Bitcoin in Kenya

Cryptocurrencies are digital assets designed to function as virtual money. These cryptocurrencies can be used as a means of exchange just like regular money, or as a store of value in the same way as gold. Cryptocurrencies use cryptography to secure their transactions, control the creation of additional units and verify the transfer of assets.

The technical details of cryptocurrencies are very difficult to understand for most people, and we will not insist on this. Here we are going to present the main cryptocurrencies and how they can be used for investments or payments.

The Bitcoin

Created in 2009, Bitcoin is the king of cryptocurrencies. Being the first cryptocurrency, Bitcoin is responsible for the development of this technology (known as "blockchain") and remains the most important of all. All other cryptocurrencies are known as "altcoins" or "alternative currencies", because Bitcoin developed the original technology behind them.

What is very important to understand related to Bitcoin is its supply limit. At the time of writing this page, there are almost 17 million Bitcoins in existence, and there are several mining companies that are mining for new Bitcoins. The problem with Bitcoin mining is that every time new Bitcoins are found, the difficulty of mining increases. For this reason the first Bitcoins were mined very easy and very fast, but now, in order to mine Bitcoins you need very specialized computers, and the necessary energy consumption is quite high. The supply of new Bitcoins is decreasing every month, and the currency is created in such a way that there is a limit of Bitcoins that can be mined.

The upper limit of all the Bitcoins that may exist is 21 million. This means that there will never be more than 21 million Bitcoins. You also have to understand that Bitcoins can be lost, if the owners lose the access keys to their Bitcoins. In these cases, the lost Bitcoins will leave the circulation forever, and the total amount of Bitcoins in circulation will decrease from one point, instead of growing.

Taking into account the limited supply, and the loss of existing Bitcoins, Bitcoin is a currency created for perpetual deflation in the future. This is the opposite of the money issued by governments, which always grow in volume and lose in value. All Kenyans know that governments have no limits in the creation of new money, and for this reason the money already existing will lose in value every year. Inflation is something that affects Kenyans for a long time, and Bitcoin is a very interesting option for those who are tired of seeing their money lose value every year. We all know what happened to the Zimbabwe dollar. This can never happen to Bitcoin.

Bitcoin is a decentralized currency, which means that it is not issued by any government, and circulates freely over the internet. Bitcoins can be transacted in less than one hour between people living in any country in the world, without limits of value, that is to say that someone in Kenya can send Bitcoins with a value of one million dollars to someone in South Korea in just a few minutes, without any limitations. This makes Bitcoin the best way to send money from one country to another.

The lack of government control, the limited supply and the extraordinary potential it has for fast high-value international transactions makes Bitcoin an asset that everyone wants and very few have. When there is high demand and little supply, the price goes up. And it goes up, and up, and up... This has happened with the price of Bitcoin since its creation until today.

Here is a chart with the price of Bitcoin from its creation to the present:

And here is a graph updated in real time with the evolution of Bitcoin in the last six months, courtesy of Bitcoin.com:

As you can see, Bitcoin's trajectory is up, and it went from only a few cents to more than ten thousand US dollars. This is the highest rise in the history of financial assets. The first people who mined or bought Bitcoin became millionaires, but those who bought later also won a lot. At the beginning of 2017, Bitcoin was about nine hundred dollars, and in a single year it grew almost 20 times, or 2,000%. If you had invested a thousand dollars in Bitcoins, in just one year they would have turned into twenty thousand.

This is what happens when nobody can create additional coins and there are still billions of people who do not have Bitcoins. Every time new people find out about the existence of Bitcoin and want to buy, there is new demand, but at the same time Bitcoin's supply grows very slow until the moment it goes down instead of growing. Under these conditions, the price continues to rise.

The Litecoin

The Litecoin was created in 2011 and is a cryptocurrency very similar to Bitcoin. In the world of cryptocurrencies, Litecoin is considered "silver" and Bitcoin is "gold". The value of Litecoin had a trajectory similar to Bitcoin, that is to say it has grown continuously since its appearance, but it is still much cheaper and can be a good investment for the future.

The transaction costs of Litecoin are lower and the speed of transfers is higher. The supply limit is 84 million Litecoins, meaning that there will be four times more Litecoins than Bitcoins.

Many people believe that Bitcoin will work more as a store of value and that Litecoin will be more useful for payments and transfers.

The Ethereum

Another very important cryptocurrency is Ethereum. Launched in 2015, Ethereum grew tremendously in value because it is a cryptocurrency with special features that facilitate "smart contracts". The proponents of Ethereum think that the cryptocurrency will be very useful with the development of applications and services based exclusively on the use of Ethereum, thanks to intelligent contracts.

Other Cryptocurrencies

There are already thousands of other cryptocurrencies. In addition to the three mentioned above, the best known cryptocurrencies are Ripple, Dash, IOTA, Monero and Bitcoin Cash (not to be confused with Bitcoin).

How to buy Bitcoin in Kenya?

This is a very difficult question, because there are several sites where you can buy Bitcoins, but sometimes the process is not very easy. Nobody is going to sell you Bitcoins for a payment with a bank credit card, because the transfers in Bitcoin are definitive and irreversible, while the payments with bank cards can be canceled. The only way to buy Bitcoins is by paying with bank transfers or in cash. One of the most used methods to buy Bitcoins is to look for people who sell in your region on the Localbitcoins site and buy directly from them.

Fortunately, there are other easier methods to take advantage of the valuation of Bitcoin and the other cryptocurrencies. You no longer have to buy the Bitcoins and keep them in your wallet, because you can register with a specialized broker and buy contracts for difference that follow the Bitcoin price.

In this way you will have access to the Bitcoin market very quickly and with the convenience of using very convenient payment methods, such as your bank card or virtual wallets (Skrill, Neteller or PayPal). You can also use leverage to increase your potential earnings, just like in the forex market.

Here are the best brokers where you can trade cryptocurrencies like Bitcoin and Litecoin from Kenya:

Risk warning: Trading Bitcoin with contracts for difference or binary options involves risk and may not be suitable for everyone. By trading cryptocurrencies it is possible to lose your entire investment. Do not trade with money you cannot afford to lose.