Preliminary Insights Into the Adoption of Bitcoin in a Developing Economy: The Case of Ghana

Preliminary Insights Into the Adoption of Bitcoin in a Developing Economy: The Case of Ghana

Frederick Edem Broni (University of Ghana Business School, Ghana), Richard Boateng (University of Ghana Business School, Ghana) and Acheampong Owusu (University of Ghana Business School, Ghana)
Copyright: © 2020 |Pages: 19
DOI: 10.4018/978-1-5225-9715-5.ch064

Abstract

The purpose of this study is to explore the determinants of bitcoin adoption among individuals and also to assess whether the usage of the bitcoin technology for payment of transactions is preferable to other modes of payment. The study proposed a conceptual model analyzing the driving factors that influence a behavior towards the utilization of bitcoins in a developing economy, Ghana, through the lens of the unified theory of acceptance and use of technology model. A qualitative method which employed a purposive sampling technique in the selection of twelve respondents who understand and utilize the bitcoin technology was used. The findings showed that majority of the respondents were exceptionally positive about the idea of bitcoin and had the goal to keep utilizing it, on conditions with respect to the usefulness, the ease of use, the secureness, and the price value of bitcoin. The study offers practitioners with a framework based on theory that goes beyond not only investigating the adoption but also to assess the impact in utilizing bitcoin for organizational benefits.
Chapter Preview
Top

Introduction

In this technological age, there exist different innovative money payment systems through which financial transactions are made possible and many of these money payment systems are built to run on platforms such as the Web and smartphones (Nian, Lee, & Chuen, 2015). These money payment gateways have enjoyed a continued growth, from the likes of SlydePay, ZeePay, Skrill, BitPesa, Apple Pay, Google Wallet, M-Pesa, BitPay and PayPal (Nian et al., 2015). In ensuring secured transactions on these platforms, the phenomenon of cryptocurrency is emerging. According to Nakamoto (2008), transactions on the web has come to depend exclusively on Financial organizations filling in as trusted third parties to process electronic installments. In spite of the fact that these frameworks work well for most electronic exchanges, it keeps on suffering from the genetic shortcomings of the trust-based model which are also known as “third-party based” payment processing systems. Contracts entered by trading parties are not enforced by these “trust-based” or “third-party-based” payment processing systems (Master Card, PayPal, American Express, SlydePay, and so on). Since contracts entered are not enforced by these trusted third-party payment processor, additional costs are being incurred by trading parties in their quest to ensure that the trade executed is based on the terms of the contract (Knott, 2013).

A Cryptocurrency is a digital or virtual currency that uses cryptography which changes data into a mystery code for transmission over an open system for security and was the first truly decentralized and digitized modern money (Nakamoto, 2008). With the use of special cryptographic techniques, signatures and also an incredible rewarding system, one can say that cryptocurrency is unlike any currency in the world. It requires no third parties such as the banks, credit card companies and others, just a peer-to-peer transaction which means from the sender directly to the receiver (Lee, 2013). Bitcoin is one of the cryptocurrencies in the world. It first appeared online in January 2009. The creator was a computer programmer under the name Satoshi Nakamoto. His open source invention was peer-to-peer which meant transactions did not require an intermediary like Skrill or PayPal to function but rather be electronic with absolutely no physical involvement. Unlike traditional money, Bitcoins exist only online, and they are not considered as legal tender. Also, Bitcoins are not backed by any government or any legal entity, and their flow is not controlled by a central bank. With no third parties involved in transactions, the Bitcoin system is a very private one (Elwell, Murphy & Seitzinger, 2013).

This new mode of online financial transactions with bitcoins has transformed the perception of money in the form of traditional money as paper, coins, cheques, treasury bills, and so on, into seeing it in the form of mathematical money as digital ones and zeros or bits (Antonopoulos, 2015). In April 2016, the highest interest shown by African countries in bitcoins was Ghana. Ghana was ranked at number one with 100% interest in Africa (Scott, 2016). The creators of Dogecoin (a cryptocurrency) donated $342 USD to the Ghana Medical Help (2016) to purchase medical equipment. They also created a Cryptocurrency Endowment Fund to accept donations from donors using cryptocurrencies (Ghana Medical Help, 2016).

Key Terms in this Chapter

Payment Gateway: An online service that facilitates cashless transactions.

Peer-to-Peer: A distributed service whereby one person communicates with another, without intermediation by an outsider.

Cryptography: A strategy for encoding data in a specific way with the goal that those for whom it is planned can peruse and process it.

Blockchain: A distributed record or database of exchanges recorded in a dispersed way, in a network of computers.

Bitcoin: A computerized and worldwide form of money. It enables individuals to send or receive cash over the web, even to somebody they don't know or don't trust.

Proof-of-Work: An algorithm used to affirm transactions and produce new blocks to the chain.

Cryptocurrency: A virtual cash intended to fill in as a mode of trade.

Complete Chapter List

Search this Book:
Reset