There has been talk of a crypto currency, Bitcoin and the way in which it is supposed to revolutionise the “money” concept.
Glorious as it is predicted to be, there has been very little explanation in understandable terms of what it really is. Those who appreciate how it operates seem to struggle with conveying a simple easy to sell message to the prospective users.
Its common definition is that it is a decentralised virtual currency used to make online transactions. It is not tied to any central governance system and therefore is said to be inflation proof, this means that even in the event of a global recession its value remains static.
People acquire this Bitcoin through three methods, trading hard cash for it, accepting them as payment after selling goods and products as well as Bitcoin mining. Bitcoin mining is a complicated process where a user solves complex transactional riddles and claim ownership of the blocks that were involved in those transactions.
In simpler terms, it is almost like cracking a numerical Runik’s cube for a reward in Bitcoin. From a distance it seems like a solution that may come in handy in a country grappling to solve the current cash crisis.
Why are people sleeping in queues waiting for money when they can quickly move to an alternative currency that is seemingly full-proof? The answer is, there is no one who has managed to explain to the ordinary person, how they will be able to buy bread or pay their church tithe using this Bitcoin. Owing to the morse-code like communication that surrounds its use, the Bitcoin is less likely to grow in popularity in a country that is yet to fully embrace plastic money.
Retailers, especially those whose operations do not stem beyond one or two outlets still insist on cash, the energy they will direct towards rejecting a currency that exists only on the internet is imaginable. Another complex area the Bitcoin will have to navigate is the booming informal sector in Zimbabwe.
It is highly unlikely the vendors of this Bitcoin get to gain the trust of the fruit vendor at Mbare Musika or the car charger peddler at corner Samora Machel Avenue and Rotten Row Street. Some of the values vendors trade are even too low for mobile money and swipe, there may also not be compatible with an online payment system.
The Bitcoin seems to be a store of high value far from the $0,10 transactions that are made in the informal sector at times.
Among the traditional elements of money, acceptability ranks high and if there is likelihood that some sections of the country’s economy is poised to be apathetic, the Bitcoin’s success may be limited.
Technology experts have raised the concerns that the number of Zimbabweans who use the internet barely go beyond Whatsapp. According to the Portraz Fourth Quarter Report in 2015, Whatsapp constitutes 34 percent of the mobile data use in Zimbabwe. This means that a sizeable chunk of Zimbabweans are likely not to get to the point where they will access the Bitcoin and consider using it.
Should the local vendors decide to tap into this market? Rigorous marketing would need to be applied. Their efforts will have to cover awareness of the currency, acceptance as well as loyalty.
It is not only vendors who need to buy into the idea for it to become a success. Central systems need to as well. For as long as strategic policies like the national monetary policy are still delivered in accordance to values defined in traditional currencies, cryptocurrencies will be hard to popularise.
Understandably so, it would be questionable for any government to lead its ideas using a currency that is based on a few digital codes and has no clear regulatory system. The way it is volatile speaks to its unsustainability in an economy where people prefer storing their value in the money itself not assets.
It is impossible to make serious plans on a currency whose value is difficult to predict, based on that element, Bitcoin is difficult to apply in decent business decisions.
Like any other electronic intervention that has emerged over the years, the prospects of hacking will still play against its trust. Without trust a currency cannot take off, this applies to conventional money as well as electronic currencies.
When people tie their earnings to a currency they need to know that is safe from unintended interference, this is something the Bitcoin is yet to offer at the moment. Perhaps the idea may be bettered with time but as of now assuming that the Bitcoin currency will be a hit in the Zimbabwean market is stretching optimism.