Bitcoin’s eye-watering price surge over the past year is proving too tempting to resist despite fears that cryptocurrencies are a bubble floating towards an inevitable burst. One group, for whom it holds particular appeal is African millennials, writes the BBC.
Thirty year-old Peace Akware in Kampala is a convert to the cryptocurrency craze.
Like any self-respecting middle class millennial here her smartphone is always within reach and with it her digital wallet.
“I check my Bitcoin every day and any chance I can get. Any minute, any hour, anytime, as often as I can,” she tells BBC from the small bungalow she rents on the outskirts of Kampala.
Finding a job here is almost like a lottery for graduates so Ugandans often have so-called side hustles. Peace has sold clothes and even got into money lending. Both failed.
But buying cryptocurrencies like Bitcoin appeals to her because it requires less of her time and there are no upfront costs.
She’s bought more than a thousand dollars worth of Bitcoin.
So far the gamble is paying off and overall she is seeing her digital value rise.
“You know there’s potential for it growing even further. I would like to buy a car. I would like to buy land. I would like to build with it.”
Bitcoin classes
Martin Serugga, a sharply dressed currency trader in Kampala warns people to be cautious too.
He says unfamiliarity about the new financial instruments could lead to criminals duping customers out of their money.
Nevertheless, he has started weekly classes with over 50 people attending to learn about cryptocurrencies and how to trade them against traditional currencies like the US dollar or British pound.
He says high youth unemployment in Uganda is driving interest in Bitcoin and other products.
“If you don’t have factory jobs and you don’t have corporate jobs to serve the thousands of young people coming out of the universities this is an alternative,” he says.
Mr Serugga’s class is made up of equal numbers of men and women, who are mostly young.
They come to an upmarket coffee shop for their dose of the financial markets.
The bright projector on the screen flashes numbers, graphs and bright colours.
Joachim Ndhokero, a recent economics graduate, is still unemployed.
His father encouraged him to attend the classes to make some money but it has not been easy.
He lost over $900 (£664) in a trade gone wrong.
Before he lost all his money, he had just made a $200 profit.
Then he went to the cinema and lost everything.
“I think it was within like two hours.
“That day I learnt that for cryptocurrencies, since they have a bigger spread, they can easily bring in losses. If it’s a loss, it’s really a loss.”
The expert advice here is “use what you can afford to lose”.
Bank of Uganda has issued warnings about getting involved in the new and unregulated market.
Blockchain magic
But it’s not just the currency aspect of this technology that people think will transform the continent.
Digital security expert Neil Blazevic sees the blockchain technology which underpins cryptocurrencies as the more important innovation.
Blockchain is a form of recording data that cannot be tampered with or hacked. It can be used for documents from contracts drawn up by lawyers to land registries.
He lists many more applications.
“If African developers, entrepreneurs, and governments can leverage blockchain technologies, they may have a shot at tackling some of the continent’s most intractable problems of the unbanked masses, digital identities, untrusted voting systems, to name only a few applications,” Mr Blazevic explains.
“With the right support for innovation, and collaboration Africa could once again leapfrog over the digital divide and become a market leader just like it did in the move from landline communications infrastructure to the mobile phone ecosystem.”
One person who has fully embraced the African mobile phone revolution is Ms Akware.
She continues to watch over her digital wallet.
She knows that the value of Bitcoin could fall at any moment.
If all fails she will probably start again from scratch with a new venture.
For the moment she is holding on, hoping to buy her first car in two months.
Detailed BBC Story Here
