My Personal Bitcoin Story: A South African Perspective
I first met Michael Hudson, CEO of Bitstocks, via a Skype call in November of 2014. At that point he had already established Bitstocks and was looking to hire the marketing services of the digital agency that I worked for. Whilst the strategic and consultancy side of the agency was UK based, the support team (to which I belonged) was based in South Africa - not exactly a country renown for being on the bleeding edge of technology. In general, I would say we probably run about 3 - 8 years behind first world countries when it comes to innovation and trends.
‘Yes, we do have computers and Internet, albeit at a typically slower speed and excessive cost. Yes, even the poorest own mobile phones - sometimes even two. And no, I do not have a pet lion, giraffe or zebra that I ride on to work!’
That said, I was absolutely clueless when it come to this ‘bitcoin thing’. I had heard of a ‘coin’ that you could ‘find’ on the Internet, which then was on your computer and that it was making some people quite wealthy, but I was baffled by the concept of how this all worked from a technical perspective, let alone the financial side.
As the call began, I recall sitting hanging onto Michael’s every word as he explained his personal journey with Bitcoin. How he had started dabbling with technology and entrepreneurship as a young teen. How he had gone on to specialise in traditional finance and carved his path on the fast-paced, competitive trading floors, making huge profits for companies that took massive cuts of personal investments. How he had completely dismissed bitcoin initially as nothing more than ‘monopoly money of the Internet’. And how, after some time, a life-changing conversation and extensive research, he came to realise he was woefully wrong about Bitcoin’s purpose and potential.
When the time came for us to ask questions, I remember having one after another. Michael patiently answered them all, and for the first time I had a solid grasp on what this ‘bitcoin thing’ was all about, but I was still highly skeptical.
Over the next year or so, I was the lead marketer on the Bitstocks account, having countless conversations with Michael, spending hours wading through material he offered for my own research, slowly but surely putting the pieces together and seeing why he felt the way he did about Bitcoin. Yes, the technology was impressively ground-breaking, but it was the philosophical aspect that intrigued me most.
Michael guided my education through a world I accepted existed, but one I had not felt compelled to fully understand. A world in which governments used economic power to manipulate nations, financial frameworks to line their pockets, and monetary policy and regulation to keep people wholly indebted and enslaved to the system.
A world, which I was, regrettably, all too familiar with.
Modern slaves are not in chains, they are in debt.
You see, I had been sinking deeper and deeper into the vicious cycle of debt and interest. A series of unfortunate personal events resulted in some rather unwise financial decisions, all made with the best intentions of attempting to continue providing for my family and dependents.
At first I renegotiated my car finance repayments, cut what little ‘luxuries’ we had from our budget, reduced my life insurance payments to a minimum and cancelled our medical aid. (Bear in mind, in SA we do not have the equivalent of the NHS and we pay for both government or private schooling too.)
Ashamedly I took on more loans to try consolidate previous loans, using one credit card to pay the installment on another, and all the while making little headway into reducing the capital as interest compounded month over month. At this stage, South Africa had no laws preventing over lending from financial institutions and I can assure you that I am just one of millions of people who should never have been extended the credit I was. It simply perpetuates a cycle of poverty and to this day our statistics of household over-indebtedness is nothing shy of alarming.
At my absolute lowest point, I remember looking at my household budget and breaking down in tears. Before we had even considered paying for basics such as power and groceries, we were severely in the red and, at that moment, I saw no hope of being able to adequately feed, clothe and provide for my 2 young children’s immediate needs, let alone their future requirements.
It was then that my husband and I decided we had to make the drastic, but necessary, decision to enter debt review. This process involves handing your debt matters to a company who acts on your behalf in the courts, securing lowered interest rates and monthly installments with your creditors for the duration of your court order. You have to surrender any cheque accounts and are denied access to any credit facilities, with your name being flagged at national credit bureaus. My revised repayment structure would take 5 years to clear the accumulated debt. The benefit is that you are protected from any legal action from creditors such as asset confiscation, and the lowered repayments are designed in such a way as to allow for the most basic expenses to be covered.
Of course, Michael knew none of this about me.
In fact, few of my close friends or family even knew the extent of the financial mess I was in. What they did see, however, was the strain and pressure, my deteriorating state of mind as I battled the stress of financial burden and the growing anxiety of our future stability. I feared any emergency that would require any of my family to be hospitalised. I worried about unforeseen expenses in relation to the household or car that would set us back even further. I was in constant state of panic about money, or the lack thereof. What if something had to happen to me? What if I died? As the breadwinner, I had not provided enough to keep my children and dependents comfortable. It was utterly exhausting, and a debilitating feeling I do not wish upon anyone.
Fast forward a few years, and my outlook is, fortunately, significantly different. I made my final debt review payment a month ago, and I am finally free of the shackles of debt. I officially own my car (after an extended 9 year period of repayments), and I have been able to reinstate hospital cover for me and my family, should any medical emergency occur. I do not owe a single company or person any form of money or interest. Our financial goals have changed from living pay cheque to pay cheque, to looking forward to our long-term needs. I have been able to put away a small, but growing, amount for an unexpected ‘rainy day’ and I continue to build on our nest egg for those golden years of retirement. (Again, despite our high rate of taxation, SA offers pittance in the way of government pension, with the current payment - if approved - in the region of about £100 per month. Hardly enough to cover housing costs, let alone any other expenses.)
And I owe much of this to the introduction to Bitcoin.
After leaving the digital agency, Michael retained my services as a freelancer, and our agreement was that I was to be paid in bitcoin for my hours. I continued a full-time position elsewhere, and worked in the evenings and over weekends for Bitstocks. As they say, when trying to settle debt, you either need to reduce your expenses or increase your income - ideally both! By this point, I had a burning passion for Bitcoin and Bitstocks. It did not take long for me to move over as a full-time employee, despite never meeting Michael or the rest of the team face-to-face. I had come to fully understand the potential of both and appreciated what the innovative technology represented for not only those with the financial status to invest heavily, but probably more so for those with restrictions when it came to financial inclusion.
In South Africa, the vast majority of our people live in poverty-stricken circumstances, way below what is considered the bread line, and the gap between rich and poor continues to widen substantially. We are subject to a government that insists that it is correcting the political injustices of the past, and yet, you need only take a drive on the highway passed the expansive informal settlements to see that there is little that has changed for most. Unemployment remains at exceptionally high levels, which simply exacerbates our hideous levels of crime, substance abuse and human rights violations.
The fact that I was privileged enough to be born into a middle class family, live in a brick home in the suburbs, eat nutritiously balanced meals with access to a decent education, did not make me immune to the perils of the financial system. My advantages in life make it all the more horrendous to imagine the turmoil of those who remain forgotten by the parties they trusted to elect into power and bring about equality. At a grassroots level, this remains to be seen, while our politicians enjoy the benefits of the ‘gravy train’, living lavish lifestyles on bloated salaries, ‘set up’ for life, far removed from the atrocities their most ardent supporters face on a daily basis.
And this, for me, is the most important part.
While Bitstocks may only be accessible to those of a higher financial status than the people I am describing, the reality is that every investment into Bitcoin represents another step closer to bringing financial freedom to those who are not as fortunate. To the millions, no billions, that remain snubbed from formal economic inclusion and the quality of life that provides.
Because of the instantaneous nature of bitcoin transactions there is a school in an impoverished area in South Africa that receives electricity via global donations, quite literally keeping the ‘lights on’ for the next generation of eager learners. This type of functionality has extensive potential to facilitate access to more desperately required resources in a shorter amount of time than what is possible using incumbent platforms or processes.
Because of Bitcoin’s low barrier to entry, those without acceptable identification who are denied bank accounts, are able to accept and transact in bitcoin easily, and without the exorbitant cost implications of dealing with traditional financial institutions.
Because of Bitcoin’s global accessibility, entrepreneurs in South Africa are able to promote and extend their businesses way beyond our borders, without the restrictive, administrative burden of dealing with foreign exchange policies and stifling international money transfer fees.Because of the deflationary characteristic of Bitcoin, we are provided a place to store and hedge our savings (however small they may be to start) against the average of 6,2% inflation experienced over the last year.
Because Bitcoin is decentralised, and therefore decoupled from economic instability or political persuasion, we are somewhat assured that the shenanigans of our ‘Number One’ and band of cronies will not negatively impact on the value of our bitcoin holdings, as it is with a weakening Rand and dwindling buying power with each revelation of alleged involvement in corruption, racketeering, state capture and senseless cabinet reshuffles. (Not to mention blatant misappropriation of taxpayers money for personal gain!)
Because of Bitcoin, many of those like me can expedite their road to financial freedom by leveraging the exploding interest and investment in its technology and increasing value, delivering a far better return than any financial product or service available through traditional facilities today. Thanks to a circa 1,850% increase in value over the last 4 year period, compared to a maximum annual interest rate of 7,5% on a fixed deposit account through a local bank, I was able to settle my debt a year earlier than expected, saving a massive amount on crippling interest, all the while being able to establish an emergency fund and long-term investments too.
Today, I believe a better world is possible.
A world where our late, revered leader Nelson Mandela’s dream of ‘equal opportunity for all’ can be realised. A world where people are truly emancipated from the shackles of reliance on corporate structures, and technologically empowered to create their own destinies. A world where individual financial sovereignty is entirely plausible.
It may not happen this week, next month, in the next decade or even in my lifetime, but I am confident it will.
And I believe this because of how life-changing Bitcoin has been for me personally, and the benevolent gift it is to the citizens of the world