Local digital currency investors have vowed not to back down from investing in Bitcoin despite its slight drop to $9,588 (Sh992, 358) yesterday.
The 12.8 per cent drop is from a high of $11,000 (Sh1.13 million) recorded for the first time since the cryptocurrency was created in 2008, a surge that’s saw many doubters claim it was a bubble that would burst soon.
Unlike traditional currencies such as the shilling and the dollar which are regulated by the government, digital currencies such as Bitcoin operate independent of a regulator. They are organised in a system known as block chain, an online ledger, that keeps a record of all transactions made in a centralised place.
The transactions are collected in blocks, which are found approximately every 10 minutes in a random process called mining. As transactions transfer ownership of Bitcoin balances, each of these blocks represents an update of the user's balances on the network.
“Majority of the people will say it’s a pyramid scheme that it will come down...this is not a scheme, they doubted Mpesa and today it’s the talk of town and has been adopted by banks in the country,” Rewell Kinuthia, one of the investors told the Star.
Kinuthia has been an investor since the year began when the cost of one Bitcoin was slightly above Sh100, 000.
According to him, the high level of security involved in the transaction of Bitcoin is what gives him confidence to invest in digital currencies which currently total to about 1,500.
Today, he has invested in one more cryptocurrency knows as Electronium, which is a British online coin.
Also an investor in the cryptocurrency is William Otiso, a father of one who resigned in 2015 to invest in Bitcoin, after a 20-years career in the IT industry. At the time, one Bitcoin was only worth slightly above Sh20, 000.
Despite being skeptical about the investment, he chose to risk at least Sh1 million that he invested in Bitcoin. He intends to invest in at least two more cryptocurrencies which include Etherium and Light coin.
“We are at the very cutting edge in regards to how transactions will be handled in the future, and digital currency is the way of the future,” Otiso said.
He hopes that the government will legalise the currency, promising to invest more for the future of his family.
The excitement among Kenyans on the fast surge in the value of Bitcoin comes a week after the Central Bank of Kenya raised an alarm that cautioned investors on investing in cryptocurrencies.
“This is a risky venture; the consumer is not protected and could well be a Ponzi game of a kind, we want to be sure that everybody knows the risk involved would come back to haunt us and can cause financial instability,” Njoroge told the press a week ago.
However, he did not dispute the block-chain technology used in the transaction of cryptocurrency saying that they are working with peers across the globe to find out if it can be used in positive ways.