Obi Nwosu is the CEO and co-founder of Coinfloor, the UK's longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.
Welcome to The Road to Bitcoin Hegemony, a weekly analysis of some the most interesting developments in Bitcoin and why they matter in Bitcoin's journey towards monetary dominance.
A continent of such stunning diversity and so rich with natural resources was always going to be attractive for entrepreneurs, explorers and - sadly - exploiters. But Africa’s most precious resource is not its precious metals or rare minerals, its human capital.
Africa is set to account for half of all world population growth over the next 30 years and will be the world’s second most populous continent by 2050. Wise investors are therefore planning for a new “Scramble for Africa” in the coming years, but one that’ll be very different from the last two centuries of colonialism.
Those searching for Bitcoin’s next big opportunity should therefore look to Africa, a continent that is not only brimming with opportunity but which also has an urgent need for an alternative to a string of failed fiat currencies.
As Robert Breedlove points out, hyperinflation is a daily occurrence in many African countries. And that’s something I know all too well from my own experience. Back in the 1980s, I paid a visit to my relatives in Nigeria. I vividly remember that one naira was worth more than one dollar. Now it’s fast approaching 400 naira to the greenback (and the dollar isn’t doing too well since it came off the gold standard itself!).
Zimbabwe, meanwhile, provides a stark reminder of what happens when inflation runs riot. People lose their livelihoods and are unable to afford essentials. Economies are decimated. And opportunity withers on the vine.
So we have a clear opportunity and an urgent need for inflation-proof alternatives to clapped-out currencies. But there’s another angle to the Scramble. We’ve grown used to the patronizing narrative that the continent somehow needs outside help to overcome its challenges. Africans are proving that wrong: they are using Bitcoin as it was intended, to take the initiative and wrest power away from corrupt elites who have mismanaged their economies.
The volume of Bitcoin transfers to and from Africa has jumped by 64 per cent in the last 12 months, while the value has risen even more. In the continent’s most populous country, Nigeria, small crypto transfers totaled almost $56 million in June, a figure nearly 50 per cent higher than a year ago.
As an Anglo-Nigerian, this is music to my ears. But it pleases me even more as a Bitcoin evangelist, because this is exactly the sort of empowerment that Bitcoin was supposed to bring to under-served and under-banked people who, nevertheless, are fired with ambition to take control of their financial future.
Isak Dinesen, author Out of Africa (perhaps the most famous love letter to the continent), wrote that “you know you are truly alive when you’re living among lions”. Well, keep an eye on the Bitcoin lions of Africa: we’re about to hear them roar.
Last week’s fishy fiasco dominated the headlines, which was a shame for several reasons. Not least because it was a week chock-full of significant milestones for Bitcoin.
For me, the biggest news of last week wasn’t SushiSwap. Much more important was the revelation that Bitcoin hash rates have hit another all-time high, even while Chinese mining suffered a spate of floods and power outages. Meanwhile, Bitcoin’s active address count (30dma) is also approaching record highs with no sign of a slowdown.
That means the Bitcoin network is more protected than it has ever been, while all the signs are that real on-chain usage of Bitcoin is increasing. So much for the doom mongers predicting Bitcoin’s swift demise.
The good news didn’t stop there. While many in the media were busy slicing and dicing their SushiSwap stories, crypto exchanges experienced a 14-month high in website visits during August. At the same time, on-exchange balances are now down by 12 per cent since the February peak, with some $3.5 billion worth of Bitcoin withdrawn in the last six months.
So not only do the customers keep flocking to crypto: more of them are taking custody of their coins themselves. This is key because it suggests that consumers are getting the message that if they ain’t your keys, they ain’t your coins.
And it’s not just metrics. As both Samson Mow and the BTC Times noted, Bitcoin has taken another leap forward towards implementing Schnorr signatures. This represents an important step towards the next major update which we hope will deliver even better scalability, privacy, and functionality of the Bitcoin system.
It’s tempting to get caught up in the latest coin-troversy, but the lesson here is to look past the noise and focus on the fundamentals. If you examine the metrics that matter, the direction of travel is clear: Bitcoin is marching steadily towards hegemony.