Paxful, the peer-to-peer alternative to LocalBitcoins, has reported to CCN that over 17,000 peer-to-peer trades per day take place in Africa using their platform.
The majority of these trades take place with iTunes and Amazon gift cards as the payment methods. You read that right: people in Africa are acquiring Bitcoin by using gift cards, which they can buy in their local fiat.
Africa is the top market for Paxful at present time, and they have gone a long way to acknowledge as much. As CCN recently reported, they are in the process of building dozens of schools there. The schools will include blockchain and cryptocurrency education, so that the next generation can be prepared for a multi-faceted economy.
A long-standing thought on the subject of Africa and other “unbanked” areas is that, similar to the way they moved from no telecom service at all (due to a lack of infrastructure investment) to a wide usage of cell phones and later smart phones, they will skip past credit cards and bank integration and go straight to cryptocurrency as well as solutions built on blockchain.
While Paxful isn’t the only peer-to-peer market which allows for the use of alternative payment methods such as gift cards, it seems to be the most active. A cursory search of the LocalBitcoins markets in these payment methods didn’t reveal many results. Meanwhile, it’s evident that people are making frequent use of gift cards on Paxful:
iTunes Gift Cards Top Traded Item in 2018
Paxful reports that nearly $300 million USD in iTunes gift cards were transacted in African markets over the course of 2018. It’s actually their top trading pair. Amazon is in second place at around $165 million. National Bank Transfers were far less used, at just under $50 million.
Paxful’s volume has not been affected by the bear market in Bitcoin over the course of 2018. The whims of the market seem to have had little effect on the spread of cryptocurrency, as more and more Africans realize the potential of Bitcoin and other cryptocurrencies to connect them to the global economy. Ultimately, with the advent of stablecoins, acquiring nearly any crypto could eventually connect them to a Western banking system for which access was previously impossible or mostly impossible for them.
Much like the unbanked who use Purse.io to acquire bitcoins with Amazon credits they earn through Amazon Turks, people who pay with iTunes Gift Cards pay a premium for their coins. Accepting gift cards as payment enables traders to earn rates that have since gone away in regular fiat payment while it also enables the unbanked to acquire cryptocurrency.