The Western Myth of Bitcoin in Kenya
A communal working space at iHub, a centerpiece of Nairobi's tech community. Image: J.P. Lawrenc


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The Western Myth of Bitcoin in Kenya

The bitcoin backers I spoke to are hopeful for the technology's progress. Yet they work against an environment of Western condescension.

Lost and and trying to navigate by the maps on our smartphones, we were on the outskirts of Nairobi in search of Bejo's Bar and Grill, which we were told was one of the first businesses in Kenya to accept bitcoin.

But when we arrived at Bejo's, a rural joint with a dusty open patio in front, no one seemed to know what bitcoin was. The bar looked nothing like the slick photo of a hip blue neon-lit bar we saw on a Kenyan bitcoin website. "I don't think anyone here is using bitcoin," Daniel Nyairo, the Kenyan writer who was with me, said.


I found out later that Bejo's no longer accepted bitcoin, having used a payment processor called Bitsoko until September. Allen Juma, who founded Bitsoko with his brother Gibson, said they attempted to build partnerships with merchants like Bejo's at first. They then realized they didn't have enough users to focus on merchants, and that many of the 12 local businesses they worked with didn't understand the blockchain. They put a hold on their merchant efforts, pivoting their focus to creating a microtransaction app for bitcoin.

The photo on the Bitsoko website touting Bejo's was a relic of their earlier hopes: Juma said he had taken a photo from a nicer bar in downtown Nairobi he hoped would one day accept bitcoin. The photo was aspirational.

This story was supposed to be about the success of bitcoin in Africa. Western media portrays the continent as parched tinder for digital currency, ready to catch fire. Startups like Bitsoko, which recently won a $100,000 challenge grant from the Bill and Melinda Gates Foundation, have received significant amounts of money in this hope.

On the ground, the picture is a bit muddier. For all the smoke about bitcoin in Africa, few in Kenya have actually adopted it, and the currency is still trying to find its niche. The bitcoin backers I spoke to are hopeful for the technology's progress. Yet they work against an environment of Western condescension.


"People want to hear about how bitcoin can help fight poverty. Talking about how some guy is getting rich? The audience in the West is not really interested in that.

Elizabeth Rossiello encountered this when she founded Bitpesa, a startup that connects digital currency to local currency, in 2013. The New York native, who's lived in Nairobi for seven years, had been working microfinance in Kenya before starting Bitpesa. There used to be one expat happy hour in Nairobi. Then Westerners heard about bitcoin in Africa.

A small gold rush of social enterprise companies flocked to Kenya. Many bitcoin startups disappeared or changed directions shortly after.

"I think a lot of people got excited by the whole, 'by God it's going to save everything,'" Rossiello said. "You still need a strong business that then delivers that product."

The press paid much attention to bitcoin as a way of accessing the $1.5 billion a year remittance flow to Kenya. Within a month of founding her company Rossiello became inundated with reporters asking about how bitcoin was going to transform remittances, the global flow of money from foreign workers back to their home countries.

"We had an article in Bloomberg in November that went everywhere just as the price went up, saying, 'Bitcoin in Africa for remittances—it's going to kill Western Union!'" Rossiello said. "And that's the first article of the many, many articles that came after that were about bitcoin and remittances, and the press just kinda ran with that."


The problem was that the remittance market did not catch on as predicted. The startup Beam, for example, was launched in Ghana in 2014 by Nikunj Handa and Falk Benke in a bid to capture the remittance market through undercutting its competitors. In August, Beam moved on from using bitcoin for remittances, which Disrupt Africa said was "due to lack of uptake related to the cost of exchanging bitcoin into local currency, limited merchants accepting bitcoin as a means of payment, and price volatility."

"Now, we have certainly seen remittances as part of our customer segments, but it's not the only segment, and I don't think it can sustain an entire business," Rossiello said, whose company now splits its efforts between remittances, speculators and e-commerce.

Bitcoin was also sold as a way of reaching the poor and unbanked, and investors who came to Africa would sometimes blend their sales pitch with an ounce of evangelicalism. Rossiello said she has to remind people she is not vaccinating orphans, that she is running a business, albeit in an emerging market. "We cannot tell you we believe we're going to raise people out of poverty," Rossiello said.

Rossiello has to stress this because these investors often don't understand Kenya, or perhaps don't even want to understand Kenya, but instead just see Kenya as a place without Western technology and that is thus in need of it.

Nairobi's Techpreneurfemales!! Elizabeth RossielloJuly 25, 2015


Rossiello (second from left) joins more Nairobi-based entrepreneurs at the 2015 Global Entrepreneurship Summit, which was held in July in the city.

Many investors don't realize that simple things take longer in Kenya, she said. "When you [get] tremendous traction, they don't understand what that traction means," Rossiello said. "They say, 'Oh, there's a button for that in San Fran.' Not really a button for that here."

Rossiello said among the local tech entrepreneurs community, she has seen requests for "a local Kenyan with a Western mentality."

The journalist Nyairo remembers chatting online with an American who wanted to set up an NGO in Kenya. This American had never been to Kenya, or anywhere in Africa. In fact, he did not seem not to know much about Africa at all.

Growing up, Nyario would listen to news reports about his county on the BBC, and he always wondered why the Kenya on the news reports seemed alien to the Kenya he lived in. The reports that came out about bitcoin in the beginning seemed like a modern echo.

"People want to hear about, talk about how bitcoin can help by fighting poverty," Nyairo said. "Talking about how some guy is making money and getting rich, the audience in the West is not really interested in that. People want to hear stories about Africa related to pain and poverty, and how people are helping that."

This is not to say speak ill of everyone working toward bitcoin in Africa. Nyairo has covered digital currency in his home country for the news section on He believes in the blockchain.


The bitcoin community in Kenya is small, but it's growing, Nyairo said—a few hundred regulars, most of them traders. Bitpesa recently issued a statement through a local daily saying that it has more than 5000 active customers in Kenya.

"At this point there is very little bitcoin activity in Kenya," said Stephen Gornick, a developer interviewed in a recent documentary on bitcoin in Kenya. In an email, Gornick said the actual volume of bitcoins trade in Kenya was about 50 bitcoin per week at its peak. The currency has potential, Gornick said, but at this point "it's hype because there's not much going on."

Nyairo said he doesn't expect widespread bitcoin adoption to take off soon, unless a killer app arrives. There are so many obstacles to widespread bitcoin adoption. The Kenyan government has very been unclear on how it will regulate bitcoin, although it has issued a cautionary notice on its use.

This 2011 file photo of Kenyans making money transfers with M-Pesa is illustrative of a Western narrative about the unbanked needing imported technology that discounts the efforts and needs of local entrepreneurs and markets. Image: AP Photo/Sayyid Abdul Azim

Illustrative of this is the case of Kipochi, which in 2014 promised users the ability to send and receive bitcoin through Safaricom's M-Pesa network. However, within twelve months the project suddenly went dead. According to Fast Company, industry insiders said the media buzz around Kipochi and a Motherboard story reporting that Kipochi's adoption meant one-third of Kenyans had access to a bitcoin wallet—though far fewer actually used the currency—"spooked Kenyan regulators."

Kipochi founder Pelle Braendgaard said M-Pesa, celebrated as a way of introducing digital money to the masses, actually used its immense power as a gatekeeper to keep startups out of the market. M-Pesa's decision to stop bitcoin-related transactions on its platform is something Bitpesa and Lipisha Africa are currently challenging in court.


"I think it's great that we do have bitcoin, but I think Africa needs to develop its own solutions."

"They are all concerned with 1. protecting existing markets [and] 2. complying with international anti-money-laundering rules that specifically stop them from reaching the unbanked migrants, international traders, etc.," Braendgaard, who is no longer involved with Kipochi, said in an email.

"I think in the process of covering the story at first, people get excited, and people who have an idea that Africa is a place that needs charitable help get excited," Nyairo said. "It comes down to the general picture that has been drawn of Africa in the West. You might believe that you are helping, even though you are an entrepreneur just like any other."

Of course, one may wonder why it matters what narrative or another drives commerce to nations in desperate need of it. These narratives, however, are dangerous when they smudge the messy realities of African countries. The Nigerian-American writer Teju Cole, in an article critiquing America's reaction to the Kony 2012 video, explains how Africa has always been seen as a playground for Western adventurers:

One song we hear too often is the one in which Africa serves as a backdrop for white fantasies of conquest and heroism. From the colonial project to Out of Africa to The Constant Gardener and Kony 2012, Africa has provided a space onto which white egos can conveniently be projected. It is a liberated space in which the usual rules do not apply: a nobody from America or Europe can go to Africa and become a godlike savior or, at the very least, have his or her emotional needs satisfied. Many have done it under the banner of "making a difference."

The solution begins, as Cole writes, with humility and respect for the agency of the people affected. Africa presents real opportunities for growth in digital currency, but top-down narratives may not be the best way to find these opportunities. It fact, it's a good way to create a bubble. People on the ground in Africa are busy working to adapt the promise of digital currencies to their own needs, on their own timelines and without outside direction by the ideas of well-meaning Westerners.

Allen Juma at Bitsoko is pivoting the company from merchant payments to researching a microtransaction app for the Gates Foundation. Juma has pivoted before, from dogecoins to bitcoin. When he founded Bitsoko two-and-a-half years ago, he was working a part-time job at a cyber cafe. He repaired and maintained computers, but he did not have the internet access he needed for his business.

Juma acknowledged Bejo's was not the bar pictured on his company's website. Bitsoko now has a new website with new photos, and Juma said they are experimenting with other blockchain applications in Kenya and elsewhere. "I'm not saying we're perfect," Juma said. He said he hopes to pry open the market for greater bitcoin adoption later on. "I'm hoping to encourage others," Juma said. "It's not the best, survivability."

"I love bitcoin to the bone," Juma said. "I do not think bitcoin is going to change everything. I don't think it is enough. I think there is more to improve. I think it's great that we do have bitcoin, but I think Africa needs to develop its own solutions."