Four months ago, Abolaji Odunjo made a fundamental change to his business selling mobile phones in a bustling street market in Lagos: He started paying his suppliers in bitcoin.
Odunjo sources handsets and accessories from China and the United Arab Emirates. His Chinese suppliers asked to be paid in the cryptocurrency, he said, for speed and convenience.
The shift has boosted his profits, as he no longer has to buy dollars using the Nigerian naira or shell out fees to money-transfer firms. It is also one example of how, in Africa, bitcoin - the original and biggest cryptocurrency - is finding the practical use that it has largely failed to elsewhere.
Bitcoin helped to protect my business against the currency devaluation, and enabled me to grow at the same time, Odunjo told Reuters from his two-by-eight meter shop.
You dont have to pay charges, you dont have to buy dollars, the 30-year-old said, raising his voice above the sound of loud haggling and the honking horns of scooters.
Odunjo is one of many people at the heart of a quiet bitcoin boom in Africa, driven by payments from small businesses as well as remittances sent home from migrant workers, according to data shared exclusively with Reuters and interviews with around 20 bitcoin users and five cryptocurrency exchanges.
Monthly cryptocurrency transfers to and from Africa of under $10,000 - typically made by individuals and small businesses - jumped more than 55 percent in a year to reach $316 million in June, the data from U.S. blockchain research firm Chainalysis shows.
The number of monthly transfers also rose by almost half, surpassing 600,700, according to Chainalysis, which says the research is the most comprehensive effort yet to map out global crypto use. Much of the activity took place in Nigeria, the continents biggest economy, along with South Africa and Kenya.
This represents a reversal for bitcoin which, despite its birth as a payments tool over a decade ago, has mainly been used for speculation by financial traders rather than for commerce.
Why a boom in Africa? Young, tech-savvy populations that have adapted quickly to bitcoin; weaker local currencies that make it harder to get dollars, the de facto currency of global trade; and complex bureaucracy that complicates money transfers.
The bitcoin users interviewed by Reuters, based in five countries from Nigeria to Botswana, said the cryptocurrency was helping people make their businesses nimbler and more profitable, and helping those working in places like Europe and North America hang on to more of the earnings they send home.
Yet risks abound.
Bitcoin and other cryptocurrencies are unregulated in many countries and their legal status is unclear, meaning there is no safety net and little recourse if you lose funds.
For many, converting local currencies to and from bitcoin relies on informal brokers. Prices are volatile, and buying and selling is a complex process that demands technical knowledge.
In 2018, the Nigerian central bank warned cryptocurrencies were not legal tender, and investors were unprotected.
Byers Market Newsletter
Get breaking news and insider analysis on the rapidly changing world of media and technology right to your inbox.
A steady stream of customers comes and goes from Odunjos shop, one of a dozen units along a dark corridor in an indoor section of the market known as Computer Village.
Odunjo makes two or three transfers a month of around 0.5-0.7 bitcoin ($5,900-$8,300) each, to suppliers in Shanghai and Zhangzhou. East Asia, Chainalysis found, is one of the top partners for bitcoin trading with Africa.
Odunjos trades offer a microcosm of the wider trends at play in both Nigeria and across the continent.
In Nigeria, small cryptocurrency transfers totalled nearly $56 million in June, nearly 50 percent more than a year before. The number of transactions jumped over 55 percent to 120,000.
Gauging how cryptocurrencies are used in particular locations is tough, though. Digital coins offer a high degree of anonymity, and though the value of transactions can be tracked on the blockchain, the identity or whereabouts of a user cannot.
Chainalysis, which tracks crypto flows for financial firms and U.S. law enforcement, gathered the data by analysing web traffic and trading patterns, though locations can be obscured by virtual private networks. It separated transfers of under $10,000 from larger sums common among professional traders.
With Nigerias oil-dependent economy rocked by low crude prices and COVID-19, the central bank has twice devalued the naira this year. As a result, Odunjo and other importers must pay more to buy increasingly scarce dollars.
The nairas fall has pushed many Nigerians towards bitcoin, the interviews showed, as they seek methods of purchasing goods from overseas without having to buy dollars.
Sylvester Kalu, who runs a clothing starch maker in Uyo, eastern Nigeria, uses bitcoin to buy supplies from Istanbul and Shenzhen.
Everything is oil. When the price of oil dropped, forex became scare, he said. That became a very big problem.
The 30-year-old said his transactions totalled around 2 bitcoin ($20,000) a time, adding: I dont need anyone in the banks, I dont need a person to use the back door to get dollars.
Timi Ajiboye, who runs Lagos exchange BuyCoins, said its monthly cryptocurrency volumes jumped over three-fold to $21 million in June after the naira was devalued in March.
Exchanges across Africa spoke of a similar boom.
Yellow Card, which operates in five countries, said its monthly crypto volumes had jumped five-fold in 2020 to $25 million in August. A big driver was workers using bitcoin for remittances, it added.
Luno said the combined monthly bitcoin trading volumes of all market participants in South Africa and Nigeria had jumped by half this year to more than $536 million in August.
For some people working abroad, in other continents or other African countries, sending money home via bitcoin can be quicker and cheaper.
A Nigerian worker in London sending 100 pounds ($132) in cash to Lagos via a big traditional money-transfer firm, for example, would pay fees of around 5 percent. Costs are lower when sending larger amounts or using a debit card, but the exchange rates on offer are typically several percentage points less favorable than the market rate.
Bitcoin fees vary depending on the exchange or broker, but would typically total about 2-2.5 percent for sending 100 pounds.
However both exchanges and over-the-counter (OTC) brokers carry risks, from hacks to scams.
And bitcoin, while handy for transfers, isnt much use on the ground - shops and landlords rarely accept it, for instance. This means friends or family sent funds by workers must convert it back to traditional currency, often via a broker at their end, introducing additional risk.
Yet the bitcoin users interviewed said many OTC brokers, who rely on word-of-mouth reviews, functioned reliably in an increasingly competitive market and were loath to imperil the reputations they needed to stay in business.
And for a growing number of people, the potential rewards outweigh the pitfalls.
People are very adoptive of any technology that will make their life easier, said Frankline Kihiu, a crypto broker in Kenyas capital, Nairobi.
In most African countries, there are lots of government restrictions that bitcoin takes away.
How bitcoin met the real world in Africa - NBC News
- Bitcoin now has a 7% chance of beating $20K highs in the next 2 months - Cointelegraph - October 23rd, 2020
- For the first time since 2018 Bitcoin balances on exchanges fell below 2.5M - Cointelegraph - October 23rd, 2020
- Bitcoin top signal from 2017 reappears, but heres why it may not matter this time - Cointelegraph - October 23rd, 2020
- First Mover: PayPal Rushes In and Bitcoin Breaches $12K, While USDC Gains on Tether - CoinDesk - CoinDesk - October 23rd, 2020
- Macro Investor Dan Tapiero on Crypto Adoption: Emerging Economies Ahead of Developed States | News - Bitcoin News - October 23rd, 2020
- Ban All Ransomware Payments, in Bitcoin or Otherwise - CoinDesk - CoinDesk - October 23rd, 2020
- Hotel Bitcoin ATMs on the Rise With Addition of Swiss Hotel Dolder Grand | News - Bitcoin News - October 23rd, 2020
- World Gold Council Survey Shows Cryptocurrency Investment the 5th Most Popular in Russia - Bitcoin News - October 23rd, 2020
- Ethereum Q3 Volume Dwarfs Bitcoin's, Fueled by DeFi - Decrypt - October 23rd, 2020
- Crypto fans rejoice: Bitcoin rallies to the brink of $12,000 - Aljazeera.com - October 23rd, 2020
- 187,000 BTC Drained: Over $2 Billion in Bitcoin Leave the Top Exchanges Since June | Exchanges - Bitcoin News - October 19th, 2020
- A Former Goldman Sachs Hedge Fund Chief Has Predicted Bitcoin Will Surge To $1 MillionHeres Why - Forbes - October 19th, 2020
- Bitcoin minings future is green, and Russia has the best chance - Cointelegraph - October 19th, 2020
- Has Bitcoin Finally Met Its Match? - Forbes - October 19th, 2020
- Bitcoin rips and cruise ships: Bad crypto news of the week - Cointelegraph - October 19th, 2020
- Where Does Bitcoin Fit in the Global Reserve Currency Game? - CoinDesk - Coindesk - October 19th, 2020
- Enormous wall of money will send Bitcoin to $1M in 2025 Raoul Pal - Cointelegraph - October 19th, 2020
- Bitcoin's Intrinsic Value: Crypto Community Responds to Bank of England Governor | News - Bitcoin News - October 19th, 2020
- Bitcoin Price Ready For a New Pop Will It Do It Today? - InvestingCube - October 19th, 2020
- 'Enormous Wall of Money' Coming Into Bitcoin, Price to Reach $1 Million in 5 Years, Says Raoul Pal - Bitcoin News - October 19th, 2020
- Bitcoin and Ripple's XRP - Weekly Technical Analysis October 19th, 2020 - FX Empire - October 19th, 2020
- Blockchain Bites: Bitcoin on Ethereum The Whos, Whats and Whys - CoinDesk - CoinDesk - October 19th, 2020
- First Mover: Privacy Is Litecoin's Ace in the Hole as JPMorgan Touts Bitcoin - CoinDesk - CoinDesk - October 19th, 2020
- Hathor Merge Mining Pool Commands 33% of the Bitcoin Cash Hashrate - Bitcoin News - October 19th, 2020
- Cashfusion Use Increased by 328%, $200M in BCH Fused and Close to 20,000 Fusions | Privacy - Bitcoin News - October 19th, 2020
- The Silk Road Balance Sheet Discrepancy: Bitcoin Worth $4.8 Billion Still Missing | Featured - Bitcoin News - October 19th, 2020
- Bitcoins Taproot is ready to go, but it's unlikely to be included in the next release - Cointelegraph - October 19th, 2020
- How will the US presidential election affect the price of Bitcoin? - Cointelegraph - October 11th, 2020
- $12K Bitcoin price back on the table after BTC rallies above $11.4K - Cointelegraph - October 11th, 2020
- Coinbase's 'Mission' Violates the Spirit of Bitcoin - CoinDesk - CoinDesk - October 11th, 2020
- Bitcoin: the UK and US are clamping down on crypto trading here's why it's not yet a big deal - The Conversation UK - October 11th, 2020
- Lyn Alden: Bitcoin Correlations Depend on What Phase It Is In - CoinDesk - CoinDesk - October 11th, 2020
- UK Bans Sale of Crypto Derivatives to Retail Investors from January 2021 | News - Bitcoin News - October 11th, 2020
- Yearn Finance Token Value Slides 67%, While Locked Value Loses Over $300M | Altcoins - Bitcoin News - October 11th, 2020
- Bitcoin price holds $10.5K but a $30M sell wall looms overhead - Cointelegraph - October 6th, 2020
- Bitcoin To Hit $100,000 in Five Years as Demand and Adoption Increase - Report | Markets and Prices - Bitcoin News - October 6th, 2020
- Trump, price dots and COVID-19: 5 things to watch in Bitcoin this week - Cointelegraph - October 6th, 2020
- $8M Worth of 'Sleeping' Bitcoin Rewards from 2010 Moved the Day Before 'Black Thursday' - Bitcoin News - October 6th, 2020
- Interest in Bitcoin Soars in Egypt Amid Economic Crisis and Unemployment | News - Bitcoin News - October 6th, 2020
- A Major Tesla Investor Has Predicted Bitcoin Will Be Worth More Than $1 Trillion In Under 10 Years - Forbes - October 6th, 2020
- Crypto for Congress: Bitcoin Sent to All Congress Members' Campaigns | News - Bitcoin News - October 6th, 2020
- Stacking Satoshis: Leveraging Defi Applications to Earn More Bitcoin | Featured - Bitcoin News - October 6th, 2020
- FCA bans the public from Bitcoin and other cryptocurrency derivatives - Evening Standard - October 6th, 2020
- Pro-Crypto PAC Giving $50 in Bitcoin to the Campaign of Each Member of Congress - CoinDesk - CoinDesk - October 6th, 2020
- Ethereum Transaction Fees Fall 82%, as Defi Hype Eases | Altcoins Bitcoin News - Bitcoin News - October 6th, 2020
- Crypto for Congress sends $50 in Bitcoin to all US Congress members - Crypto News Flash - October 6th, 2020
- Abkhazia Lifts Two-Year Ban on Bitcoin Mining, Moves to Regulate the Sector | Regulation - Bitcoin News - October 6th, 2020
- Why reduced Bitcoin futures volume may signal the start of a new bull trend - Cointelegraph - October 2nd, 2020
- Market Wrap: Bitcoin Rebounds to $10.5K; Stablecoin Market Cap Goes Parabolic - CoinDesk - CoinDesk - October 2nd, 2020
- Spike in new participants buying Bitcoin is obviously bullish Analyst - Cointelegraph - October 2nd, 2020
- Romania set to auction Bitcoin and Ether confiscated in criminal case - Cointelegraph - October 2nd, 2020
- Bitcoin Balances on Exchanges at 2-Year Low and That May Be a Bullish Sign - CoinDesk - CoinDesk - October 2nd, 2020
- Venezuela To Start Using Cryptocurrency in Global Trade in Efforts To Fend off US Sanctions | Emerging Markets - Bitcoin News - October 2nd, 2020
- Bitcoin Posts a 66-Day Consecutive Streak Above the $10K Price Range | Markets and Prices - Bitcoin News - October 2nd, 2020
- Aurus Disrupts the Gold Industry Today Its Ecosystem Lists at a Value of $75m | Sponsored - Bitcoin News - October 2nd, 2020
- Satoshi Nakamoto's Peer-to-Peer vision for Bitcoin - Korea IT Times - October 2nd, 2020
- Crypto Bets on the US Election Show Joe Biden Winning the Presidency by 60% - Bitcoin News - October 2nd, 2020
- At $10,600, Bitcoin price is on track for its second-best quarter ever - Cointelegraph - September 30th, 2020
- Devere Group CEO Predicts Bitcoin Can Replace Gold as Top Safe-Haven Within a Generation | Finance - Bitcoin News - September 30th, 2020
- Ex-CEO of Bitcoin.com, a Leading Proponent of Bitcoin Cash (BCH), Joins Nodle's Board to Help Develop the Nodle Cash Ecosystem - GlobeNewswire - September 30th, 2020
- Trump, tax and hacks: 5 things shaping Bitcoin price action this week - Cointelegraph - September 30th, 2020
- One of Hal Finney's lost contributions to Bitcoin Core to be 'resurrected' - Cointelegraph - September 30th, 2020
- French police arrest terror financing ring that used Bitcoin coupons - Cointelegraph - September 30th, 2020
- What The IRS's Interest In Your Bitcoins Says About The Future Of Cryptocurrencies - Forbes - September 30th, 2020
- New DeFi Project NEW KANGEN (NEWG) Presale Will Start on 2nd October 2020 | Press release - Bitcoin News - September 30th, 2020
- Token Projects to Recover $130M from the Kucoin Hack, Devs Condemned for Centralization - Bitcoin News - September 30th, 2020
- A Record $1.2 Billion in Bitcoin Has Now Moved to Ethereum - Decrypt - September 30th, 2020
- USDT Trading Arrives on Bitcoin Global - Yahoo Finance - September 30th, 2020
- The Bitcoin Family: Still on the RoadAfter Three Years! - Decrypt - September 30th, 2020
- What REALLY Moves Bitcoin? - Elliott Wave International - September 30th, 2020
- Listen to Calvin Ayre talk about how he found opportunity in Bitcoin - CalvinAyre.com - September 30th, 2020
- Would Bitcoin suffer if the lead maintainers were kidnapped by aliens? - Cointelegraph - September 12th, 2020
- New DeFi Project Xfinance(XFI) ILO Presale Will Start Today | Press release Bitcoin News - Bitcoin News - September 12th, 2020
- Working in the Cryptocurrency Industry as a Woman | Op-Ed Bitcoin News - Bitcoin News - September 12th, 2020
- On-chain data signals increasing Bitcoin activity But theres a catch - Cointelegraph - September 10th, 2020
- Bitcoin and cryptocurrency are no hedge for inflation - Cointelegraph - September 10th, 2020
- TOP 5 Popular Cryptocurrencies Other than Bitcoin - Analytics Insight - September 10th, 2020
- 'High' Severity Bug in Bitcoin Software Revealed 2 Years After Fix - CoinDesk - Coindesk - September 10th, 2020
- Number of Bitcoin Addresses Holding at Least 1 BTC Hits New ATH - Ethereum World News - September 10th, 2020
- The adjusted on-chain volume of Bitcoin and Ethereum hit a 30-month high in August - Yahoo Finance - September 10th, 2020