A few possible solutions are:
1. Mining
It’s generally accepted that electricity cost in Kenya, and by extension Africa, is too expensive to use to mine cryptocurrency but that statement is just not true. While it’s true that you could mine profitably in other parts of the world you can still mine profitably here. A quick back-of-the-envelope calculation shows that if you were to purchase the latest Antminer, and use it to just mine bitcoin at just the peak electricity cost in Kenya, it is possible to make your money back.
2. Remittances
We already have people that are taking advantage of the negative transfer fee that exists when you send money to Africa — increasing that number could bring down the price of bitcoin in Africa.
Remittance costs to Kenya using companies like Western Union and MoneyGram, from UK, cost about 6% of the money being sent so if someone in the Diaspora is holding $100 and wants to send it, only $94 actually gets to the recipient. But with the difference in the price of bitcoin between Kenya and the Western countries, it’s now possible to get a negative transfer fee: that is, someone wants to send $100 but more than $100 will actually get to the recipient.
3. Exporters opting to get paid in bitcoin
This would make sense to them, firstly because they get negative transfer fees when they get paid from abroad. Secondly, because they get paid in a currency they easily convert to a local currency but can do so much with if they have to do business across the border for example.
4. FDI coming in bitcoin
For the same reasons exporters would/should want to get paid in bitcoin, African companies/startups with offshore investors could/should also opt to have investment money sent in bitcoin.
5. More cryptocurrencies apps being launched on the continent
Bitcoin was the first cryptocurrency and it was designed to solve a specific problem: allowing online payments to be sent directly from person to person without going through a financial institution. However, bitcoin is not the only player in the game. There are hundreds of other cryptocurrencies that work in a way that is similar to or was inspired by bitcoin and each of these cryptocurrencies solve a very specific problem for either a specific market or a multi-sided market.
There are 87 other cryptocurrencies that have a market cap that is greater than $1million.
Cryptocurrencies are not hard to convert to bitcoin. Getting more cryptocurrencies being developed on the continent to solve problems that are specific and unique to the continent will increase the bitcoin in circulation on the continent and this will reduce the price of bitcoin on African exchanges.
To those wishing to venture into that space, David Johnston has some excellent whitepapers on the best practices one should follow when launching their own cryptocurrency and on where these cryptocurrencies get their value from.
