The Cape Innovation and Technology Initiative (CiTi) debuted BitHub at the Bandwidth Barn in Woodstock this morning.
Ian Merrington, CEO of CiTi, described SA's first digital currency hub and incubator as a space where anyone from entrepreneurs and developers, to designers and coders, can come together to share ideas and collaborate. "There are many viable digital currency ideas in South Africa that are not coming to market because they lack the infrastructure and support to take it further. BitHub is that space."
Speaking at the event, Merrington mentioned how media reports around hackers and cyber criminals have left the average person on the street with a negative perception about cryptocurrencies. Part of the motivation behind the establishment of BitHub is to dispel these ideas and educate people about the potential of this kind of digital currency, he noted.
Bitcoin in action
Much of the morning focused on payments and the evolution of global financial transaction infrastructures.
In July last year, local payments gateway PayFast added Bitcoin as a payment method on its platform and is currently the only payment processing company in SA that accepts Bitcoin. In its first week, Payfast saw R50 000 worth of transactions; a figure that has remained relatively consistent.
Discussing PayFast's decision to accept Bitcoin, Roslyn Lavery, business development manager at PayFast, outlined that the move was largely exploratory but has received a positive response so far. "While we are still in the early adopter phase, those who are using it are using it quite consistently," she said, continuing that most of the merchants accepting Bitcoin are tech-related companies.
Looking to the future, Lavery stated PayFast is "cautiously optimistic" about the potential of this digital payment network.
Also speaking at the event, Francois Paul, a software developer at BitX, a Bitcoin service provider and SA's largest Bitcoin exchange, championed the benefits of the cryptocurrency. He outlined his belief that Bitcoin is an ideal option to cater to previously unaddressed market segments, but noted education is required.
"Bitcoin is a powerful concept but in its raw form it isn't always easily digested. What people need to know is that Bitcoin is faster, cheaper and more secure than more established payment providers."
In order to better establish Bitcoin in SA, we need to reduce complexity, or at least the perception of complexity, he continued.
Carel van Wyk, a BitX software engineer, discussed what he calls "the Internet of things ? with wallets". He outlined the potential of machines talking to machines and being able to transact and make exchanges via digital currencies. No human interaction needed. As an example, he cited South African Bitcoin start-up Bankymoon's establishment of the world's first smart utility grid solution that accepts Bitcoin payments.The transaction doesn't require any interaction with established financial institutions; communicating directly with the smart metering devices.
All of the speakers stressed how novelty systems like Bitcoin function to eliminate barriers to entry for the unbanked; empowering those who have previously not participated in transactions via more established financial institutions. The Bitcoin ecosystem has the potential to do so by reducing transaction fees and the cost of remittance. They described the digital currency as a viable solution to a real world problem, and outlined the opportunities for innovation and new business development.
Trust was also highlighted by the various speakers. "Your typical consumer actually doesn't care how money works," stated Paul. Digital payments, where the user doesn't have any contact with a physical note or coin, are already a reality and this is just the next step.
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