Afghanistan's first recorded bitcoin transaction?

The sun beat down at a blistering 120 degrees in the Helmand desert. The air was dry and tense as the two bitcoin entrepreneurs, Adam Locklin and yours truly, shook hands and made a deal in bitcoin.

A Partagas robusto cigar traded hands, I sent Adam 0.1 BTC, and so concluded what we believe to be Afghanistan’s first recorded bitcoin transaction.

This simple trade comes with a few lessons if bitcoin is really going to work in Afghanistan and other remote parts of the developing world:

Most countries need an exchange

Adam and I were talking to a few local Afghans the other day, and despite their enthusiasm for the new currency, it dawned on me that they had no practical way of obtaining bitcoin. I could personally take Afghanis, or US dollars, and send over the equivalent BTC, but that didn’t seem like a big enough solution to a huge problem.

Afghanistan needs a local presence, whether it be bitcoin dealers in a modified Hawala concept, ATM’s in fixed locations, or Internet exchanges. The local dealer concept could catch on, given the region’s history with informal, trusted, peer-to-peer cash dealing. Most Afghans don’t have regular web access, and make use of public Internet cafes, so I don’t see exchanges like Mt. Gox, or Coinbase, working for the average Afghan just yet. Give it a ceasefire and a decade, and maybe things will change.

Once Afghans have bitcoin they need an easy way to spend it

I have the Blockchain app on my fancy iPhone, while Adam has a practical Roshan phone that works in Afghanistan. The two devices won’t talk to each other, so we still ended up doing a bitcoin-qt wallet computer transaction.

An African company, Kipochi, just released a bitcoin wallet that piggybacks on the popular M-Pesa cellular system already used by over 10 million people in both Africa and India. M-Pesa has already taken the first steps in integrating with the dominant cellular carrier in Afghanistan, Roshan, so it’s just a matter of time before a service like Kipochi hits the market.

When the average Afghan can easily access a bitcoin wallet over a cellular network, the rate of local adoption in this part of the world will accelerate significantly. Include a familiar method of trading Afghanis, or dollars, for BTC, and this could really take off.

Rob Viglione is a physicist turned economic consultant currently living as an expat in Afghanistan. He has earned an MBA in Finance & Marketing, the PMP certification, and is Founder and adviser to several tech start-ups around the world.