Crowdsourcing development projects through bitcoin

NAIROBI — Crowdsourcing the participation of workers in development projects and paying them with bitcoin micropayments could be a more efficient way to implement projects, Elizabeth Rossiello, chief executive officer of BitPesa, said during a panel session at Innovation Summit Africa 2018 in Nairobi, Kenya — an event hosted by The Economist. BitPesa is a digital foreign exchange and payment platform.

As opposed to hiring an international consultant to implement a development project, crowdsourcing participation could involve a group of local contractors bidding on a project, posting a photo of the progress after a day’s work, and then receiving their daily payment through bitcoin, she said. The payment could then be converted into local currencies through a local broker. In order to participate, potential workers in communities where projects are taking place would just need to get some sort of digital wallet or mobile money wallet.

“Using digital currencies as a means of transactions is cheaper, easier, and faster than waiting for expensive swift payments to come from America, as U.S. dollars, and then having to change that $100,000 payment into local currency,” she told Devex.

The development sector could look to M-Kopa Solar, a Kenya-based company, as an example of how something like this could work, she said. M-Kopa Solar offers a "pay-as-you- go" energy scheme for off-grid consumers, that uses mobile payments.

“We take the M-Kopa model, which is not new, but was very innovative, and we iterate off of that,” she told the audience.

But seeing these types of micropayment schemes as a mainstay in the development sector  could take some time. A lot of established players are hesitant to enter the realm of digital currencies because they are concerned that digital currencies are volatile and lack a regulatory framework, Rossiello said.

“It’s very early days and a lot of people have misinformation about digital currencies,” she said. “But how you would work around that would be the same way you would work around any currency volatility. The Nigerian naira was more volatile than bitcoin last year.”