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- 9 Positive Effects of Bitcoin on Uganda Economy:
- Why is Bitcoin not Suitable for Uganda's Economy?
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Bitcoin, the digital currency, is expanding its influence worldwide. The decentralized payment system has seen massive acceptance in Uganda and other African countries like Ghana and Kenya, specifically, Bitpesa, a bitcoin business that processes bitcoin payments into fiat currencies such as Kenyan shilling or Ugandan Shillings.
In Uganda, where the shilling has been less stable, Bitpesa has seen massive acceptance from online business owners and entrepreneurs. According to a 2015 report, a bitcoin payment processor saves a customer 9% in transaction fees on every bitcoin purchase instead of using a credit card via PayPal or Skrill. For more info, check bitcoin-profitapp.com
With the advances in transaction technologies like ‘online payments’ and other digital solutions, it is essential to understand how bitcoin has come to stay despite its volatility issues.
The digital currency has entered Ugandan markets without many marketing strategies, unlike any other products where heavy marketing expenses are seen before launch, evident with mobile phone service providers that have spent billions in marketing.
Bitcoin has allowed Ugandan businesses to gain massive exposure on global markets
Digital currency allows business owners and entrepreneurs to sell their products/services to anyone in the world 24 hours a day from wherever they are situated. This is possible by opening a bitcoin wallet that can receive or send payments without any geographical restrictions. Furthermore, no other third-party company needs to be paid for the service to work.
Bitcoin has provided Ugandans with an alternative investment strategy
Bitcoins are currently being traded at over $700 each, which means there are substantial future potentials in investing in them today. This makes it a low-risk, high-return investment. According to the US Central bank, there is over $12 billion in circulation across the globe today.
Bitcoin has provided Ugandans with a new income-generating opportunity
There are over 100 bitcoin-related businesses that have been launched since 2014 and continue overgrowing. The decentralized payment system currently employs thousands of people around the world.
Bitcoin has improved Ugandan businesses in terms of operation costs
Businesses that previously depended on PayPal or Skrill to receive or send payments can now switch to bitcoin with no additional fees hence more profits for the business owners.
Bitcoin can be used anywhere by anyone without any geographical restrictions, making it easily accessible
Unlike bank accounts requiring identification and proof of address, anyone without any form of restrictions can easily open a bitcoin wallet. As a result, one can receive funds or send payments to others anywhere in the world at the click of a button without geographical restrictions.
Bitcoin has solved issues with transferring money by eliminating third-party companies involved in the transfer
In today’s fast-moving world, money transfers have been made quick and efficient with bitcoin. As a result, one can send unlimited amounts of money to anyone anywhere in the world within a short time without paying hefty fees associated with bank transfers.
Bitcoin has helped Ugandans access digital currency services despite restrictions on banks and other financial institutions
Bitcoin is a global system not controlled by any government, bank, or third party, making it an alternative solution for Ugandans who might have issues gaining access to banking services due to regulations.
Ugandans are currently suffering inflation in local currency due to easy access to paper money in markets through ATMs, which the Central bank does not control.
Bitcoin has made lives easier for Ugandan service providers with low or no bank account penetration rates
Ugandans who are employed or own businesses that do not have bank accounts can receive payments through bitcoin wallets, which are easy to open without any form of restrictions. This makes it possible to enjoy global exposure and access international markets.
Bitcoin has helped Ugandan businesses avoid the volatility associated with paper currency, which can quickly depreciate or appreciate
Bitcoin has provided Ugandans with a safe alternative for storing their money, especially where the local currency experiences inflation or depreciation. The decentralized digital currency can also save and gain access to international markets without facing the volatility of paper currencies since it is relatively stable.
Bitcoin is not regulated; hence it could create future problems in terms of money laundering and lack of transparency
Transactions on bitcoin are 100% anonymous, meaning the buyer, seller, trader, or merchant has no identification. This creates a loophole for criminals to engage in fraudulent activities without being tracked, unlike when using bank accounts that require identification and proof of address.
Bitcoin value is not stable since it’s decentralized, creating a risk to the Ugandan economy
Bitcoin has no central bank, which means there’s nothing to regulate its value. This creates a volatile market where prices rise or fall dramatically at any given time because of several factors, including regulation policies, political stability, and demand. For example, in 2014, the price of one bitcoin was valued at less than a US dollar which increased to over $1,000 in 2016.
Bitcoin has no backup in case of loss, unlike money stored in banks
Any government or institution does not back Bitcoin. This means that the value of one bitcoin will remain unchanged even if it is lost due to theft, scamming, lacking proper backups on computers resulting in data corruption, etc. Hence individuals with bitcoin wallets are advised to use jams to safeguard their money in case of loss.
Bitcoin cannot be used for payment or transaction purposes, unlike bank cards or mobile wallets
Bitcoin has no transactional value because it only exists electronically and does not physically hold any value like other traditional currencies like US dollars, euros, UK pounds, etc. Hence using bitcoin is a risk to the Ugandan economy since it is not regulated.
Bitcoins are easy to lose or get stolen due to lack of protection
Bitcoins are stored in wallets that should be protected using passwords. Unfortunately, this means that hackers can easily access them if they are lost or stolen, creating a risk for individuals who invested in bitcoin without protecting their wallets.
While bitcoin presents a low-risk, high return investment strategy to Ugandans, it’s still not regulated in Uganda hence the need for strict policies from the government to protect people who might get caught up in future legal issues.
Thank you for reading!