First of all, what is Blockchain?
According to Blockgeeks.com — “A blockchain is, in the simplest of terms, 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)”. Simple right? To try and put it in simpler terms a blockchain or distributed ledger is a connected string of grouped sets of data. These data sets are added to the string in the order in which they were compiled (time stamped) and replicated on several devices making it very hard to edit or hack (immutable). The groups of data are referred to as blocks and are identified and stored using complex mathematical equations (cryptographic principles)
For those unsatisfied with these definitions or simply curious about what distributed ledger technology is here is an excellent video on the topic by Simply Explained Savjee and here is a link to Investopedia where they cover a lot of aspects of it quite well.
Is this too techy for Africa?
As has been broadcast and time and time again we are in the midst of the fourth industrial revolution and it is this technological revolution that is Africa’s best shot at prosperity. As Cathy Smith points out in her article for the World Economic Forum, these technologies like AI, Big Data Science and Blockchain are readily applicable to a wide range of sectors key in Africa’s development such as agriculture, healthcare, and better governance. She further goes on to state
“We know Africa suffers from a massive infrastructure deficit. But the beauty of 4IR’s technologies is that you don’t need big legacy systems and programs in place to start rolling them out. We’re already seeing numerous case studies and examples of how developing countries can move quickly to new digital approaches that can transform public service delivery in critical areas like farming, healthcare, and education”
What she is talking about is technological leapfrogging, where society chooses to jump to modern technology rather than continue with antiquated systems. In Africa, this happened with the advent of email and is why many homes do not have a p.o box or mail routing physical address. It is also why many children today have never seen payphones because of the jump to mobile phones.
So now that we have established that blockchain is here and can be readily adopted by Africa, the next question is why should the continent embrace it?
Key tenets of distributed ledger technology are its ability to resist editing and tampering with information and transactions. On top of that many blockchains are public and even the private blockchains are easy to audit. This provides a solution to improve transparency in both the public and private sector, something that is greatly needed as evidenced by how poorly many African countries place in international transparency rankings
The consensus systems built into blockchain architecture allow for the development of “trustless environments” where trust is distributed among the members of a chain. This removes the need for trusted 3rd parties from process flows and making it easier for the necessary information to be shared and authenticated speeding up transactions and business operations
Blockchain is a fairly new industry globally, this means it’s still possible for African countries and businesses to become world leaders in this space. Furthermore, as Binance CEO Changpeng Zhao points out in his article Benefits of Crypto Part 1 — to Countries on LinkedIn the blockchain industry brings with it international investments, creates a draw for talent, creates jobs locally, and increased tax revenues for countries thus spurring economic growth. Going further to say;
“With more crypto business booming in one area, they will build a local culture that is crypto-friendly and crypto advanced. This is similar to the startup culture in San Francisco, financial culture in New York, etc. With this culture built, it will help to shape the local economy, to be a world-leading one. Early adopters could realize trillions of dollars in benefits compared to late adopters.” — Chanpeng Zhao
Due to the underlying technology on which distributed-ledgers have been built- the internet- blockchain businesses and solutions can not only scale massively and rapidly but are to a degree, global. This is what we believe makes blockchain a unique avenue through which African businesses on the continent can get access to global liquidity.
One of the most exciting prospects for that blockchain has on offer for us at Utilis Ventures is an opportunity for us to build our financial own services born out of and serving the African continent and have technology and service independence from the western controlled financial systems we live in today. This independence will help give African countries level footing when negotiating internationally.
There are millions of other great use cases for blockchain in Africa, ranging from the artistic — the building of a record of African history and stories so complete and fireproof that the Library of Alexandria would be in awe, to the academic — building a platform to verify certificates of higher learning. No matter your passion now is the time for Africa to embrace the blockchain.
We invite you to follow us on our Twitter where we will keep you posted on the work we and others are doing in the blockchain for finance, and emerging technology spaces.