Cryptocurrencies, since their launch in 2009, have not had an easy route in the monetary world. The digital currency sent gradually beginning to gain its ground as it is slowly becoming a popular form of payment in most places around the globe.
Recently, there has been a steady growth of interest as most countries are beginning to recognize its prospects. On the other hand, some African countries are still very doubtful when it comes to crypto as they seem to believe this form of currency is, in itself, a scam.
African Skepticism Towards Crypto
Over the years, crypto has been praised as well as criticized. To some, crypto holds to the key to the future but in some parts of Africa, the digital currency has never been short of controversy. And rightly so.
It is no secret that Africa is a hotbed for crypto scams. On many occasions, Africans have been targeted and exploited with the idea of investment opportunities which often promise exceptional results within a short time.
These claims usually prove to be false as the swindlers have always disappeared after having conned so many unsuspecting people of their savings. Some of the worst crypto scams to have hit the African continent include Bitcoin lottery scam, Bitcoin global, and MMM Bitcoin amongst a host of others.
The high rate of bitcoin scams has resulted in Africans losing trust in digital currencies and has ultimately contributed to the slow rate of Bitcoin adoption in some regions of the continent.
Many African countries have expressed negative sentiments concerning the use of crypto and have discouraged its use. In Kenya, for instance, the Central Bank of Kenya has been totally unsupportive of cryptocurrencies and has rejected its use, due to “their unregulated nature”.
Also, other African countries such as Uganda, Botswana, Nigeria, and Tanzania, to mention a few, have expressed skepticism towards the integration of the digital currency. One collective reason for this lack of cooperation is due to its decentralized structure.
Cryptocurrency is a digital currency designed as a medium of exchange. Most cryptocurrencies are decentralized networks that run on a distributed public ledger known as the blockchain. Bitcoin is the first decentralized cryptocurrency.
Unlike any other currency, Bitcoin facilitates a peer-to-peer instant exchange. Bitcoin gives you total possession and control of your wallet without you having to go through a third party (no identifying information is needed to start a Bitcoin account).
Whilst this decentralized structure is the feature that makes cryptocurrencies trustworthy, the exact feature has also constituted the major source of attraction for scammers.
Why Bitcoin Is A Choice For Scammers
Bitcoin, just like most other cryptocurrencies, is a digital currency that operates independently, without any supervision from the government.
While its independent nature has triggered numerous advantages, this same feature makes it prone to all sorts of risks. Sitting comfortably on the top of this list is crypto fraud.
Any bitcoin user can easily rely on digital signatures and the public history of transactions stored on the blockchain, to prove ownership.
Because of its anonymous nature, Bitcoin is increasingly used in scams. There are dozens of different types of crypto scams ranging from giveaway to sextortion, fake exchanges, fake ICOs, bitcoin recovery, Ponzi schemes, video scams, and so on.
July 15th, 2020 recorded one of the greatest crypto scams of all time. Hackers were able to gain access to a good number of prominent Twitter accounts, for bitcoin giveaway fraud. They were able to get away after stealing over $100,000 worth of bitcoin.
Over the past 4 years, 38 million US dollars in bitcoin alone have been confirmed stolen by scammers.
How Can The Skepticism Be Reduced
For the reason discussed above, most African countries are reluctant to embrace or even accept the idea of cryptocurrency and the blockchain network.
However, this skepticism can be reduced through the creation of decentralized but regulated platforms that are supported either by the government or other recognized bodies.
On top of that, the government needs to come to the realization that crypto comes with advantages that can contribute to the growth of a country. The government needs to start setting up a regulatory framework that works well for crypto.