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Why South Africans Are Investing on Bitcoins and Other Cryptocurrencies

The notion that Bitcoin and other cryptocurrencies are bubbles waiting to burst soon while a significant percentage of South Africans are investing on cryptocurrency. Many investors have high expectations that they will reap profits out of this wild ride.

According to Gareth Grobler from ICE3X which is a registered trading platform, he estimated that between 200,000 to 300,000 South Africans are directly involved in cryptocurrency trade.

From the statement released by Werner van Rooyen of Luno, he said that there is a significant increase in popularity and interest to invest in cryptocurrencies among South Africans. He added that on st December 2017, Luno platform recorded transaction of bitcoins worth R300 million.

Bitcoin is popular, but there are a total of 1,320 cryptocurrencies that one can consider. Bitcoin adopted blockchain technology and began its operations in 2009. Currently, the total market value of cryptocurrency is $377 billion, and Bitcoin commands $188 billion and translates to 56% shares of the cryptocurrency market.

While most of the cryptocurrencies available hold small value in the market, only 17 startups have a market value of $1 billion and above, and all these compete for investors. It is evident that Bitcoin enjoys commanding the larger percentage of cryptocurrency compared to other competitors.

Ethereum whose market value is worth $45.4 billion is the first runners-up in the rank of cryptocurrencies. It began its operations five years after the establishment of Bitcoin and Vitalik Buterin is the brain behind this startup. Dominique Collett who is a senior investment executive at Rand Merchant Investment (RMI) Holdings hinted that Ethereum adopted a better technology in its mining operations compared to Bitcoins.  Its technology is centered on coin mining which is relatively cheap compared to bitcoin whose mining largely depends on computer power.

While the recent rise in the price of Bitcoin didn’t exceed 1,500% by the time we wrote this article, Ethereum’s market value rose significantly by 7,400%. The rise in Ethereum’s value is attributed to a large number of South Korea investors who bought the cryptocurrency. Based on the above statistics, Ideally, Ethereum should be the market leader, and this is debatable. One could argue that there are chances of Ethereum catching up with Bitcoin. However, Van Rooyen can’t ascertain after considering other factors. The technical practice head at Norton Rose Fulbright, Mr. Rohan Isaacs that one requires a software worth R30,000 to R40,000 for successful mining of Ethereum coins.

Bitcoin cash whose market value is $26.7 billion is the second runners-up. It resulted from a disagreement between miners who were determining the validity of blockchain hence it was named “Fork.” The blockchain finally ended up in the hands of the minority of miners, and each took a bitcoin cash per bitcoin.

A second bitcoin disagreement between miners occurred in October 2017 resulting in Bitcoin gold. However, Bitcoin gold’s value has significantly dropped by 35% since its launch. Grobler regards Bitcoin Gold as a joke as it aims at Cardano. On the other side, Cardano already enjoys cryptocurrency market share of $3.4 billion, and its price has increased by 480% since it was launched.

Ripple continues to gain better trading grounds and hence ranked the third runners-up. The cryptocurrency uses similar technology like Bitcoin. Investors are impressed by the fact that it takes considerably less time to process ripple transactions. Whereas it takes only 4 seconds for a transaction to be completed in Ripple, it takes 4 hours for a similar transaction on Bitcoin. In 2017, Ripple recorded 3,840% increase in price, and this is a big boost for the investors.

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Written by Denis Opudo

Am an engineer who's a tech blogger, hit me up on dennis@techinafrica.com and we base our discussion on technology in Africa and the rest of the world.
Denis the Tech guru

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