According to the media, Angola is one of Africa’s most important economic powers. This is because its oil production represents more than 40% of its GDP and almost 75% of its exports (People’s Daily World). Thus, you can say that the Angolan economy depends mainly on oil. Visit Bitcoin Pro for more information on bitcoin trading.
To find out more about what is going on, you need to investigate further into Angola’s economy and analyze how it has been affected by the rising and falling of the bitcoin price.
7 ways how bitcoin benefits the economy of Angola:
1. By cutting out intermediaries
One of Bitcoin’s benefits to the Angolan economy is a peer-to-peer transaction, meaning no intermediary. You don’t need any personal identification to use it. The transactions can be done anonymously without disclosing too much information about yourself or your financial status.
2. It’s not affected by inflation
Unlike the Angolan currency – Kwanza, bitcoin is not affected by inflation since its price keeps increasing over time. Therefore, when you invest in bitcoins, they can be used to buy services or goods at any time without worrying about losing value. At the same time, if you sell your bitcoins at a higher price, they can be used to purchase products at any time.
3. It’s easy to use
All you have to do is download an application or open an account online without bringing physical money out of your pocket. You need internet access and the right platform to exchange money with whoever you want.
4. It’s fast
Bitcoin transactions are done within seconds without having to wait for your money to arrive at the other end or pay high fees for wire transfers. Of course, it would help if you had an internet connection, and you will receive the amount requested after a few minutes of confirmation by miners (People’s Daily World).
5. It helps the unbanked
Bitcoin can be used to transfer money across borders without paying high rates for wiring. With bitcoin, you can solve the problem of expensive transfers and bank fees that apply in most countries (People’s Daily World).
6. Any central authority does not control it
The inflation rate of Bitcoin is decreasing over time, and any central authority cannot control it. Bitcoin is more of a decentralized platform with no government or third-party involvement.
7. It’s an investment opportunity
The most significant benefit that this country has received from bitcoins is opening up a new market to trade and invest in.
There are more than 100,000 transactions made in bitcoins in Africa every day (People’s Daily World).
4 Negative effects of bitcoin on the economy of Angola:
Even though bitcoin offers many benefits to the Angolan economy, some factors need to be considered before using bitcoin. You can sum up four main factors below:
1. Lack of regulations
There is no regulatory body or laws for bitcoins, which means anybody can invest in them at any time without following strict procedures.
2. It can be used for illegal activities
The fact that bitcoin is anonymous and there are no guidelines to follow when investing in them can be used as a tool for criminals to make transactions anonymously. This might open up new windows of criminal activities, increasing crime rates.
3. It could be used to finance terrorism
It is suspected that terrorists use bitcoin to transfer money across borders without revealing their identities, increasing terrorist activities (BBC). Furthermore, since the price of bitcoin keeps expanding, it can also act as a strong incentive for countries with weak economies to buy bitcoins and use them to finance their activities.
4. It could be used for money laundering
The lack of regulations and the anonymity behind bitcoin transactions make it a platform for investors to launder money without revealing their identities (People’s Daily World).
Even though bitcoins could cause many economic problems, it is also one of the best opportunities to increase our financial transactions and diversify our investment portfolio.
The main problem that needs to be solved before bitcoin can become a common form of payment is security issues such as fixing authentication and preventing illegal activities.