How corruption kills corruption: Why Bitcoin will conquer Africa first?

Money is the most powerful weapon in the world, more powerful than Nuclear weapons or entire armies combined

When the forward-thinking President of El Salvador declared ‘Bitcoin’ as legal tender in his country, many Bitcoiners worldwide felt ecstatic as they believed that Bitcoin is the best money there is to protect people from never-ending inflation, some of us wondered when other countries which suffer from inflation would do something similar only to realize most governments across the world do not like to give up their control over their currencies as this gives them enormous power over their subjects.

All this is about change as Bitcoin emerges as the ultimate money /store-of-value that we have ever seen.

Here’s a short explanation of why we think African countries will be one of the first to bend the knee before Bitcoin.

As you know lot of African countries suffer from coups, civil wars propelled by endemic corruption, the root cause of this corruption — Money, the greed to achieve more and more of it.

First, let's understand your typical African or South American dictator, you see while being a dictator with a lot of power and no qualifications sounds like a lot of fun, in reality, it's a tightrope walk between making money via corruption ( so that you feed your underlings who run your elections ) vs not getting caught in scandals or worse plunge your country into a civil war and getting killed in the coup.

Now all this money you need to run your election machine needs to be stored safely and should be transferable without getting caught. If all your money is stored in a crumbling currency like the Nigerian Naira or a worse one, all your purchasing ( bribing ) power would vanish within a year and you would be left with nothing, so the first lesson in becoming a corrupt politician is having an offshore bank account in US dollars ( the world reserve currency).

The access to US dollar offshore bank account and the ability to operate it secrectly is what differentiates between a successful election and being caught in a corruption scandal.

While the developed world boasts of the amount of aid that goes into Africa, the capital flight that flows towards the dollar via offshore bank accounts is 10x more.

Offshore bank accounts and secrecy

Offshore bank accounts are accounts that people operate when they want currency hedge as they believe their currency suffers from devaluation and also escape the local monetary regulations as these offer a veil of secrecy, nearly impossible to penetrate for many African countries to get details of its politicians’ affairs, this is why US dollar is so popular as a global reserve currency.

Politicians and their businessmen cronies all operate via offshore bank accounts and settle their quid-pro-quo bribes through these channels.

Offshore banking is not perfect though

While offshore banking does carry certain allure, it does have it’s own set of issues

1. you need to deposit a certain amount of money usually $10,000, to begin with
2. Getting money out of your country and getting it into an Offshore bank is difficult and getting more and more difficult (unless you have the blessing of the ruling parties in your jurisdiction).
3. you need to have a good relationship with the bank and more importantly, the bank needs to have no relationship with your country. So if you are a politician from the US, the UK or most of the developed world you would have tough luck hiding your money trail.
4. Last but not least, while the US dollar does retain its purchasing power compared to any other fiat currency it's losing its value compared to Bitcoin.

Why the corrupt elite will be forced to adopt Bitcoin?

As explained previously being corrupt and amassing wealth is not a choice if you are a politician in a corrupt African country it's a necessity, without bribing you way nothing gets done in these countries. At the end of the day, as everywhere Money is what moves things.

Imagine two business families that yearn for a contract from a government official, one family has saved up their money in a US dollar bank account earning a 1–5% annual interest which means their deposits barely cross 10% growth in five years, now let's imagine the second business family invested in Bitcoin and held it in their homeland on a hardware wallet, Bitcoin went by over 1000% in last 5 years, which means they have lot more money to play with.

Using Bitcoin to store your stash not only makes more money in the long run but it is also incredibly easy to handle, you can transfer it easily to anyone you want without any restrictions whatsoever, and you can also sell it for local currency should you need that.

Now imagine this, the second family that invested in Bitcoin wins his government contract but will also work towards jailing the first family that's no longer in favor of the government.

This is the raw power of ‘Money’ in corrupt governments, those who have money gain more power and money while the ones without end up losing it all.

Now the reason why the 20 trillion dollar offshore banking still thrives despite the invention of Bitcoin is this, people with Money move slowly. They take time to adopt new things, they don’t want to throw their money on things they don't fully understand or trust and this takes time. As you read this, a 20+ year old kid of a corrupt businessman from Africa would have invested in Bitcoin and in 10 years would see his family's wealth and power grow as a result.

The idea of Bitcoin as Money is a quantum change as there are so many dots to be connected to understand its ‘real power’, this sort of change usually takes one generation — 20 to 25 years.

A Rich kid first hears about Bitcoin and invests in an Altcoin hoping to make it bigger than Bitcoin ( like we all do )

In 4–6 years loses it all in the altcoin, then learns to invest in Bitcoin only.

In the next cycle ( 4 years ) sticks with Bitcoin and makes decent returns, tells his dad. The dad now invests a little bit of money in Bitcoin. Later the dad panics and sells Bitcoin when he sees a 60% price drop and invests in stocks. In the next cycle ( another 4 years ) the dad learns that had he just stuck with Bitcoin he would have made much better returns.

In the next cycle ( 20 years from the start ) the dad finally learns to hodl and becomes a Bitcoiner.

As you can see, all this process of learning and unlearning takes time lots and lots of it but the corrupt elite will learn it the fastest as their lives are dependent on protecting their wealth lest they get caught in the next ‘corruption scandal’.

The wider adoption

The wider adoption by the middle class and then everyone else will take a longer time ( 10–20 years or more ) as the middle class considers only ‘Real estate’ as their life-saving vehicle and have no idea of what investing is all about, it will literally be 20 years before the middle-class moves to Bitcoin to protect their ‘family savings’.

The Proof

If you look at countries with high Bitcoin adoption, Nigeria is a front-runner, the constant devaluation of Naira combined with endemic corruption have made Bitcoin a favourite in this country. Most of the youth of Nigeria have invested in Bitcoin and over the next 10–20 years the entire country will learn to do the same and once that happens there is no looking back.

US dollar’s reign is coming to an end

The US government runs an enormous amount of debt ( at $34 trillion and rising fast ) whose interest is served mainly by creating by new debt, while this sounds like a Ponzi scheme, it really is, the only reason the world trusts and uses US dollar is simple, all the other currencies have a worse track record of inflation compared to the US dollar. Investors globally have no option but to invest and hold the US dollar. Investing in Gold has its own set of problems as explained in other articles ( notably confiscation and its difficulty in transferability ).

The invention of Bitcoin is set to change the world of Investing forever.

Conclusion

Once the entire government elite of a country holds their family wealth in Bitcoin instead of the US dollar they would be a lot more amenable to making Bitcoin the legal tender of their country isn’t?

The corrupt government elite will be forced to follow the steps of President Bukele and declare Bitcoin as legal tender, only 20 years after this visionary.

Final thoughts

When a country uses Bitcoin as its currency, its people will never have to suffer from inflation that is endemic to all fiat currencies.

When a country uses Bitcoin as its currency, the political elite can no longer steal the country’s wealth in the form of never-ending inflation.

When a country uses Bitcoin as its currency, governments no longer get away with economically destructive policies, as bad policies would have an immediate impact that cannot be covered up with endless money printing.

When a country uses Bitcoin as its currency, houses will only be used to stay instead of being used as investment vehicles that tether people to a given city and force them to live with bad policies.

When a country uses Bitcoin as its currency, its people will finally be free to vote with their wealth, not just their feet when they decide to escape from civil wars/ violence/ riots, etc.

When the entire world uses Bitcoin as its currency, Humanity enters the next level of prosperity.