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Bitcoin to ZAR

South Africa, a country home for some of the most innovative startups in the world, is set for the next fintech and blockchain revolution.

According to Disrupt Africa, a leading startup news platform, most of the innovations in the year 2017 will be focused on mobile payments, digital banking, Bitcoin, SME financing, data analytics, real estate and automation solutions.

Interestingly, all these areas present an opportunity for the implementation of blockchain technology.

Blockchain and Bitcoin in South Africa

[TOC] “Blockchain could be the most significant social and political innovation to impact Africa in 100 years.” – Arian Lewis, Head of Open Innovation at Barclays.

It’s no secret, in South Africa and Nigeria, banks are wanting to be phone companies and in Kenya, one phone company is already the bank – it is called MPesa.

African banks have been a bit late to the fintech party, but since mobile phones have made such a huge impact on the financial industry in the African countries, banks are looking at this continent to test out new technologies like Bitcoin and Blockchain.

To give you some perspective, MPesa, a peer-to-peer mobile money platform, owned by Kenya’s Safaricom and heavily funded by Silicon Valley giants has forever changed the way people do money transactions in East Africa.

They provide merchants in Kenya to accept payments through mobile phones.

This has lead three-quarters of Kenya’s adult population to register as MPesa users and nearly one third of the country’s GDP is now transacted through MPesa. Increasing penetration of smartphones in all of Africa is only going to further benefit MPesa and the likes in future.

Interestingly, MPesa was founded by three Americans, who came up with the idea on a whiteboard in a Seattle basement, before bringing it to Kenya.

African technology companies absolutely do not want this to happen again.

“You have a headwind from Silicon Valley and Europe blowing into Africa now around the disruption in fintech. The banks are really nervous and they want to get ahead of this,” says Mbwana Alliy, managing partner at African technology venture firm, the Savannah Fund.

Peer-to-peer payment processors like MPesa and digital currencies such as Bitcoin are tremendously helping people transact money in Africa. This is a trend that big banks like Barclays are not only starting to acknowledge, but are also taking part in it.

“People in Africa do banking on their mobile phones, but our talent base is all built on bricks and mortar banking” says Arian Lewis.

“So we’re thinking, are we actually a tech company? To make that shift, you have to approach talent that sits at the front end of that change curve.” he added.

Barclays has been helping several blockchain startups across the globe. One of them is based in Cape Town called Consent, a startup that went through the bank’s pilot accelerator in Cape Town in late 2015. The platform uses digital ledger protocol to record medical records that are often mismanaged or lost in the region.

This disruptive technology is scaring the banks from losing the grip. Banks like Barclays Africa and others are trying to adopt these innovations with the reputations of trust they believe legacy institutions bring.

Many believe if digital currencies are adopted by more African nations, it could significantly reduce corruption from government. Bitcoin comes with a lot of transparency and gives control to the citizens – something this continent desperately needs.

Vinny Lingham, a South African serial entrepreneur and founder of blockchain startup, Civic, believes Africa will be disrupted faster than any continent in the world. He feels that a trustless method will remove the need for traditional banks.

You don’t need third parties like banks operating as trust brokers anymore. It’s all built into the code. The way mobile leapfrogged fixed lines communications in Africa, blockchain will leapfrog a lot of the financial infrastructure that exists today.” he adds.

Notably, Lingham recently made an investment in augmented reality game Augmentors on the popular TV series Shark Tank (South African version).

I loved the way he made his offer in Bitcoins. He told the Augmentors founders:

The problem you’re trying to solve around creating rarity… can better be solved by using the bitcoin blockchain. So, my offer will be 500,000 ZAR, or roughly 59 bitcoins, for 20% of your business.

To add to this, just a couple of weeks ago Augmentors successfully raised over 250 BTC within the first 6 hours of the ICO.

Corruption in African countries

Corruption is nothing new to Africa. Governments are known for internal theft of funds, rigging elections, mismanagement of foreign aid and what not.

Blockchain has the potential to make us rethink how we elect government, buy houses, give money, invest, and anything else that requires a paper for documentation.

Researchers have found that Bitcoin has now moved beyond its initial purposes and that the digital currency is increasingly serving other legal markets.

Ironically, while Bitcoins are usually associated with being anonymous, the publicly available blockchain, which keeps records of all transactions, means that payments are transparent.

This transparency is enough for providing loans and aid to anyone with an internet connection. The publically available blockchain will allow you to trace the money back to its destination.

Here’s how:

If the government goes ahead with the blockchain technology, all the transactions will have to go through a public approval process. It is part of the six step process of a blockchain transaction.

Since blockchain transactions need to do this, the public has power whether a transaction is valid. The government must have sufficient funding to send the resources. Later, if approved, it will be visible on the public ledger.

People would know immediately when an action was taken in the government. They will also be able to tell if the transfer was of actual government business or it is of corruption.

This would make impossible for governments to keep corruption a secret, as public ledgers can be analyzed from people all around the world at any time.

Magical, right?

It does not stop there. Blockchain has the ability to curb most of the issues tied to money laundering. It can also make funding funding charities much easier and transparent for organisations.

Here’s how:

Blockchain makes it extremely easy to send money once you have set up your wallet and added funds. You could have an online forum for all the charities to register and a filter system to narrow down what charitable cause you want to donate to. Charities could be ranked by the quality of their relationships with donors.

That way we can see how well a particular charity works before donating our money. Every charity’s ledger would also be for public view through the blockchain.

Needless to say, having charities showing you where they spend money and posting things they are doing with it will build trust with the donors and the charity.

It would be a much better system than we have one now – where you don’t know where your money goes once you have donated to a particular charity.

Bitcoin and blockchain has the potential to revolutionize how we transact money. We are already seeing that shift happening, albeit a bit slowly.

By now, almost all the major financial institutions have invested in blockchain for one reason or another as shown by the image below:

On a lighter note, would you believe a couple got married on the blockchain!? It happened back in November 2015. They did it by posting vows and a legally binding contract on the blockchain.

Internet penetration in South Africa

Around two billion adults, most in the developing world, still do not have access to bank accounts. Being unable to access banking keeps them away for getting loans and in poverty.

The electronic nature of Bitcoin means that it is now relatively easy to set up financial services in hard-to-reach places or places where banks or governments have collapsed.

For this to happen, maximum number of people should be connected to the internet. South Africa still has one of the most expensive Internet connectivity prices in the world.

According to Ookla, the U.S-based broadband monitoring company, revealed that if you’re living in South Africa, you are likely to pay an average rate of $23.08 per Mbps, compared the global median rate of $5.36 per Mbps.

To combat this, FNB Connect is the new virtual mobile network launched by the South African bank to compete with the other telecom companies in the country.

FNB, which was once voted as the most innovative bank in the world, plans to turn the tide by lowering prices dramatically and as a result make internet more affordable for an average user.

The more people on the internet would mean faster rollout of Bitcoin and blockchain based applications.

A lot corruption also lies when businesses have to deal with regulatory challenges in different countries within Africa. They need to comply with different regulations and get their head around the political power constellations.

Using Bitcoins to do cross-border payments could be a game changer not only for South Africa, but also for the other 53 countries in Africa.

Bitcoin Trial in South Africa

In July 2016, a group of South African banks came together to connect their systems with distributed ledgers so that financial tech does not disrupt their businesses.

They are pushing ahead with the plans to test blockchain applications in a partnership that is supported by the regulators in the country.

Absa, a partner with Barclays Africa joined up with other banks (Standard Chartered, Rand Merchant Bank, Investec and Nedbank) to try to develop a blockchain-based banking system in South Africa region – a solution to create more efficient and less costly financial system.

Andrew Baker, CIO for Corporate and Investment Banking at Barclays Africa, said,

We see huge potential for financial institutions in Africa to embrace disruptive technologies like blockchain, and use them to empower individuals and improve the lives of their customers. However, its true value will only be realized if we work together to co-develop and share solutions to common problems,

According to MoneyWeb, the trial involved the South African central bank circulating a smart contract to other parties on the test network.

Clearly, banks want to be the first mover in this space.

Barclays Africa have been working on the distributed ledger technology for a while now and launched its Rise open innovation platform with its R&D experimentation.

They don’t stop there, Absa has been working on a private version of Ethereum blockchain and is already experimenting with smart contract technology. They have also joined up with the R3 CEV consortium and is one of the first African banks to do so.

This group of banks believe they can tremendously benefit from systems that rely on distributed ledgers as opposed to traditional databases used today.

Arif Ismail of the South African Reserve Bank told IT Web that regulators need to be closely involved with the rapid technological change.

Everyone wants to get their hands on what’s going on with blockchains and distributed ledgers. And some of the concepts are not that simple. So, from a regulator’s perspective, it’s imperative that we keep close to what’s going on.” he added.

Recently, a blockchain research arm of a bank in South Africa has said the technology could take up to 40% of banks’ revenue if it becomes a global standard.

Farzani, who heads Rand Merchant Bank’s Blockchain Initiative, for years researched the mechanisms behind traditional banking and disruptive technology.

He said, “I do believe we will end up with a blockchain for financial markets in South Africa.

There has been no official word from the Reserve Bank since 2014 on Bitcoin. The last statement was a bit of a conservative approach towards digital currencies. It said:

a digital representation of value that can be digitally traded and functions as a medium of exchange, a unit of account and/or a store of value, but does not have legal tender status.

Nevertheless, the appointment of South African entrepreneur Llew Claasen as CEO of the Bitcoin Foundation in June last year is increasing awareness and participation in the country.

SA’s Financial Players Bet Big on Blockchain

The efforts by the banks mentioned above were made 6 months ago and we are already seeing the results.

Just last week (Feb 7, 2017 to be precise), South Africa’s central bank, its central securities depository (CSD) and several of its largest banks came together to chart a course toward large-scale blockchain implementation.

The meeting held in Johannesburg, South Africa saw members of the blockchain working group elect a chairman, secretariat and set strategic objectives for the year ahead.

As a whole, nearly every participant must build and implement real blockchain products.

Monica Singer, CEO of Strate (South Africa’s CSD), described the group’s effort on blockchain as one that isn’t just about finding a new revenue streams, but evolving to survive.

She told CoinDesk, “My mission is to ensure that Strate can continue operating forever. But it will have to change its role. It’s like, if you’re a taxi operator you better embrace Uber because I don’t know how long you’re going to operate as a taxi.

Singer called her company the “mother of all intermediaries”. She wants to bring South Africa faster transaction time without Swift. Even the inter-bank payments network have started experimenting with blockchain and distributed ledger.

South Africa’s Blockchain Working Group is broken down into three streams; education, use-case development and technical construction.

It is because of the size of South Africa’s financial institutions the country sees a rapid progress – not too small to reach critical mass, not too big to get organized.

With only six major banks, consensus is easier to achieve.

Chocolate ‘Tuck Shop’

In the process of making the transition to blockchain, Ehsani, who is the chair of the Blockchain Working Group, said the group is experimenting with who is responsible for what and what happens if things go south.

Rand has already developed a an ethereum-powered prototype for selling employees chocolate and other snacks at its ‘tuck shop’.

Ehsaan suggested the chocolates could be replaced with other assets, where the tuck shop will act like a central bank.

He said, “If you actually take this tuck shop away, and don’t think about it as a tuck shop, think about it as an issuing institution, the chocolates now are no longer chocolates, but they’re bonds, equities, they’re whatever you want them to be – they’re assets.”

Use Cases

Strate conducts on average 350,000 trades per day and now they want to look at a way forward with blockchain.

Johan Pretorius, the chairman of Strate’s technical stream, last year worked on an ethereum blockchain to build a faster, more transparent way to issue syndicated loans.

Pretorius’s technical stream is split into four teams; Chain, Hyperledger, Corda and Enterprise Ethereum.

The idea is to build a common interface through which the projects can be accessed and stored in a repository that can be made visible to the external world.

To further assist in the identification of use cases, Pretorius said additional high-tech vetting tools could be implemented using other Strate services.

SA and Russia Join to Develop Blockchain Tech

Strate wants to make it easier to vote transparently, anywhere. The firm signed a letter of intent with Russia’s National Settlement Depository to help develop the offering.

This collaboration intends to initiate developments utilizing distributed ledger technologies (DLT). South Africa’s CSDs and Russia’s NSD will focus on the proxy voting use case.

Both CSDs and NSD agree that blockchain technology will “rapidly grow” and create a new “paradigm shift” in the current economy.

In April last year, the NSD was one of the first Russian organizations to develop a blockchain-based prototype for an e-proxy voting network.

The prototype was designed for corporate actions, such as securities transactions and issuing documents and data. It was an open sourced project with the entire code available on GitHub.

Collaborations between different organisations are absolutely necessary for distributed ledger technology to innovate faster.

If blockchain-based proxy voting idea takes off, this will not only make it more difficult for someone to vote in another’s place, but also help make voting more mobile.

Singer also realises, finding new ways to generate revenue will be extremely important. That means further development of its ethereum-based proxy-voting tool which was developed last year.

She said, “What we’re doing is we’re taking the proof-of-concept that we have, which is amazing, you can do it with your phone, you can even vote when you’re sitting on the toilet, because it doesn’t matter, you don’t have to attend the meeting.

South African National Digital Currency

Every now and then we keep hearing governments finding a ways to regulate Bitcoin, but people in the know say – they cannot, it’s impossible.

The best they can do is regulate the Bitcoin exchanges operating from their country or come up with their own digital currency.

Lo and behold, it seems South Africa is interested in the latter case.

A recent report by MoneyWeb says South African Reserve Bank is willing to issue digital version of its fiat currency. This new currency aka “national digital currency” is expected to be based on blockchain technology.

Tim Masela, Head of National Payments System at the South African Reserve Bank (Sarb), said –

If we go the route of issuing a digital currency, the objective would be to take advantage of emerging technologies so that we reap the benefits.

As mentioned above, countries in the African continent are embracing blockchain and digital currencies like no other. Tunisia, for instance, already has eDinar which is currently migrating onto blockchain.

Also, The Western African Economic and Monetary Union nations are expected to have a digital version of West African franc sometime next year, created by the Central Bank of Senegal.

As per Masela, the potential benefits that could be derived from a South African national digital currency include the convenience of use, greater inclusion due to its reach, real-time settlements and a reduced cost of use.

If South Africa does go ahead with the planned ‘national digital currency’, it could set an example for the rest of the world.

Sarb believes that the main challenge for such a transition lies in balancing the advantages offered by blockchain technology with the potential risks it has.

Blockchain Powered Social Media Platform – Steemit

Steemit is South Africa’s “blockchain-based social media platform”.

Launched in March 2016 by Ned Scott, a former financial analyst and Dan Larimer (founder of BitShares), Steemit aims to provide a place for individuals to create content, upvote the content and comment on stories – while making money.

Steemit shows how powerful the blockchain technology really is.

Think of it as a general social news website like Reddit, but the content is saved in a blockchain.

All you need to do is sign up as a user and start posting content just like other social media platforms. If the other users enjoy your content, they will upvote (promote) it. These upvotes translate into money.

You get paid for providing or curating content. Also, when you upvote a post you will receive a share of funds that post eventually generates.

In the recent past Steemit has been gaining a lot of attention from around the world. Here is what Google trend has to say:

How does it work?

Steem can be put into two different types of smart contracts depending upon the utility a user wants. The first being the Steem Power, which provides utility and leverage and the second is smart contract is called Steem Dollars.

Steem Power acts as the backbone of an account’s voting potential. The more Steem Power an individual has, the stronger their vote is on Steemit.

In case a user wants to convert back to the base currency of Steem, it will need to occur in 104 weekly conversions.

Steem Dollar is a debt-like instrument that promises to distribute $1 worth of Steem to the token holder at some point in the future.

Scott (founder of Steem) explains, “This is the blockchain telling the holders of Steem Dollars that, at any point in the future, the blockchain will convert their Steem Dollars into a dollar’s worth of Steem after a seven day conversion process.

This seven day conversion is in place for a good reason – to minimize the arbitrage attacks.

If the Steem Dollars were convertible to Steem immediately, a user could take advantage of a difference in price, convert their Steem Dollars into regular Steem and earn more than the $1 worth the smart contract intended for it.

How to Earn Steem?

There are two ways to earn Steem on Steemit. First is by writing a high quality blog post. The more votes that post gets, the amount of Steem that will be distributed to the writer increase.

Of course not every vote carries the same weight. The amount a writer will earn depends on both the number of votes and the amount of Steem Power a voter has.

For instance, a user with 1000 Steem Power will have a more powerful vote than say a user with 100 Steem Power.
This algorithm resulted in people going after the users that have more Steem Power and trying to convincing them to vote on their content. For example, one vote by Scott or Larimer (founders) can increase a post’s worth by hundreds of dollars.

To incentivize this sort of voting, there is also the curation reward paid out in the form of Steem Power. If a post does well, you earn more Steem Power than if a post doesn’t do well, thus incentivizing you to only vote for content that you believe is high quality.

In addition to this, not every vote from same account will carry equal power for every post. Voting on multiple posts reduces the strength of your votes (regardless of your Steem Power) depending on how much time passes between each vote.

The first reward is distributed 12 hours after the post has been submitted. The reward is divided evenly between Steem Power and Steem Dollars.

Voters receive the reward entirely in Steem Power.

Sure, behind the scenes Steem is quite complicated to understand, but it is doing very well so far – a good news for blockchain and Bitcoin enthusiasts.

Last year, a Steemit electronic billboard went live in Durban. The best part? No one paid for it.

It was fully crowdfunded on the Steemit blockchain. Here is the original crowdfunding post on steemit.

Oh and did I mention there is no fee for signing up on Steemit. In fact you get $7 in Steem Dollars just for signing up. As soon as you sign up, you can start posting content immediately.

If people like what you have to say, you will earn in the form of Steem Dollars.

Buy Bitcoin In SA

There are three ways to buy Bitcoin in South Africa in exchange for Rand – from a local Bitcoin exchange, a Bitcoin ATM and

South Africa has two major exchanges; Luno and Ice Cubed X.

1. Luno (previously known as BitX)

BitX is Singapore based South African Bitcoin exchange that has recently rebranded itself as Luno to reach customers outside of SA. It now has offices in London.

Luno’ is directed towards the popular expression in the Bitcoin community – “To the moon!”. The company wants to bring awareness and offerings to the people around the world, closely resembling to the rebranded name.

“Our new brand and product offerings are better aligned with this vision and will help drive our mission of bringing Bitcoin to everyone, everywhere,” said Marcus Swanepoel, CEO of Luno.

One thing that most of the Bitcoin exchanges have struggled to do is let their customers buy Bitcoin by using credit card.

Luno has already achieved that feat and is now ahead of numerous exchanges that are still struggling with regulatory issues. Although, currently in beta, the offering is only available to users in Canada, India and a majority of Europe.

Just after the rebranding, Luno launched their revamped website and mobile apps available for Android and iOS devices.

Deposit options:

  • Indonesian rupiah (IDR): Bank transfer
  • Malaysian ringgit (MYR): Inter-Bank GIRO
  • Nigerian naira (NGN): Bank transfer
  • South African rand (ZAR): Bank transfer (EFT)
  • Bitcoin wallet

Withdrawal options:

  • Linked bank account
  • Bitcoin wallet

2. Ice3x (pronounced Iced Cubed X)

The added benefit of using Ice3x is that it allows users to buy and trade in Litecoin (another popular cryptocurrency).

Ice3x have rolled out their services to Nigeria and the United Kingdom for customers from these countries to buy and sell Bitcoin using their local currency.

Deposit options:

  • South African rand (ZAR): Bank transfer (EFT)
  • Nigerian naira (NGN): Bank transfer
  • British pound (GBP): Bank transfer
  • Bitcoin wallet
  • Litecoin wallet

Withdrawal options:

  • Linked bank account
  • Bitcoin wallet
  • Litecoin wallet

3. Bitcoin ATM

South Africa’s first (and only to date) ATM was installed in Johannesburg back in 2014.

Exchanges require you to make an EFT, which can take a few days to complete and requires you to manually match bids on the exchange.

If for any reason you cannot do that, just walk up to the ATM, like Lamassu’s machine in Johannesburg and convert your Rands into Bitcoin. It is as simple as that.

The machine was installed in Kyalami, Johannesburg at a men’s salon called Metroman. It charges a transaction fee of 6% that goes to Tremendous Learning.

Rolf Deppe and Monre Botes from local IT coaching company ‘Tremendous Learning’ are responsible for this idea. The duo hopes to install more machines across SA in the future.

“We are also looking at putting machines in Pretoria and Cape Town, but we will use a much cheaper model that costs about R10 000,” says Deppe.

The best part is that you can order this machine for your city. It costs $6000.

To get Bitcoin at the ATM, users need to have a Bitcoin wallet installed on their smartphone. Here are some popular options.

The machine then scans your wallet’s unique QR code, takes the cash you’ve inserted, and that’s it! Within minutes you will see Bitcoins in your account.

4. Local Bitcoins

People use various metrics to track the adoption of Bitcoin around the world. Some track the Bitcoin price against US Dollar, while others (like me) prefer to look at the overtime increase of number of on-blockchain transactions per day.

Then there are people who prefer to watch the volume traded on As per, in 2016, the weekly Localbitcoins global trading volume increased from just under $10 million to around $18.5 million.

No matter how you look at it. It isn’t easy to figure out why people are using Bitcoin because of the very nature of the digital currency.

So why do these LocalBitcoins volume matter at all?

LocalBitcoins is a place where buyers and sellers meet online to make trades locally or over the Internet.

If you were to purchase Bitcoins from an exchange, you will not only have to wait for a few days to get your KYC and other formalities approved, but you will also need to share your personal details.

Looking at the user base of Bitcoin users – they are wary of giving out their personal information.

When you buy from LocalBitcoins you don’t have to share any personal information, which makes the trade much more private.

Especially in South Africa, LocalBitcoins is the preferred way to buy Bitcoin as evident by the trading volume – more than any other country in the world.

The LocalBitcoins platform itself is user friendly. Due to the privacy and convenience offered by Localbitcoins, prices there tend to be higher than what you will see in local exchanges.

Buyers are willing to pay a premium to get fast and a private access to Bitcoins. Users of darknet markets, are fond of this added privacy because it allows them to meet someone in person and do the trade.

There are a lot of countries with a Bitcoin exchange. For them, LocalBitcoins is the only option to buy Bitcoins.

Spend Bitcoin in SA

South African residents have plenty of options to spend their Bitcoins.

PayFast, South Africa’s leading payment processor have already started allowing Bitcoin as a payment. It has enabled over 30,000 local online Merchants the choice to accept Bitcoin.

Here is a list of places where you can spend your Bitcoins:


Takealot is South Africa’s biggest online retailer. With a renowned customer centric shopping experience and tonnes of awesome deals. They recently started accepting Bitcoin as a payment option through the Payfast payment option.

Simply choose Payfast Instant Eft on checkout and select bitcoin when it comes to making payment.


Africa’s biggest online marketplace, with millions of products for sale in hundreds of categories. You can purchase almost anything you can think of from their online shopping platform.

Bidorbuy recently announced that sellers could now accept Bitcoin as a payment method for their products. If you find that a seller you want to buy from, has not enabled the Bitcoin payment option, simply message them and ask them to enable it. They’d be silly not to as it comes at no cost to them.


Raru has hundreds of thousands of imported products to choose from. With a comprehensive list of subcategories, there is a high chance they have whatever you’re looking for.


All sorts of Gadgets for you to choose from, this eCommerce retailer sells the latest tech, including: Smart Phones, Wearable Devices, Drones, Toys and Gadgets.

They also accept Bitcoin through Payfast.


SilverBanana offer low/no MOQ digital printing, customization and branding solutions.


GrowGuru are South African retailers and experts when it comes to hydroponics and growing equipment.

7. Landmark PC

For all your PC, computer electronics and peripheral needs, go for Landmark PC.

8. RunwaySale

Runway sale offers flash sales on top brands of clothing and accessories for men and women.

9. SMACS is the #1 online design and home store. Get unique and members only products, across design, decor, furniture and lifestyle.

You could also go to and directly search for product(s) you need. The website will list the stores that accept Bitcoin.

Besides this list, there are more than 150,000 merchants accepting Bitcoin around the world. Here is the list of most popular ones including the likes of Microsoft, WordPress, Namecheap etc.


Cryptocurrencies and Blockchain technologies are slowly getting the attention they deserve with firms like MPesa and BitPesa leading in the African continent.

Interest from legacy banks and emergence of open platforms demonstrate that there is a huge potential for fintech and Bitcoin in South Africa.

With so many developments happening around Bitcoin and Blockchain, one thing is for sure, 2017 will be one hell of a year not just for South Africa but also rest of the world.

So let’s buckle up and enjoy the ride.