An air of mystery surrounding cryptocurrencies is holding back Kenyans from taking part in ongoing massive wealth distribution. Ten years since emerging in 2007, Bitcoin and cryptocurrencies are no longer a passing fad.
Over $200 billion of value has been created in what is just the beginning of an open alternative financial system. Just like anyone can download an app on a smartphone and connect to the world without asking for permission.
In Kenya today you can buy, trade, exchange, hold and store cryptocurrencies as long as you do not break any existing laws.
Get started with cryptocurrency
For starters, you need what is called a blockchain wallet, an app that lets you store, send, and receive digital assets. There are dozens of options to choose from: online, on android and apple store for example blockchain, mycelium and coinomi.
Once you download and install one, the next step is to secure your wallet in case you forget your password or lose your phone. Some people who have ignored backups as a safety precaution have fallen prey to sophisticated hacks. Add a strong pin and back up your 12 word phrase to help you recover your bitcoin in the worst of scenarios.
Your wallet now needs something to put in it, otherwise, what is it good for? So you need to find yourself some bitcoins to add to your wallet. Buying bitcoins in Kenya is not easy, there aren’t many services that cater to Kenyans. You have two options when considering where to buy or sell bitcoin for Kenya shillings.
One option is the members of the Blockchain Association of Kenya who broker bitcoin and digital assets locally. Another option is to head over to an online peer-to-peer marketplace where you can exchange regular money for digital assets. Localbitcoins.com is a marketplace that connects buyers and sellers locally.
Besides, investors can find very useful information and guidance on cryptocurrencies on Coinformant.
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How you choose to settle the transaction is up to you and the broker – cash, bank, mobile money or airtime. Typically, brokers will ask you for your bitcoin address – a long hexadecimal string that lets other people deposit bitcoins into your wallet. To receive bitcoins, go to your wallet, click on receive and copy a string that looks like this 1P1jyUGjQpnZ5daExhvccWPcdZ2AVCviTW; this is your bitcoin wallet address.
The Blockchain Association of Kenya recommends only transacting with trusted brokers with stellar reputation. Fraud and scams are a big challenge in acquiring, trading or investing in blockchain assets. So now that you have bitcoins in your wallet, what do you even do with them?
Make Online and cross border payments: Well, you could send them to a friend or family member wherever they are in the world as a gift or remittance. Bitcoin works as a payment network, so anyone can instantly make online payments and send or receive money from abroad.
For instance, Anthony Muisyo, a student from the University of Nairobi uses cryptocurrency to place bets on online gambling sites that accept bitcoin. Mukiri a car dealer on Ngong Road sends bulk payments to Japan using bitcoin. Since Japan’s parliament passed a law recognizing bitcoin for payments in April this year, Japanese car dealers now accept bitcoin.
Become a digital commodity broker and trader: Alternatively, you can always settle for becoming a digital asset dealer, broker or agent. From the comfort of your home or workplace or while roaming, you can trade like insurance brokers, or the exhibition traders of Nairobi or the maize truckers of Eldoret. Cryptocurrencies are just like commodities – only that they are digital commodities so and easier to trade. You don’t need a warehouse or physical store, all you need is a smartphone, a reputation and a stream of clients.
Sit and hold: Your last option is to just sit and hold your block-chain assets and hoping the price goes up. Cryptocurrency is a new asset class that is attracting all types of retail and institutional investors. After dismissing cryptocurrencies in the past, mainstream bankers are waking up to this sweeping wave. At an IMF Annual meeting in Washington in November last year, IMF Chief Christine Lagarde warned central bankers that cryptocurrencies pose a real threat to legacy banking and urged members not to dismiss them.