What are Bitcoins and are they safe to use?
BITCOINS are a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name. I bet you will get a dozen different answers from different “experts” who are neither in the ICT fraternity nor banking industry.
Many people rely on social media for information and news. Not everything that is said on social media is good or bad per se. One has to conduct her own research and establish what this form of digital currency is and whether is safe to use to transact. Besides that there are a lot of questions I receive in my inbox because I have touched on the issue before. Questions that people follow:
Where are Bitcoins stored? Bitcoin’s most important characteristic, and the thing that makes it different to conventional money is that it is decentralised. No single institution controls the Bitcoin network. This puts some people at ease, because it means that some large bank cannot control their money.
A Bitcoin network is made up of thousands of interconnected networks that maintain a ledger of all transactions made. Every Bitcoin user can have access to the ledger but can never know the name of the transactors as they have encrypted or secret codes for security.
How do I get them? Organisations like Coindesk, Bitcoiner, which are based overseas and a few in Zimbabwe are Bitcoin exchanges. These enable end users to buy and sell their Bitcoins. They do not keep Bitcoins they have data houses that store ledgers known as Bitcoin chains. The challenge in Zimbabwe is lack of forex. This has driven the rate of exchange up. So trying to buy a Bitcoin using say, EcoCash, works but it is pretty costly up to 40 percent interest rates.
How do I use them? You have to go online and open a Bitcoin wallet. After that you must load it with some “juice”. If this process is cumbersome there are consultants here in Bulawayo like ZimBitCoin who can open an account for a small fee. After your wallet is opened then, you will have a unique wallet address that you must print and keep under your “bed” for safety. You can download an application to buy and sell your Bitcoins to buy items from Japan, Russia, UK, South Africa and beyond. This is the reason why Zimbabwe in general must adopt Bitcoins so as to source critical raw materials for their business operations. I am in Diaspora how do I get involved? It is pretty easy. Introduce your relatives, friends or businesses back in Zimbabwe to come and sign up for a Bitcoin wallet here in Bulawayo. It is more advisable for them to come in person and deal face to face with the Bitcoin exchange for sign up and registration purposes with Coinbase, Coindesk or ZimBitCoin.
Do these exchanges keep our monies? No. These exchanges facilitate transactions between parties. Bitcoin is not like a bond note or rand coin or debit card that you can physically touch. It is a set of mathematical combinations (keys) used to transfer ownership. Advanced BTC overseas do not charge even a cent to sign up. Here in Zimbabwe we have to source the Bitcoins (BTC) in hard currency. Trust me no one wants to keep people’s monies. Your BTC wallet is yours with your key and password. Store it carefully. Do not share it. Protect it the same way you protect your bank card PIN or Mobile Money PIN. You are responsible for the security of your own wallet account. Bitcoin exchanges help you get hooked up with reputable companies that have traded for long.
Is it legal to use them in Zimbabwe?
RBZ is still trying to come up with some positive legislation for Bitcoin exchanges. But one thing they cannot do is to ban its use. It’s like saying people must apply to the telecom regulator Potraz to open a Gmail account. Banks naturally do not like BTC because payments are between you say, Sihle based in Kezi to Yi Ling in China to buy 100 bags of shirts. The transaction does NOT have any bank charges. Charge literally. Yes you heard me right. I have been using this for about 10 years. So banks will frown at this the same way they frowned at mobile money wallets. It is now digital money wallets. You get it? Governments all over the world cannot do much. The same way you cannot control or shut down the internet. BTC runs on a network that cannot be destroyed from a single point. Their worry ranges from that people might buy illegal items and trade in bad things, which makes sense. So do not use BTC to buy “mbanje” whose use is illegal in Zimbabwe. I use it to buy mainly software, ICT equipment, air tickets and soon to tithe! What about those who say it is fraud or a
pyramid scheme? Pyramid schemes have been in existence from time immemorial. These are schemes where people are enticed to buy a product or service at a fee and then invite others into the network. Those who sign up first reap more. But then there comes a time when those lower in the ranks of the pyramid, have no one to pay them and it collapses. This applies to any product. With Bitcoins it is different because once you buy them they are yours. Whether you invite one person or 10 people to the network it matters less to the fact that the digital coins belong to you. There is money to be made but not those fake $ 10 000 per day super promotions ngamanga.
Introducing more people helps increase the level and volumes of trade. Why? More and more shops will then accept BTC. When introducing people do not mislead them by saying that they will make a million in the first year. Of course the more you refer the more commission. What kind of items can you buy with
them? Cars, fertilisers, electronic goods, computers, clothing, chemicals, tents, food, airline tickets, hotel booking, ARV medications and so forth, I could go on. BTC transactions are non-repudiable.
This means that once you send them there is no going back. Unless the receiver sends them back to you. Remember Bitcoins are decentralised, anonymous and owned by no one person. Just exercise caution when trading online. I run a business, how can I get involved? The process is the same. But now it means that you will advertise that “BTC accepted here” just like Mastercard, Zimswitch, Visa, EcoCash payment modes. Nothing can be easier than this. How much is a Bitcoin today? The value of the Bitcoin follows supply and demand mechanics. It cannot be fixed. While typing this document it was 1 BTC = $4 802. It is driven by market forces. In 2009 it was about $0. 40! And five years ago it was about $4 794. Google the price fluctuations and you will know more. Where can I get more info about BTC? Do some research online. Ask those who know about it and also there are weekly training sessions and seminars that are held weekly in Bulawayo for individuals and organisations.
Send your questions and comments to details provided below. I could not cover everything here so send questions and comments that will be the basis of what people know or do not know about Bitcoin. email@example.com App – 077 600 2605