Cryptocurrencies are gradually penetrating all corners of the world. The quest for mass adoption is gaining strongly over fiat with massive support from the African continent. Countries like Nigeria, Kenya, Ghana, South Africa, Zimbabwe and Botswana have been leading the way on the African front. There have been reports of large amounts of bitcoins traded on exchanges and traced to African countries. OTC trading is also gaining ground in Africa. Blockchain-based cryptocurrencies could be the fuel of the continent's leap into the future of digital technology.
It is therefore, important for us at this point, to understand the concept of Blockchain and cryptocurrency and how digital assets can boost productivity, finance and investment in Nigeria and Africa.
Simply put, a blockchain is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) is secured and bound to each other using cryptographic principles (i.e. chain). In other words, it is a system in which a record of transactions made in bitcoin or any other cryptocurrency is maintained across several computers that are linked in a peer-to-peer network.
There are many fallacies and myths associated with blockchain. Some of which define Blockchain as Bitcoin. Blockchain is not Bitcoin. This has been a matter of intense confusion because whenever we hear the buzzword “Blockchain” we think of bitcoin. In reality, Bitcoin is the cryptocurrency that is used to make payments and blockchain is the underlying technology made using the combined principles of networking, cryptography and business philosophy. Various cryptocurrencies such as Ethereum, EOS, BPAY and Litecoin flow on top of blockchain technology. Other Blockchain fallacies include:
Blockchain is only meant for techie and finance people
That Blockchain is linked with criminals and fraud
It stores assets: Blockchain doesn’t store assets. It stores the records of the flow of assets across various parties.
By spreading its operations across a network of computers, blockchain allows Bitcoin and other cryptocurrencies to operate without the need of a central authority. This not only reduces risk but also eliminates many of the processing and transaction fees. It also gives those in countries with unstable currencies a more stable currency with more applications and a wider network of individuals and institutions they can do business with, both domestically and internationally (Blockchain is cross-border).
Blockchain also improves accuracy by removing human involvement in verification. Transactions on the blockchain network are approved by a network of thousands or millions of computers. This removes almost all human involvement in the verification process, resulting in less human error and a more accurate record of information.
Blockchain is considered as an indication for the next industrial revolution. It is a growing industry and people with necessary skills are in high demand. Many cryptocurrency projects are looking for qualified individuals with skills in Blockchain Development, Programming, Graphics design, Content writing, UI/UX design, Legal consultation, Project management, Quality engineering and Public speaking. Africa is filled with youths who possess these skill sets but yet, unemployed. Blockchain projects keep sprouting here and there and what this means is that African/Nigerian youths can secure jobs, most of which are remote jobs (can be done from anywhere in the world).
There are numerous data points which testify to the growing demand and salaries for blockchain developers. Glassdoor, a jobs review site, found that demand for blockchain-related jobs since last year increased by 300 percent as compared to the year before. New York accounted for the maximum number of openings in the technology sector followed by San Francisco and San Jose. Chicago and Seattle rounded out the top five. Upwork, a site for freelancers, stated that demand for freelancers with a “blockchain” asset grew by 3,500 percent last year as compared to the year before.
From insurance and real estate to crowdfunding and data management, the potential applications of blockchain technology in Africa are numerous. For instance in Venezuela, where hyperinflation has prompted significant shortages of basic necessities and food, cryptocurrencies could help ease the strain. Given its global usage and the relative ease of cross-border payments and transfers, cryptocurrency has been a viable alternative to an increasingly problematic local fiat money for many Venezuelan citizens. Donations can be made using cryptocurrency and effectively distributed to the affected people. This ensures that funds meant for charity are not diverted.
In 2016, a study of 10 African nations with unusual inflationary ratios, indicated that South Sudan had a huge inflation rate of 295%. Egypt had the lowest rate with 12.30%. High inflation and weak African currencies allow Bitcoin and other cryptocurrencies to offer African consumers a stable store of value and an inflation hedge.
For Paul Domjan, global head of research, analytics and data at investment bank Exotix, emerging nations are the most promising beneficiaries of blockchain tech. He argues that, because "frontier markets in Latin America, Sub-Saharan Africa, and South Asia lag far behind (in the area of ownership recording), with average performance less than half that of the best-performing economies, they are primed for the benefits of blockchain”.
Cryptocurrency trading is a side hustle for many. A lot of traders and investors earn daily from trading on exchanges such as Bitfxt. Profit can be made while trading as well as losses but with the right tools to help you, you can make huge returns. An average Nigerian does not make enough to feed him and his family therefore, an investment in cryptocurrency will definitely assist in reducing the number of bills to pay.
Apart from trading, passive income can be earned from buying and holding tokens, cloud mining, running Masternodes, staking PoS Coins, and referral programs such as we have on Bitfxt. See here. Obviously, opportunities abound in Cryptocurrency and most times, they don’t require as much capital as day jobs.
Health care providers like NiMEDix Ecosystems can leverage blockchain to securely store their patients’ medical records. When a medical record is generated and signed, it can be written into the blockchain, which provides patients with the proof and confidence that the record cannot be changed or lost. These personal health records could be encoded and stored on the blockchain with a private key, so that they are only accessible by certain individuals, thereby ensuring privacy.
Voting with blockchain has the potential to eliminate election fraud and boost voter turnout, as was tested in the Nov. 2018 midterm elections in West Virginia. Each vote would be stored as a block on the blockchain, making them nearly impossible to tamper with. The blockchain protocol would also maintain transparency in the electoral process, reducing the personnel needed to conduct an election and provide officials with instant results.
The traditional Banking system has proven to be ineffective. This infectivity has gone on for years with little or no threat from alternatives. But that isn’t the case as we have it today. The power of Blockchain and cryptocurrency is set to shake up the world of finance with the innovative technologies that are aimed at easing the life of Africans and the entire Blockchain users. These innovations have already been seen in sectors like Health, Youth empowerment, Fintech, Electoral process, and soon, the banking industry will fall in line.
Using blockchain technology, banking services become boundless without the restrictions set on savings accounts and exorbitant transaction charges. You are your own bank. You determine what happens in your account and your money cannot be taken away without permission for things like card maintenance, stamp duty, SMS alert charge and exorbitant transfer charges. Already, we have in place platforms like Bitfxt and Boundlesspay that have successfully provided the African continent a convenient way to bank; buy crypto with fiat, sell, trade, earn and even learn about cryptocurrency through educational packages available on Boundlesspay. Bitfxt offers easy and fast trade, deposit and withdrawal of funds on the exchange as well as a convenient access to utility services such as bill payments, micro-savings, access to loan and a BOUNDLESS ATM Card (available in a few weeks). It is important to note that Bitfxt has the best and most active support team on the Blockchain that works 24/7 to ensure our users receive only the best value for their time.
Africa has a lot to offer Cryptocurrencies because Africa needs an alternative to the weak and unreliable local African fiat money. All products of cryptocurrencies will be well-embraced if promoted in Africa. The current vacuum for alternative means of payment in Africa is obvious. Cryptocurrency is not just the solution to the plight of the “unbanked”, rather, it is a method for allowing economically or politically subjugated populations to control their own wealth. Non-fiat digital currency can bring millions of people into a secure and person-driven global economy. The intangible nature of digital currencies means that a government cannot physically remove the wealth of a citizen just as we’ve seen many Nigerian banks do in recent times. This paradigm shift is a monumental step forward in the social contract, providing an additional layer of security to individuals.
Cryptocurrency is a fast-evolving, complex phenomenon that in my view will have a major impact on power distribution in the global economy and on the African continent. Watch Out!