Using Bitcoin To Send Money To Your Brother In Uganda Would Be Awesome, If It Actually Worked

Earlier this week, many in the Bitcoin community got very excited about a short film that demonstrates a promising use for Bitcoin. Ronah, a Ugandan woman who emigrated to Brookline, Massachusetts in 2011, regularly sends tuition money to her 20-year-old brother, Ronald, who is studying accounting and finance in Kampala. She used to send it via MoneyGram, a Western Union-type service, but hated how long it took and the exorbitant fees they charged. She and her husband say sending $40 costs $10, which is, you know, crazy.
“This is why I bought the first bitcoins,” says her husband in the film made by documentarians at Bitcoinfilm.org. “To see if I could send money to her brother.”
And it works beautifully in the video. Ronald sets up a bitcoin wallet. They send money to him instantly and he finds someone to take his bitcoin in exchange for Uganda shillings. This is the beauty of a financial system not dependent on third-party intermediaries….
Except it is still a system dependent on intermediaries. Until every business takes bitcoin, people need to change their bitcoin into the local currency. I checked up with Ronald by Facebook to see how that’s going, and it turns out that it’s not going so well.

The short documentary breezes over who helps Ronald exchange his BTC for shillings. “It was a guy, downtown doing mobile money business,” says Ronald by Facebook. He sold bitcoin to the guy twice. “Though after a couple of days, I went back to the same guy but I found he had closed. Then this girl who used to work with him told me he had better things to do and that he did not have a lot of customers. And the lady told me he used part of the employer’s money in his bitcoin deals and when the boss [realized] that the guy was using his money in his personal deals, he fired him.”
So now Ronald’s one exchange is out of business. Ronald still has some Bitcoin but he can’t turn them into dollars. So it’s basically the useless currency that many used to accuse it of being in the U.S. “I hope with time I will find a way of exchanging the bitcoin I was left with to cash,” he says.
Bitcoin still has a lot of growing to do until it can be used in this promising way. Because if no one in your town takes Bitcoin and if there’s only one guy in your town exchanging Bitcoin for regular cash, he can gouge you worse than MoneyGram or just disappear all together.