For years, Stephen Aluko lived “hand in hand” in Nigeria, home to a large but difficult African economy with a high unemployment rate. He worked odd jobs, from running cyber cafes to “soft media” and videography, constantly crashing in the back of his mind if he could pay for his next meal.
He was unemployed before hearing about bitcoin in 2017. At that time, his shoes were barely holding together.
When Aluko decided to commit to trading bitcoin – buying and selling the cryptocurrency for profit – that all changed. At first, he had second thoughts. He didn’t know what he was doing. But the side hustle and bustle worked so well it has now been trading the biggest cryptocurrency full-time for three years.
“My finances were not in good shape when I started trading, so you could say that bitcoin trading saved me,” Aluko told CoinDesk. “I’ve made enough money from bitcoin trading that I’ve been able to get married and be able to live comfortably without any debts.”
This is one example of someone unexpectedly using bitcoin to improve his life. And there are many other examples around the world, from Argentina to Iran.
“The money I’ve made from bitcoin trading has made it possible for me to invest in other businesses, be financially independent and live debt-free. So, I think I’ve made more money with bitcoin than if I had chosen another career path, ”he said.
The recent bitcoin bull run had nothing to do with Aluko’s success. CoinDesk spoke to Aluko about the rise in bitcoin trading in Africa in August 2020, before the price of bitcoin surpassed its previous all-time high, launching into a bull run.
Aluko knows plenty of other traders who were in a similar situation.
“It’s not unique to me,” he said. “I know a lot of people in Nigeria [who] trading bitcoin as a way to earn a living. I’ve 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 factor driving so many people to trade is the high unemployment rate in the region. The situation has only gotten worse since Aluko was unemployed. In Nigeria, for example, the unemployment rate has tripled over the past five years, swelling to 27%.
“Let’s say the numbers aren’t encouraging. There is a chance that if I had worked hard and done a lot more applying to companies, I might have gotten a decent job. But when I think about what I’ve achieved in three years as a result of trading bitcoin I’m sure I’ve made the right choice, ”said Aluko.
Other Africans have made the same career decision, trying to trade bitcoin and cryptocurrency. Quidax Africa exchange CEO and co-founder Buchi Okoro said this is one of the key reasons why people use the exchange.
“From our conversations with our customers, we have many people using crypto to earn a living by trading as a full-time job,” Okoro told CoinDesk.
Bitcoin trading versus speculation
Then there is speculation, which is a bit different from trading. Speculation is investing in a risky asset, such as cryptocurrency, in the hope that the price will rise and enrich the investor.
“Although bitcoin is used for general speculation around the world, it hits differently in Africa,” KenyaCoin, a pseudonym of a bitcoin fanatic from Kenya, told CoinDesk, highlighting unemployment rates, as was Okoro.
“There are a huge number of university graduates who can’t find employment in the country. Those with the means, especially those who studied economics, finance or technology, are taking speculation in the crypto space to either try to supplement whatever income they have or instead of ’employment,’ ”he added .
KenyaCoin speculates that speculation is “the main 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 a rainbow.
There is also a dark side to this trend. Some people are hurt from trading and speculation. Much like the rest of the world, as Africans have explored cryptocurrency as a path to a better income, some have lost money or fallen for a number of scams.
Many Nigerians, for example, first heard about bitcoin through MMM, a Ponzi scheme in Russian that promised investors 100% returns. When MMM did not fulfill these high promises, participants lost their money.
KenyaCoin pointed to the notorious cryptocurrency scams of the BitClub network and Onecoin as other examples of “bad” projects that have flourished in the region, as well as lesser-known scams like Nurucoin and Crowd1.
“Scams often target victims in developing countries, because regulations in the finance and investment space are not always robust and / or enforcement is oftentimes 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 access to which cryptocurrency projects are actually useful to them rather than harmful.