Bitcoin price should not be nexus of discussion

There is a misplaced focus on Bitcoin price, which in turn creates a wrong basis for discussions around crypto-currencies in general.  The current dynamics around the nascent crypto-currencies make it impossible for its price to stabilize in the short term.

Different interest groups, the regulators, inexperienced investors, idealists, opponents of crypto-currencies all play a part, wittingly or unwittingly, in causing the high price volatility we see in Bitcoin and other digital currencies.

As each day passes, more and more people get involved in the discussion about getting rich quickly via Bitcoin and this ensures a steady flow of new crypto-currency traders or buyers. In most cases, these are less experienced investors enticed by allure of quick gains. The fluctuation of Bitcoin price does not deter, in fact it prods novice investors into investing without clearly understanding everything about crypto-currencies.

Government regulators, too eager to control crypto-currencies also get into the mix via their statements or threats to the whole digital currency ecosystem. Obviously this has an effect on prices of these currencies in short term. People who believe in government statements will be persuaded to leave crypto-currencies and this affects the price.

Next, there are individuals that, on the surface, appear to support crypto-currencies yet in reality, their support or lack thereof, is part of a calculated plan to reap huge profits off the digital currencies. Again, this has an effect on the prices. For instance, one billionaire labeled Bitcoin nothing more than a bubble, the price tanked and immediately after, it was revealed that the same person would be investing in Bitcoin. Such double speech by prominent people also affects the price of Bitcoin.

That Bitcoin makes global headlines is not in doubt, however, only a few in the mainstream media do try to simplify this complex story on an on-going basis for benefit of their audiences. The BBC has a short Bitcoin video, which attempts to explain the topic in less than three minutes. There are of course, countless independent videos that try to project Bitcoin in positive terms, but again, a lot of these videos are created with the intention of enticing more people to buy. This also has an effect on the price movement of Bitcoin since this creates demand.

As the year 2018 came to a close, the approximately 70% drop in the price of Bitcoin became the nexus of crypto-currency debates across much of the global media.

In the developing world too, the discussions appear to have veered off the usual path for a new product, which is education, awareness and more education. In Africa, some people are now more concerned about the alleged terrorism financing or money laundering associated with crypto-currencies before they even know the basic story, not only about crypto-currencies, but the Blockchain technology that underpins Bitcoin.

The deluge of negative news against crypto-currencies is not helping efforts to highlight the real rationale for the creation of Bitcoin in the first place. There is still a chance that people most likely to benefit off a decentralized payments platform, may not even get the chance, as the on-going war of attrition crypto-currencies is hindering the widespread adoption of these technologies.

Nevertheless, crypto-currencies have shown resilience, which in turn emboldens some of the hardcore supporters to keep soldiering on. Perhaps, these supporters need to increase awareness in communities that need crypto-currencies the most but are ignorant at the same time.

As explained in previous articles, communities in the developing world who are excluded from the global financial system, stand to benefit from decentralized payment platforms. Already, the innovative mobile money platforms such as Mpesa and Ecocash have proved technology can bring financial inclusion to long marginalized communities.

Blockchain has many elements that are even better than mobile money services and one such element is cross-border payments. Popular mobile money services are only effective in the countries where the service providers operate. It is impossible to sent money from Zimbabwe via mobile phone to someone in Kenya without making prior arrangements with banks.

 This means sourcing the foreign currency, which has costs and meeting regulatory requirements, another costly process. In other words, with Blockchain, there are no other intermediaries to contend with before a transaction goes through.

With Blockchain, the transfer is seamless, no middle man/women, no currency exchange, clients pay directly and the funds are received instantly. Already, there is one crypto-currency exchange, PaxFul, which is enabling cross-border remittances by expatriate Africans to their homelands, according to a report by CoinDesk.

It is these elements of crypto-currencies that should be the focus of debate and not the price volatility. When marginalized communities begin to understand crypto-currencies in this context (remittances), it is possible then to see a faster embrace of the technology in the developing world. As long as the technology serves a need, it will become part of the mainstream just as mobile money services have become part of the mainstream in some African countries.

As explained before, crypto-currencies attract people from different backgrounds with different agendas, therefore it is hard to get everyone behind the long term agenda of the creators of Bitcoin. However, those motivated by the desire to see crypto-currencies grow and become part of the mainstream must step up efforts to engage communities where awareness is still a challenge.

This means taking the fight to opponents, some who even use religion to try and block the ascendancy of crypto-currencies and the Blockchain technology. The world needs alternatives to powerful centralized systems and more importantly, the world needs competition everywhere so that citizens rights or welfare is enhanced.