Why South Africans are obsessed with Bitcoin

During the Bitcoin craze of 2017, South Africans from all walks of life eagerly climbed on the rocketing cryptocurrency in an effort to make some quick returns.

Cryptocurrency exchange Luno, which operates in South Africa and allows locals to buy Ethereum and Bitcoin with rand, saw massive growth during this period as locals flocked to buy Bitcoin.

While the volatile value of cryptocurrency eventually came tumbling down, there were many South Africans who had made a fair amount of money from either mining or investing in cryptocurrency.

According to a recent study by Luno, the readiness of South Africans to adopt blockchain-based tokens can be attributed to a desire for changes to the financial system.

This is certainly something that can be delivered by Bitcoin and other cryptocurrencies, and the fact that the blockchain itself is immune to government control is certainly attractive to many South Africans.

Bitcoin-crazed

South Africans are still buying Bitcoin and Ethereum on the Luno exchange, as well as constantly checking the price of these cryptocurrencies for fear of missing another wild ride.

However, it wasn’t only self-styled cryptocurrency “investors” who became obsessed with Bitcoin when it first took off; South Africa was home to a large number of cryptocurrency miners as well.

Many South Africans purchased GPU mining rigs and ASICs (Application-Specific Integrated Chips) in an effort to mine digital tokens and create a steady supply of wealth.

Bitmart previously told MyBroadband that at one point in 2017, the company was selling an average of 53 GPU mining rigs per day, and delivered over 7,000 rigs in 2017 alone.

Graphics card prices eventually returned to normal as the hype around cryptocurrency fell along with its price, but South Africans are still interested in digital tokens along with their implications on the global financial system.

Changing the system

Luno Africa general manager Marius Reitz said that South Africans and users in other developing countries are seeking a change to existing financial system as shown by Luno’s “Future of Money” study.

“Individuals in these markets cannot afford to, and should no longer need to, pay extortionate exchange rates, accept national currency devaluation or lose out when they simply transfer money,” Reitz said.

“Access to a more inclusive financial system will enable people everywhere to think of new and better ways of exchanging value and technology allows this.”

Luno surveyed 7,000 respondents across various countries about their economic conditions to better understand factors which influenced the purchase of cryptocurrency.

South Africa showed the highest percentage of individuals saying they did not feel very secure in their current financial situation. The survey also found that over 91% of respondents in South Africa pay for a personal bank account and 75% use mobile banking.

“We anticipate that developing markets will be the lead adopters of cryptocurrency coins being launched by some of the of the largest tech giants,” Reitz said.

“People in emerging markets tend to be more financially savvy out of necessity, according to our research. This means that they need the benefits that new coins can offer and they understand them.”

Luno Future of Money 2019

Now read: Criminals will spend $1 billion in Bitcoin on the Dark Web this year

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Why South Africans are obsessed with Bitcoin