For years, Stephen Aluko has lived “hand to hand” in Nigeria, where there is a large struggling economy in Africa with high unemployment. He worked odd jobs, from running internet cafes to soft media and videography, constantly thinking in the back of his mind if he would be able to afford his next meal.
He was unemployed before he heard about bitcoin in 2017. At that time, his shoes hardly held together.
When Aluko decided to commit to trading bitcoin – buying and selling the cryptocurrency for profit – that all changed. At first he had doubts. He didn’t know what he was doing. But the secondary turmoil has worked so well that it has now been trading the largest full-time cryptocurrency for three years.
“My finances weren’t in good shape when I first started trading, so you can say bitcoin trading saved me,” Aluko told CoinDesk. “I made enough money trading bitcoin to get married and live comfortably without any debt.”
This is an example of someone using Bitcoin in an unexpected way to improve their life. And there are many other examples around the world, from Argentina to Iran.
“The money I earned from trading bitcoin allowed me to invest in other businesses, be financially independent and live debt free. So I think I made more money with bitcoin than if I had taken another career path, ”he said.
Bitcoin’s recent bull run has nothing to do with Aluko’s success. CoinDesk spoke to Aluko about the rise of Bitcoin trading in Africa in August 2020, before the price of Bitcoin broke its previous high, setting off on a bull run.
Aluko knows many other traders who have found themselves in a similar position.
“It’s not unique to me,” he says. “I know a lot of people in Nigeria [who] trading bitcoin as a way to earn a living. I also taught people how to trade bitcoin because I know how bitcoin trading has changed my life and I want to be able to help people.
He argues that one of the factors that drives so many people to trade is the high unemployment rate in the area. The situation has only gotten worse since Aluko was unemployed. In Nigeria, for example, the unemployment rate has tripled over the past five years, reaching 27%.
“Let’s just say the numbers are not encouraging. There is a chance that if I had worked hard and applied a lot more in companies, I might have found a decent job. But when I think about what I have accomplished in three years through the bitcoin exchange, I’m sure I made the right choice, ”said Aluko.
Other Africans have made the same career decision, trying bitcoin and cryptocurrency trading. Buchi Okoro, CEO and co-founder of Quidax Africa Stock Exchange, said this is one of the main reasons people use the exchange.
“From our conversations with our clients, we have a lot of people who use crypto for a living by trading as a full-time job,” Okoro told CoinDesk.
Bitcoin trading vs speculation
Then there is speculation, which is a little different from trading. Speculation invests in a risky asset, like cryptocurrency, in the hope that the price will rise and enrich the investor.
“Although bitcoin is used for speculation all over the world, it hits differently in Africa”, KenyaCoin, a pseudonymous bitcoin enthusiast from Kenya, told CoinDesk, highlighting unemployment rates, like Okoro.
“There are a large number of university graduates who simply cannot find employment in the country. Those who can afford it, especially those who have studied economics, finance or technology, engage in speculation in the crypto space to try to supplement their income or as a substitute for “employment” ” he added.
KenyaCoin assumes speculation is “the number one activity involving Bitcoin and crypto on the continent”.
Risk of Bitcoin and crypto scams
However, the rise of bitcoin and crypto in Africa has not necessarily been rainbows.
There is also a dark side to this trend. Some people have been hurt by trade and speculation. Much like the rest of the world, as Africans have explored cryptocurrency as a way to earn better income, some have lost money or fallen into a number of scams.
Many Nigerians, for example, first heard of bitcoin through MMM, a Russian Ponzi scheme that promised investors a 100% return. When MMM failed to keep these noble promises, participants lost their money.
KenyaCoin pointed to the infamous BitClub and Onecoin cryptocurrency scams as other examples of “bad” projects that have thrived in the region, as well as lesser-known scams such as Nurucoin and Crowd1.
“Scams often target victims in developing countries, as finance and investment regulations are not always strong and / or enforcement is often lagging behind,” he said. .
Bitcoin and other cryptocurrencies are still new, so people in Africa – as well as the rest of the world – still have some idea of which cryptocurrency projects are actually beneficial to them rather than harmful.