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Thanks to bitcoin, it's about to become a lot easier to move money in Africa. M-Pesa, a successful mobile money platform in Sub-Saharan Africa, is embracing bitcoin. The service will give rise to transactions with negligible fees (~$0.04), and could dramatically slash revenues of existing money transfer services like Moneygram, Western-Union and Paypal. That is, if the famed
untraceable digital currency catches on.
Kipochi, the bitcoin wallet service is now being integrated into M-Pesa, which more than one third of Kenyans have already signed up for, as well as five million Tanzanians. A team of 8,300 brand agents is also currently canvassing East India, targeting 'unbanked' people. (Update: Just to clarify, that one third of Kenyans now has access to a bitcoin wallet service doesn't mean that all of those people use bitcoins. We'll see how usage growth pans out after Kipochi is fully integrated.)
Like many bitcoin businesses that advocate the digital currency's mainstream proliferation, Kipochi boasts these tenets on its front page:
- Free of inflation
- Low cost
The wallet service allows government-ID-carrying users to swap funds by using their phone numbers as account numbers. Bitcoins land on Kipochi's server by way of a 34-character bitcoin address, which acts as an alias in front of the customer's account. Linked with M-Pesa, Kipochi could quickly become the cheapest way for expats to send their money home.
That Bitcoin is an infamous, decentralized, untraceable currency that can facilitate black markets, illicit transactions and money-laundering is surely what caught media and political attention at first. But after bitcoin's crash this spring, and after the NYTimes alerted its baby boomers, the digital currency started to stabilize in both terms of price and discourse. Bitcoin evangelists came out of the woodwork defending against the stigmas, pontificating bitcoin's mainstream viability. Kipochi and M-Pesa's handshake meets such aspirations:
Kipochi, dead set on its dream of a bitcoin future is part of an army: Good-willed ambassadors, determined to kill off bitcoin's aura of comic book villainy. Sure, the crypto-currency has brought tens of millions of dollars into the hands of drug dealers, and has yet to largely impact any global economic crises. But therein lies the goal of the bitcoin evangelists: Legitimizing bitcoin and getting normal people to use it for normal things.
"Who are the first types of people to use any kind of new technology? The ones that need to use it the most, right?" Charlie Shrem of Bitinstant ranted in a conference at the Wythe Hotel last month, seated between co-panelists Andrew Chang and Cameron Winklevoss.
"Bitcoin is not anonymous, it's private. It's the same as that cash transaction you do at the store," Shrem said. "We need to collect some basic information about you...and we'll start you off with a smaller account. The more information you give us, the more you trust us, we'll raise your limits and give you better discounts. You trust us, we trust you. You get the point."