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Electricity. Powered By Bitcoin!

Michael Hudson
23 March 2016

Electricity. It’s a utility that most of us, in developed countries, take for granted. We walk into our home, flick a switch and the lights come on. We go to our fridge, pour a nice cold drink and then settle on our comfortable sofa and tune into our favourite television show with a microwave dinner heated to perfection. All of this possible because of a reliable, affordable power provider. And a payment system that charges in arrears.

Some 8,000 miles away, on the outskirts of Johannesburg, South Africa, this isn’t the case.  There, electricity is not only scarce – it’s excruciatingly costly as well. People are forced into pre-paying for electricity using meters implemented by third parties, acting as middlemen between end users and the parastatal power supplier. (And naturally adding costs for the consumer’s account in the process.) Payment needs to happen at a retailer with the necessary infrastructure to be able to provide a voucher code for the customer to input in his meter at home and be credited with the applicable credits for the amount paid.

Forget to buy sufficient units to make it through the night or week, and your power goes out. As simple as that.  There’s no shop around the corner open at all hours to purchase more, and electronic or mobile recharge options are not open to the general majority of the population, who struggle to even open a bank account.

But this can be changed, thanks to the innovation of a Johannesburg-based blockchain startup called Bankymoon and bitcoin.

Bitcoin Enabled Electricity Smart Meters

Bankymoon engineered electricity smart meters that accept several cryptocurrencies, including bitcoin, as payment. While on the ground they still face challenges in educating consumers about the benefits and usage of bitcoin, they’ve extended their offering to highlight the powerful philanthropic potential of Bitcoin when combined with this type of technology.

In late February, at a presentation hosted by the non-profit MIT Enterprise Forum, the CEO of Bankymoon, Lorien Gamaroff (via Skype from Johannesburg) and Ewald Hesse, CEO of Grid Singularity, based in Boston demonstrated the power of Usizo, a crowdfunding social project connecting international donors with selective schools in South Africa in desperate need of assistance when it comes to, quite literally, keeping the lights on. (Usizo means "help" in Zulu, one of South Africa's 11 official languages.) 

Stationed at Emaweni Primary School in Soweto, South Africa, Gamaroff – and an eager gathering of students and teachers (despite being in the middle of the night) – waited patiently as Hesse transferred 1 BTC through to the electricity meter’s bitcoin wallet address, and then cheered with delight as the transaction was confirmed on the blockchain and electricity was restored. Incidentally, 1 BTC can keep the school running for approximately 3 weeks, ensuring students are receiving an education in a more comfortable environment.

It’s a story like this that highlights the deep-seated power of bitcoin and reaffirms my belief in it being the most philanthropic investment we’ve seen in our lifetime. Had any other currency or method of transfer been used for this particular purpose, the results would most certainly not been as instantaneous, nor would the school in question have benefitted from the ‘full donation’.

While through no fault of their own, any intermediary or fundraising organisation is going to attract processing and management fees, leaving only a percentage of any charitable gift landing in the hands of the beneficiaries. Gamaroff and Hesse’s display showed how, when using bitcoin, we can circumvent these costs and deliver maximum, and instant, impact for those in need.  

Potent philanthropy indeed. Helping light up deepest, darkest Africa, one school at a time.

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