Kenya's Digital Payments System Is Lapping Bitcoin Many Times Over

Last month, we talked about the difficulties mobile payment systems have experienced in breaking into emerging markets, and why the challenge for Bitcoin penetration would thus seem to be even greater. Despite a seemingly massive opportunity, customers or bank regulators in Africa and Asia have thrown up resistance to tools that would upend at-times centuries-old transaction practices.

Now, Tim Swanson of the Of Numbers blog has posted a chart that further demonstrates Bitcoin's sluggish adoption. It shows worldwide transaction volumes of the digital currency compared with those in M-Pesa, Kenya's cellphone-based banking system and the so-far lone success story among emerging-market mobile payments processors.

Despite its global reach, Bitcoin flows now pale in comparison to those among Kenya's 45 million people over the course of their six-odd years in existence.

You could argue this is not a fair comparison. Bitcoin was started in the functional equivalent of a guy's basement, with angel and VC investment only taking off in the past year. M-Pesa had from Day 1 the backing of a telecom conglomerate, Vodafone.

Even so, M-Pesa had about a 12-month period of growing pains, yet is now the medium through which 43% of Kenyan GDP passes.

Swanson says he's not suggesting Bitcoin is dead in the water. Instead, he writes, "I think that once the hype and hyperbole is dispensed of, the underlying tech (especially the "2.0" variety) is clever and potentially transformative later this decade for certain segments."

But he still goes in hard. "Bitcoins are not currently fulfilling the role of both a store of value and a medium of exchange...If one builds a tool that has few immediate uses besides gambling then it should not be surprising that mostly gamblers use it," Swanson writes.

The Bitcoin community likes to say it is playing a very long game. But it sure could use a jolt from somewhere.