Of the top 30 countries in Cambridge professor Garrick Hileman’s 2015 Bitcoin Market Potential Index, which measured propensity for bitcoin uptake, 14 were in Africa.
And tech pioneers in the continent see much to be excited about, including Luno, founded in South Africa in 2013, which has plans to become one of the leading cryptocurrency traders in the world. Chief executive and founder Marcus Swanepoel has a goal that would leave many bigger companies in the shade: 1 billion customers by 2025.
“There are very few industries in the world for which you could say that is a reachable goal, but because bitcoin is so open and global, it is really an achievable goal. We’re excited to pursue it,” he told CNN Tech last week.
Given the complex history of financial crises, political turmoil and informal economies in countries such as Nigeria, Angola and Zimbabwe, Prof Hileman's results are of little surprise.
In numerous African cities – particularly financial hubs like Lagos in Nigeria and Nairobi in Kenya – a growing number of investors are turning to bitcoin, which has been trading at a premium on the continent. Relatively unscathed by global market jitters, and with fiat currencies as erratic as ever, hunger for African bitcoin shows no sign of abating.
Recent demand growth in Nigeria is second only to China, with peer-to-peer transactions rising nearly 1,500 per cent in 2017.
But the country’s government has expressed concern.
“Cryptocurrency or bitcoin is like a gamble, and there is a need for everybody to be very careful,” central bank governor Godwin Emefiele said in the capital Abuja last month, according to Bloomberg. “We cannot as a central bank give support to situations where people risk savings to gamble.”
But digital currency is becoming ever more popular, regardless of warnings, even in the small ads.
South of Johannesburg, South Africa, in the district of Sedibeng, a miniature Pekingese puppy is listed on Gumtree, for sale in bitcoin.
Other items listed on the site, from motorbikes to electric guitars to a used $9 bodyboard, can all be bought in bitcoin.
Red and Yellow business school, which has campuses in Cape Town and Johannesburg, attracted headlines in January when it began accepting fees in bitcoin. "We are a future-focused institution, and cryptocurrencies, bitcoin in particular, have an important role to play in the world ahead," says Rob Stokes, its chairman.
Meanwhile, global experts in bitcoin and blockchain – the digital ledger that underpins cryptocurrencies – participated in glitzy conferences last year in Lagos, Nairobi, Accra and Johannesburg.
In Uganda, dozens of crypto dealer wannabes attended trader Martin Serugga’s digital currency classes in Kampala.
"Since 2008, I have held classes in forex trading," he says. "Bitcoin has been added as a tradable financial instrument on many forex trading platforms. That is why we added it to our classes."
Bitcoin is particularly successful in unstable markets like those in Africa, where it is seen as a refuge from the political and economic turmoil that afflicts most economies. Since its price is based on market forces, it cuts out potentially corrupt middlemen and impulsive central bankers. Often, economic shock can spur a surge in demand.
In March 2017, then South African finance minister Pravin Gordhan was sacked in a controversial reshuffle.
In November, the country’s debt was downgraded to junk status. On both occasions, interest in South African bitcoin spiked.
Cryptocurrencies also allow the investor to sidestep financial obstacles. By some estimates, 65 per cent of sub-Saharan Africans are unbanked. In locations with embryonic financial services industries, bitcoin offers a vital means of accessing and exchanging capital.
Exchanges such as Nigeria’s NairaEx allow Africans to use cryptocurrencies to send money across borders. Bitcoin “enticed many looking to send money to loved ones across the globe”, says David Ajala, the NairaEx chief executive.
"The remittance industry remains the biggest in Africa, worth in excess of $21 billion annually," he says. But perhaps the strongest driver towards African bitcoin is the volatility of local fiat currencies.
Over the past couple of years, inflation and insecurity has gripped the Nigerian naira, causing businesses and individuals to adopt the US dollar and depleting foreign currency reserves.
As a result, many have gambled on bitcoin, hoping it would retain its value. This trend towards financial innovation in Africa is not new and the uptick in bitcoin investment is the latest example of young African investors using technology to bypass poor infrastructure.
In 2015, some $28bn flowed through Kenyan mobile-money service M-Pesa, equivalent to 44 per cent of Kenyan GDP.
"Africa loves technology," says Neil Blazevic, founder of Africa Digital Assets. "There is frustration as people perceive their governments as old-fashioned and slow moving, and so citizens fill the gap. Cryptocurrency is money in the age of social media."
But as demand for African bitcoin has increased, so has its price. South African coins traded at 11,086 rand (Dh3,489) in early 2017. A year later, each coin was valued at 212,000 rand.
Bitcoin in Zimbabwe, perhaps Africa’s most tumultuous economy, traded at a 40 per cent premium at times in 2017. Coins have sold in Nigeria and Angola with a 100 per cent mark-up.
Demand aside, inadequate power generation also increases prices.
Electricity blackouts are commonplace in major African cities like Lagos, where wealthy households have private generators. But bitcoin mining – the process by which transactions are verified and new coins are released – requires a strong and steady power supply. As a result of less-than-reliable power, transaction confirmation times can be excessive, and fewer coins are moved onto African exchanges than elsewhere.
Despite growing enthusiasm in Africa, investors there as in other regions are just as exposed to risk, such as when bitcoin crashed globally this year. After hitting a record high of $19,850 last December, prices have fallen as low as $6,000 in 2018 before regaining ground, due in part to regulatory fears. South Korea recently banned anonymous bitcoin trading, for instance. Suspicious of the link between bitcoin and criminality, the UK, France and Germany are itching to regulate.
Nevertheless, prices have rebounded recently. The global concerns have made their way onto the continent, but price fluctuations have not dampened enthusiasm. “Trading activity is showing zero impact related to the price crash,” said Phuong Nguyen, the vice president at Remitano, a continent-wide bitcoin exchange.
“For the majority of investors, this has been something they have seen before. The price crash is simply a chance for them to buy more bitcoin at a ‘discount’.”
The size of African transactions also helps mitigate losses. "As small amounts being transacted make up the bulk of crypto transactions in Africa, the price fluctuations haven't had a huge impact on the local market," says Mr Ajala.
Of course, for some budding African investors, bitcoin is their first exposure to volatile market assets, and some fail to appreciate its dangers. “Limited education reflects on the poor decisions some [investors] have made, including taking out large loans and some even mortgaging their houses to invest bigger sums into crypto,” says Mr Ajala.
Future potential crypto clouds include red tape in Africa, where governments often over-regulate.
The Nigeria Deposit Insurance Corporation, a Nigerian regulator, has launched a commission to investigate digital currencies.
Egypt’s Grand Mufti Shawki Allam issued a fatwa in January banning bitcoin trading, which he likened to gambling. Central banks across the continent are increasingly mistrustful.
Nevertheless, with prices stabilising, investors undeterred and bigger players entering the market, analysts and investors remain optimistic.
“With many institutional investors starting to add crypto currencies to their investment portfolios, 2018 will be a bullish market for bitcoin,” says Mr Serugga.