Does Africa’s Future Lie in Blockchain Technology?: Image: Adobe Stock
With blockchain, even people who don’t trust each other can use it as a trustworthy central authority that cannot be corrupted or manipulated
Does Africa’s Future Lie in Blockchain Technology?: Image: Adobe Stock
For decades, the bulk of countries across the African continent have been part of the impoverished global south. Often defined by war, corruption, and extreme poverty levels, the question of how to help Africa advance and take their place among the first-world nations of the world has been asked by countless people inside and outside of Africa for a long time.
But since the birth of cryptocurrency in 2009, many Africans have successfully used digital currencies and the decentralised blockchain technology that they’re based on to better their lives, escape poverty, and overcome the common barriers they often face when it comes to things like opening a bank account and moving money across borders. Did you know that 57 per cent of Africans are unbanked and don’t own a bank account? Crazy, right?
Between 2021 and 2022, funding for blockchain projects across Africa surged from just over $5 million to $91 million. The reasons for this boom are the lack of conventional banks we’re used to in the west and a huge population of over 1.216 billion (most of whom are unbanked, as mentioned above).
Despite being a relatively new technology, blockchain is booming across Africa and increasingly becoming a staple technology for many everyday Africans. Many are comparing the surge in blockchain to the rise of the internet in Africa in the 1990s and the many opportunities that came with it.
In particular, blockchain and crypto have become hugely popular across Sub-Saharan Africa in countries such as Nigeria, South Africa, Kenya, and Ghana. These nations have witnessed a fast rise in people being able to access cryptocurrency and flawlessly pay for it using blockchain technology.
In a similar view that the rise of Artificial Intelligence (AI) is viewed, many people around the world have allowed the positively disruptive qualities of blockchain technology and been fascinated by how fast it’s been adapted to Africa and included in vast swathes of society there.
The simplest way to explain blockchain is as a decentralised digital ledger that operates cryptographic algorithms to affirm the creation and transfer of digitally characterised data over a peer-to-peer network. It’s unbiased and exceptionally trustworthy.
With blockchain, even people who don’t trust each other can use it as a trustworthy central authority that cannot be corrupted or manipulated. So, naturally, it can play a huge role in various facets of African society. One that is often marred by state-level corruption.
There are 54 countries in Africa, most of which have their own national currencies. For decades, the idea of a common currency that could be used across the entire continent has been a nightmarish process because various factions hold different levels of political power and interference from old colonial powers.
To put it bluntly, forming a common alliance in Africa is a long and challenging process due to the various divides, cultural differences, and prior or ongoing wars and conflicts. But with blockchain, the solution could be very close.
The recent establishment of the African Continental Free Trade Area (AfCTA) aims to unite more than 1.3 billion individuals with a merged gross domestic product (GDP) worth more than $3.4 trillion. The idea of AfCTA is to bring together African people from across the continent and disregard any quarrels stemming from their political and religious beliefs.
Many countries across modern Africa are being held back from joining the ranks of first-world nations by a myriad of problems ranging from corruption and a lack of basic healthcare to the absence of mechanised farming, war, poverty, and unemployment, to name just a few.
In other countries worldwide, blockchain technology has already been utilised to an extremely effective degree to overhaul industries ranging from farming and aviation to tourism and even national defence. In Africa, it could potentially revolutionise the conventional African systems, bureaucracy, and administration that many Africans are dissatisfied with and distrustful of.
In addition, blockchain could also have the potential to form a bond between African countries that currently have a cold relationship with one another, thus forming a feeling of unity and assisting with the formation of free trade agreements via regional currencies, thus promoting intra-continental trade in turn.
And it’s not just me who thinks so. The boom in blockchain and crypto adoption across the continent is a testament to how many Africans feel the same. In particular, the surge in the value of cryptocurrencies in 2021 brought the attention of many Africans to the world of crypto. Eventually, it led to countless people and businesses beginning to invest in it and the groundbreaking blockchain technology that cryptocurrencies are founded.
Sadly, as with any new technology, some Africans were caught off guard in their initial investing stage and ended up using scam platforms that ripped them off. If you feel unsure you might end up in a similar situation, do not worry! We have a number of recommendations for platforms that will not only keep you safe but allow you to upscale your trading journey. A perfect example is BitcoinUp, a combination of data protection and valuable trading tools
Many experts predict that this is no fad and that the interest and widespread adoption of crypto across Africa will be a defining feature of the continent for a long time into the future.
Whilst we’ve talked about the impact of everyday Africans investing in blockchain-based cryptocurrencies, it’s time to talk about the major businesses that equally utilised the groundbreaking technology across the African continent.
Most interestingly, an increasing number of banking and financial companies across Africa are becoming more decentralised, such as:
All of these banks have taken steps to develop and use an encrypted, secure, distributed database. Those private and not public banks use a private blockchain, whereas the latter use a public one.
And whilst all of these banks are from South Africa, it’s one of the most developed countries on the continent; there are also some solid examples from other African countries like Kenya. Just take the introduction of BitPese, for example.
Bitepese, a money remittance platform that converts cryptocurrencies like Ethereum and Bitcoin to the local African currency without requiring intermediaries or third parties, is rapidly becoming popular across Kenya.
Plus, Kenya has recently made use of a blockchain-based smart platform for the country’s healthcare sector. This allows all Kenyan hospitals to utilise a hub that monitors data like the use of public resources and hospital management, thus fighting corruption and streamlined interconnectivity between different hospitals.
A joint Bahamian and Kenyan firm called BlockchainRaise took advantage of blockchain to develop the first security token platform to tokenise assets quickly and securely. The tokenisation process sees physical assets transformed into digital assets on the blockchain. The process makes it streamlined and flawless to protect and maintain accurate records of real estate ownership, titles, commodities and more.
And in Nigeria, there are plans for a national digital currency called eNaira, and the country has drafted in experts from Bitt Inc. to develop it properly.
Rwanda has also developed a decentralised project in the land development side of the country. It’s called Bitland, and it utilises the Ethereum blockchain to safeguard land ownership by making land details available to the Rwandan public. Rwanda has also seen successful partnerships with the likes of Wisekey and Microsoft, both giant companies that are keen on forming blockchain-based initiatives in the country.
In Ethiopia, the national minister for education recently announced that the country would form a blockchain-based database to securely and accurately store school students’ identities and keep track of their academic performance.
And last but least, the Central Africa Republic actually made Bitcoin a form of legal tender across the country. Amazingly, the CAR made history by becoming the world’s second country to do so after El Salvador.
Regarding global crypto markets, Africa is in third place regarding those which are growing at the fastest rate, and it’s having no issues attracting major investors from around the world.
Today, Africa is the third fastest-growing cryptocurrency market globally, steadily attracting large investments.
As I mentioned at the beginning of this article, the funding for blockchain startups and projects across Africa surged from just over $5 million to $91 million. Most funding goes to countries like Nigeria, Kenya, South Africa and Seychelles.
But from all the funds raised, the majority is going towards startups and businesses in the Fintech sector, accounting for around 53 per cent of all blockchain-related funding. Here are some examples:
There has also been a boom in the spread of mobile tech across Africa, which has thus led to a surge in the use of digital payment systems. More than 450 million Africans don’t have a bank account, so the blockchain can make a tremendous change by providing an unrivalled and unseen level of financial inclusion across the continent.
Peer-to-peer platforms like Paxful and Localbitcoins are solid examples of blockchain-based technologies that allow millions of ordinary Africans to gain access to a huge range of financial services they would never have been able to use.
The adoption of mobile technology, the chance to access the global banking system and escape poverty, and a generally tech-savvy population across the continent have made Africa an ideal territory for adopting blockchain and cryptocurrencies.
Plus, as the global financial markets become increasingly unstable, more people in Africa are increasingly turning to blockchain-based cryptocurrencies to become financially secure.
The proliferation of blockchain-based technologies and companies across Africa shows us that this is a continent on which any crypto enthusiast should keep an eye because Africa’s future could indeed lie with blockchain.
ALSO READ: Zimbabwean embassy address on the expiry of the ZEP