Cryptocurrencies burst into the limelight when the prices of one bitcoin (BTC) reached a new all-time high of $19,783.06 (Sh1.97 million) spurring a massive worldwide interest in the blockchain-backed technologies.
Like betting, cryptocurrency craze has caught up with Kenyans with some locals putting millions of shillings at stake in a potentially high-reward but risky gamble.
A recent report by Citibank analysts said that Kenyans have accumulated holdings of bitcoins estimated at more than Sh163 billion, which could cause widespread disruption to the economy were the virtual currencies to collapse.
As it stands now, there is no denying that cryptocurrencies have come a long way and a variety of businesses both online and offline are now accepting bitcoins as payment.
Such popular worldwide stores include Microsoft, Overstock, Newegg, Dell among others.
In Kenya, cryptocurrencies are still a no-no after the Central Bank of Kenya (CBK) and Capital Markets Authority (CMA) warned investors separately that investing in such deals is risky as they are not legal tender.
Currently, there are no guidelines or legislations on how trading in forex online or dealing in cryptocurrencies should be done.
Despite all the odds stacked against them, a Nairobi-based start-up, Boxlight Electronics, has gone ahead to become the first adopter of bitcoin payment in Kenya for its products.
The firm, which deals in the sale and distribution of television (TV) sets, home theatres and home appliances, says bitcoin as a form of payment is becoming a must-have for companies that trade online.
The company has a warehouse along Mombasa Road and imports its electronics goods from China whose prices range between Sh6,999 and Sh1.2 million.
“We have received tonnes of requests from our customers to pay using digital currencies.
"As a company whose 90 per cent of customers are young, tech savvy and predominantly online we choose to be all inclusive and adapt to the needs of those that prefer this type of currency,” said Boxlight Electronics chief executive Robinson Murage.
A majority of their customers are aged between 24 and 45 with most being men.
Most of these customers trade in bitcoins, and from the proceeds they get, they utilise that to make online purchases.
“We allow them to use the bitcoins and we cash when the price of bitcoins goes up. If it doesn’t go up, we hold them,” said Mr Murage.
He said to pay for products via bitcoins several options exist, customer can choose to have a bitcoin cash wallet – an app that lets you receive, hold, and spend bitcoin cash, a good example is the BitPay bitcoin wallet app.
“If you don’t yet have Bitcoin or Bitcoin cash in your wallet, you’ll need to buy some by converting any currency into and out of Bitcoin using different exchanges,” said Mr Murage.
To make payments, a customer simply sends the payment from the wallet app by scanning the QR code on the checkout section on the website for the product a customer select.
If you purchase bitcoins using LocalBitcoins.com, the bitcoin will appear in your local bitcoins wallet.
“From there you can easily send the bitcoin to the Boxlight Electronics Bitcoin address,” said Mr Murage.
During transaction, the customer has a window of 15 minutes during which one can make payment.
A client needs to make payment within those 15 minutes, since during this duration one is safeguarded fluctuation of bitcoins and that means that a customer pays for exact amount.
Besides lack of authority approval, bitcoin price volatility is the main reason behind low adoption for payment in Kenya, making many companies reluctant to endorse such payments for their products and services.
“Like in any other market, bitcoins prices fluctuate a lot. For us once we receive payment in bitcoin, I track the crypto news to understand where the market is moving if its low, I’ll just hold onto them and sell or cash them when the time is right,” said Mr Murage.
They cash the bitcoins using M-Pesa, Equitel or other mobile money transfer wallets.
This article was originally published on the Daily Nation's Smart Company magazine.