This episode will focus on answering four things.
1. What is blockchain,
2 what is crypto currency,
3. What is bitcoin.
4. How can they be used in Kenya?
If you’ve never heard of those 3 phrases, Bitcoin, crypto currency or blockchain, well, you are not missing much apart from potentially being scammed but hold on to that thought.
There are better explanations for this terms and am going to link them below but am going to explain in the simplest terms. Blockchain is the technology that makes the crypro currently work. Bitcoin is an example of a crypto currency and there are hundreds of different crypto currencies.
Still confusing? Lets make it simpler. Think of a block that has numbers 1 to 12. This block can only hold 12 numbers. Once it is full, it gets closed and verified and then a new block is created. This creates a second block. This second block will also be filled with numbers until it reaches its capacity of 12 numbers then closed and verified and another block created. This blocks create a chain and hence the name blockchain.
Once a block has been closed, the information in it is stored permanently and cannot be edited again. This is what makes the blockchain to be very secure because nobody can edit information in previous blocks single handedly. That is block chain.
What is crypto currency? In my example, I said a block can have numbers 1 to 12. Crypto currency is just a form of information that can be stored in the block chain. The blocks can be modified to hold any kind of information. Medical records, title deeds and even money. And this is where crypto currency comes in. Crypto currency is simply digital money and bitcoin is an example of a digital money. Think of digital money as world currencies. There are dollars, euro, shillings, indian rupee, etc. In crypto currency world, there is bitcoin, etherium, xrp, and even local crypto currency like ****.
When you want to buy bitcoin, you will get a unique address which will act like your bank account number. After you buy the bitcoin, you can store it in a wallet which is like your bank. The only difference with a bank is that you are the one in charge of it and since it is not directly linked to your name, your bitcoin address and wallet can be anonymous making it more secure.
How do you buy the bitcoin?
I have found 3 solutions so far which are the easiest ways to buy bitcoin.
1. localbits which is technically like a face to face transaction.
You can give someone cash or send them money via mpesa, give them your address and they will send you the bitcoin to your address.
2. Using skrill. You will download the app or use their website and once you register, you can be able to buy bitcoin or other crypto currencies right from the app. You can top up your skrill account using your atm card if your bank allows online transactions. Once you topup skrill, you can buy crypto for as low as ksh 1200, (12usd)
This also works like skrill. Download the app and use your atm card to buy crypto. One advantage of cex is that it supports many types of crypto currencies and you can use it to trade. Like the forex exchange, trading crypto involves moving across different cryptos and basically just trying to buy when low and selling when it goes up and you can turn a profit. I wouldn’t advocate for anyone to do this unless they know what they are doing in that case, all the best!
Finally. What advantages do you have from using bitcoin beyond bragging rights? You can use it as an investment since most countries recognise bitcoin as an asset. If the prices go up, you an end up having a sizeable profit. Another use case is using it as an alternative to banks when sending or receiving money abroad. The blockchain is faster with no paperwork and no borders. This is yet to catch on and maybe in the future it will become a viable option.
The blockchain has more use cases. Our government can adopt it to use as a secure option during elections and things like rigging will be things of the past. Banks can use it to move money faster than cheques among other things that need accountability and efficiency.