Stephen Aluko lived “hand in mouth” for years in Nigeria, home to a large but difficult economy in Africa with a high unemployment rate. Working odd jobs, from cyber cafes to soft media to videography, he was constantly wondering if he could pay for his next meal.
He was unemployed before hearing about Bitcoin in 2017. At this point, his shoes barely held together.
When Aluko decided to trade Bitcoin – buying and selling the cryptocurrency for a profit – that all changed. At first he was concerned. He didn’t know what he was doing. But the side business worked so well that he’s been trading the largest cryptocurrency full-time for three years now.
“My finances weren’t in good shape when I started trading. So you could say Bitcoin trading saved me,” Aluko told CoinDesk. “I’ve made enough money trading Bitcoin to be able to get married and live comfortably without debt.”
This is an example of someone using bitcoin in unexpected ways to improve their life. And there are many other examples around the world, from Argentina to Iran.
“The money I made trading Bitcoin has enabled me to invest in other businesses, be financially independent, and live debt free. I think I made more money with Bitcoin than if I had chosen a different career path, ”he said.
The recent Bitcoin bull run had nothing to do with Aluko’s success. CoinDesk spoke to Aluko about the spike in Bitcoin trading in Africa in August 2020 before Bitcoin price topped its all-time high and started a bull run.
Aluko knows many other dealers who have found themselves in a similar position.
“It’s not unique to me,” he said. “I know a lot of people in Nigeria [who] Trade Bitcoin to make a living. I also taught people how to trade Bitcoin because I know how trading Bitcoin changed my life and I want to help people. “
He argues that one factor driving so many people to trade is the high unemployment rate in the region. The situation has only deteriorated since Aluko was unemployed. In Nigeria, for example, the unemployment rate has tripled in the past five years to 27%.
“Let’s just say the numbers are not encouraging. Chances are I would have gotten a decent job if I’d worked hard and applied to companies a lot more. But when I think about what I’ve achieved in three years trading Bitcoin, I’m sure I made the right choice, ”said Aluko.
Other Africans have made the same career decision, trying bitcoin and cryptocurrency trading. African Exchanges Quidax CEO and Co-Founder Buchi Okoro said it was one of the main reasons people use the exchanges.
“From our conversations with our customers, it appears that many people use crypto to make a living trading as a full-time job,” Okoro told CoinDesk.
Bitcoin trading vs. speculation
Then there is speculation, which is a bit different from trading. Speculation investing in a risky asset like cryptocurrency with the hope that the price will go up and enrich the investor.
“Although Bitcoin is used for speculation around the world, it is different in Africa,” KenyaCoin, a pseudonymous Bitcoin enthusiast from Kenya, told CoinDesk, pointing out unemployment rates, as Okoro had done.
“There are a large number of college graduates who simply cannot find work in the country. Those with the funds, especially those with a degree in economics, finance or engineering, take up speculation in the crypto room either to try to supplement the income they have or as a substitute for “employment,” he added.
KenyaCoin suspects that speculation is “the main bitcoin and crypto activity on the continent”.
Bitcoin and crypto fraud risk
The rise of bitcoin and crypto in Africa wasn’t necessarily just a rainbow, however.
This trend also has a dark side. Some people have been hurt by trade and speculation. Much like in the rest of the world, when Africans explored cryptocurrency as a route to better income, they lost money or fell for a number of scams.
For example, many Nigerians first heard about MMM from Bitcoin, a Russian Ponzi program that promised investors a 100% return. When MMM failed to keep these high promises, the participants lost their money.
KenyaCoin pointed to notorious cryptocurrency scams like BitClub Network and Onecoin as other examples of “bad” projects that have flourished in the region, as well as lesser known scams like Nurucoin and Crowd1.
“Fraud is often targeted against victims in developing countries because financial and investment regulations are not always sound and / or enforcement often lags,” he said.
Bitcoin and other cryptocurrencies are still new, so people in Africa – as in the rest of the world – can still get an overview of which cryptocurrency projects are actually useful and not harmful to them.