Today, cryptocurrencies are known around the world. Thanks to the volatile rise of Bitcoin and Blockchain technology. While many people have heard of cryptocurrencies, not many people understand what they are and how they are used.
A cryptocurrency is a digital or virtual currency. It is designed to make it nearly impossible to double-spend or counterfeit. Many cryptocurrencies are built on a decentralized peer-to-peer network. Such like blockchain. To learn more about blockchains, please read our article What is a Blockchain.
Africa is growing from the use of the use of Cryptocurrency. There are sayings from some Economists that it is a disruptive innovation that will blossom in the continent. Because it is internet based, cryptocurrencies are not bound by geography or by a central banking system. This means that cryptocurrency transactions can remove the bureaucracy and bottlenecks. The kind that exist in the traditional African banking system.
At the time of writing this article, Bitcoin has reached a record high of $49,951 US dollars. It is already used frequently in Botswana, Ghana, Kenya, Nigeria, South Africa, Uganda, and Zimbabwe. For other countries with high inflation, such as Egypt, Ghana, Malawi, Mozambique and Zambia, cryptocurrencies offer a decentralized currency option. This can easily be earn and spent around the world using mobile technology. This is a positive for Africans. Especially those who live without access to banks. Or those who fear the collapse of the banking system or arbitrary appropriation of money by the government.
If you would like to safely use cryptocurrencies, you will need to store them in a digital wallet. A wallet is a digital or physical storage device that stores cryptocurrencies. There is either a Hot Wallet or a Cold Wallet.
A Hot Wallet is connected to the internet. This means transactions can be made quicker.
A Cold Wallet is not connected to the internet. It can be safer provided they are stored in a secure location.