because they throw computational power into the system to discover and verify cryptocurrency units, occasionally receiving — or “mining” — new bitcoins in return.
Bagorogo encourages people to invest in one of over two dozen mining pools. For many who can’t afford to buy and hoard large amounts, the potential returns, including dividends, can seem promising.
Such facilities, however, have faced doubts about whether they are genuine, and some countries have warned of money laundering and the threat to government-backed currencies.
In China, where a substantial amount of the world’s supply of bitcoin originates, the government ordered a shutdown of all cryptocurrency mining operations in January. The crackdown, plus hacking attacks leading to the theft of hundreds of millions of dollars’ worth of bitcoin from Japanese transfer Coincheck, contributed to the volatility of the value of a single unit of bitcoin, which rose to $19,000 in December but has since fallen below $9,000.
Uganda’s central bank has warned that investing in bitcoin and other digital currencies “is taking a risk in the financial space where there is neither investor protection nor regulatory purview.”
Kenya and Nigeria have issued similar concerns, and last year Namibia officially banned the use of cryptocurrencies for commercial purposes. But other countries in Africa appear open to the possibilities. Last year Tunisia announced it would launch a digital currency based on blockchain technology, and South Africa is researching the technology’s feasibility.
“It is not wise to dismiss cryptocurrencies at this stage,” said Stephen Kaboyo, a Ugandan analyst who runs a Kampala-based financial services firm. But those who invest in “a hugely speculative asset” must first understand the risks, he warned.