The Paxful team went to Nairobi, Kenya recently, shortly after the construction of the second school of their #BuiltWithBitcoin program. The second school in Rwanda was completed in December 2018, leaving 98 more to go to fulfill Paxful’s promise of 100 schools all over Africa. In partnership with Zam Zam Water, Paxful has created its #BuiltWithBitcoin program. Not only have they already built 2 schools in Rwanda but they have also provided scholarships to female Afghan refugees.

While in Kenya, Paxful CEO Ray Youssef, sat down with local blockchain news site BitcoinKE to discuss how Africans are applying peer-to-peer finance in their real lives and what he’s learning from the African community.

Peer-to-peer Finance and Bitcoin: Real-life Cases

The Paxful CEO iterated that it’s important to understand that bitcoin is only a building block in the peer-to-peer financial revolution. Not only has peer-to-peer finance revolutionized the way people spend and earn their money, but it allows people to break through barriers and circumvent capital control. Peer-to-peer finance is the big picture while bitcoin is the perfect vehicle being used to achieve that picture.

Youssef has been a long-time advocate of peer-to-peer finance. He even claims that Africa is ahead of Western countries because African communities have started to adopt peer-to-peer finance. With that being said, here are some of the real-life uses for bitcoin and peer-to-peer finance:

Remittances

Since bitcoin remittances have lower fees and work more efficiently than standard remittances, people are starting to use the bitcoin method more. Standard remittances have too many barriers and additional fees to be sustainable for people in Africa. According to the statistics of Clovr, a blockchain research company, 15.8% of the world’s remittances are done with cryptocurrency. Considering that it only falls behind online services (like PayPal), money transfer services (like Western Union), and traditional wire transfers (via bank or credit union), it places itself in the top 4 among the money transferring methods in the world.

People have also found opportunities to take advantage of certain markets to make a little money on the side. For example, bitcoin is more expensive in India, around 10% above the market price (due to legality issues with the government). If an Indian living in the United States has access to an American bank account, he/she can buy bitcoin in the United States and sell it in India for a higher price.

Earning Income

As said earlier, peer-to-peer finance has revolutionized the way people spend and earn their money. Peer-to-peer marketplaces allow more personalized trading experiencing thus allowing more users to be in control of their finances. Sellers can set their own preferences (like profit percentage, location, payment window, etc.) and buyers will be able to choose their offers based on a combination of those preferences and their own.

There are also hundreds of payment methods available on these platforms, making it extremely easy to buy and sell bitcoins. The payment methods also make bitcoin’s price a little irrelevant since people are constant, converting their money into different forms.

Wealth Preservation

People from countries with struggling economies can look to bitcoin or other cryptocurrencies to preserve their wealth. Every day, people from those countries see the value of their fiat currency diminish more and more. Africa is currently experiencing high inflation but a good example of this real-life use would be Venezuelans. According to Trading Economics, the annual inflation rate of Venezuela jumped from 1.70 million percent in December 2018 to 2.69 million percent in January 2019. Now, people are looking at bitcoin and other cryptocurrencies to get them out of the economic mess they’re in. Bitcoin is essentially the way out for them.

Making Payments

Paying for things is easy for people in the Western hemisphere. Practically everyone in America has a credit card or debit card. With that credit or debit card, they can buy things online and have their purchases sent directly. It’s easy and efficient but unfortunately, it isn’t like that all over the world.

Places like South America, Africa, and Southeast Asia struggle with these kinds of payments due to card limitations. For example, spending on Nigerian debit cards is usually limited to 100 USD. In some cases, the limit will be raised to 1,000 USD for the wealthier families. According to Ray Youssef, this limitation is “totally unworkable”. If people decide that they want to buy the latest iPhone or Android, it’s literally impossible with that kind of limit. By using peer-to-peer marketplaces, people can trade for credit and buy their iPhone another way (like AliPay or PayPal).

E-commerce

There are a lot of people forming businesses on their own (usually on websites and/or social media profiles), and Africa is no exception to that. Bitcoin allows people to widen the reach of their business by allowing people to pay from anywhere in the world. Business owners can accept bitcoin as payment and use peer-to-peer marketplaces to turn bitcoins into cash.

There’s a Lot to Learn From the African People

The African community is constantly showing creative ways to bypass the restrictions that regular people have. They bypass these restrictions through peer-to-peer finance and they completely embrace this concept. They’re showing everyone in the world that they don’t have to be restricted by financial barriers. They’re showing everyone that they, too, have the power to control their own finances.

What do you think about the creativity of the African people? Are you willing to embrace the power of peer-to-peer finance as they do? Let us know in the comments section down below!