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While Bitcoin Faces Resistance, Blockchain Adoption Soars in Kenya

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While the Central Bank of Kenya (CBK) continues to hamper the adoption of bitcoin, blockchain technology is increasingly gaining traction in both the public and private sectors in Kenya ranging from the transport, security, and health sector to the insurance industry.

The blockchain is a digital ledger that allows for the incorruptible exchange of data without the need for a middleman. Although the blockchain technology was originally created for bitcoin, the world’s first digital currency, the technology is now finding more uses from the tech community.

Blockchain technology has also allowed for the creation of other digital currencies such as the recently launched bitcoin cash but can also be used for much wider applications than purely financial transactions.

Kenyan Industries Are Being Revolutionised By Blockchain Technology

The National Transport and Safety Authority (NTSA) disclosed that in a month’s time it will be mandatory for Kenyan motorists to have electronic stickers for their motor vehicles. The electronic motor identification service will ensure that all drivers have the stickers on the windscreens of their cars and will be detected by use of special gadgets. This move will help in the recovery of stolen motor vehicles and rid the Kenyan roads of old cars.

The said e-service from NTSA will operate on a shared blockchain platform that will link key state agencies like the Kenya Police and the Kenya Revenue Authority. This will allow for the sharing of critical information thus alerting officers about a vehicle’s ownership, inspection, and insurance status.

The Health and Security Sectors

Kenya’s health sector is making use of the technology that will see the installation of a smart platform that will enable all the 98 public hospitals to monitor important patient data such as a patient’s health history as well as for the use of public health and hospital management.

The programme that is being streamlined by Kenya’s Seven Seas Technology in collaboration with Japan’s Toyota Shusho will eradicate the manual re-write of patients’ health history that has always been the norm in Kenyan hospitals.

Furthermore, the blockchain-driven platform will drive the creation of a professional hub for the medical practitioners. The online shared hub will serve the purpose of information sharing that will allow for nurses in remote health locations to get advice on treatment procedures from doctors based in different areas.

Specialised treatment services will undergo a complete revamp as X-rays and Magnetic Resonance Imaging (MRI) diagnostics will be performed centrally. This will help cut costs for various hospitals and health institutions as specialised doctors in certain medical fields will be able to remotely diagnose and treat different ailments using the imaging results sent to them.

The platform, built on the blockchain technology, will also allow for the scrutiny of diagnostic notes made by doctors. In return, this will help diminish the number of wrong diagnoses made.

In the security sector, the government – through the Ministry of Interior & Coordination of National Government – is working to link the database of the National Registration of Persons Bureau with that of the manned Closed-Circuit Television (CCTV) Cameras by the Kenya Police that are installed in both Nairobi and Mombasa to allow for immediate face recognition using the blockchain technology.

The Insurance Sector

America Insurance Group (AIG) partnered with banking group Standard Chartered to run a pilot using blockchain technology where it ran cover offers for their policy holders across America, Kenya, and Singapore. The pilot saw the two companies attend and process real-time payments for their clients on a unified platform that linked their agents and financial institutions.

Payments were made on time and policy renewals happened automatically once premium payments had been received. The two companies stated that the use of the blockchain technology to process payments would eradicate the need for physical company set ups in the said regions thus helping cut on expenditure.

BitPesa, Kenya’s first blockchain technology startup, which to date has raised more than $10 million USD to allow for its expansion to other markets, stated that use of digital currencies in transactions was more favoured by large companies with local subsidiaries as it saves them the hefty and costly transfer fees incurred when making international payments through the local Kenyan banks.

Resistance from the Financial Industry and the Central Bank

Although the technology is getting recognition and its use is being utilised in various sectors, the financial industry in Kenya continues to resist its adoption citing fear of criminal related activities as the reason.

The CBK’s governor, Patrick Njoroge, has been on record issuing a warning in the use and adoption of the digital currency saying that bitcoins operations are done on decentralised systems that could make Kenyans an easy target for online fraudsters.

Ally-Khan Satchu, a financial markets consultant, in an interview with Daily Nation, however, suggested that the Kenyan government review its stand on bitcoin and the use of the blockchain technology as it can no longer be disregarded as a mode of transaction.

Satchu stated: “Essentially blockchain platform payments and crypto currencies are being mainstreamed and that is why we have been seeing the material share price appreciation of leading blockchain platform provider bitcoin.”

As the head of Rich Management Services, Mr. Satchu stated that Kenyans need to be made aware on the functionalities and modalities of digital currencies so that they can take part in investment opportunities that blockchain technologies provide.

He added, “The Kenyan investor has certainly internalised the cryptocurrency universe. I think we need to review our regulatory stance and seek a way to carve out ahead of the curve position commensurate with our mobile money leadership.”

Blockchain Technology

mCoin: An Inclusive Cryptocurrency That Can Be Accessed Without Internet

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The London-based technology company ONEm is launching mCoin, a new cryptocurrency that can be accessed outside the scope of the Internet. The digital currency aims to reach billions of people around the globe through offline channels, such as mobile phones, and is powered by ONEm’s global and scalable platform.

An Offline Cryptocurrency

mCoinONEm‘s mCoin is a digital currency that is based on the original bitcoin blockchain. What makes it unique, however, is that it will allow people with limited or no access to the Internet to take advantage of blockchain services. Users can open SMS virtual wallets where they can store, send or receive mCoins offline using a mobile phone. The cryptocurrency can be traded through SMS messages or USSD codes which is fairly uncomplicated when compared to online trading on peer-to-peer exchanges, according to the company.

Since users will be accessing mCoin offline, they can enjoy an extra layer of security against threats of hacking and malware. In addition, the cryptocurrency will be integrated to existing ONEm social and business applications like Sweb, Market Place, mCatalogue just to name a few, which rely on Internet, SMS or Voice messages. However, the biggest innovation would be the ability of people to mine mCoins offline.

Mining is is the process through which network participants contribute their computing power to verify and process transactions on a cryptocurrency network. Mining is necessary to keep the network secure and operational. For their service, miners are rewarded with new coins for their effort. This is usually done online through specialized mining hardware or in the case of some coins, through CPU’s. mCoin operators plan to roll out ‘pseudo-mining’, which is a proof of work that enables people to earn coins through activities they perform on the ONEm platform.

ONEm’s African Focus

Founded in 2012, ONEm is a technology company that has developed a platform that provides interactive access to information and content through SMS and voice. The company aims to establish its presence in Africa by solving some of the common challenges faced in the continent. These include connecting people who have no access to financial services, providing information sharing services that have previously been out of the reach of many, and improving the user experience when accessing digital services.

Since SMS is a standard feature for nearly all mobile devices, mCoin expects to scale rapidly through a large volume of users and leveraging strategic partnerships. The platform has partnered with Mobile Network Operators (MNOs) in Africa to deliver interactive SMS and Voice services that can allow people to access news, podcasts, and information by simply typing a shortcode. Small enterprises can benefit from a digital currency that allows them to access new markets and an easier way to receive payments.

In addition, users can use mCoin to participate in loyalty and purchasing schemes in the ecosystem without the need for a smartphone, just a simple text or audio message. Interestingly, African governments and local organisations can make use of mCoin’s underlying SMS accessible blockchain technology to provide valuable services for people who may not have access to online services.

Christopher Richardson, the CEO of ONEm states in press release,

“It is exciting to see so many people who share in our vision for an inclusive Cryptocurrency outside of the domain of the Internet. People from all over the world are participating in mCoin Pre ICO and taking advantage of the attractive bonus packages now available as they see tremendous high growth potential of a cryptocurrency that can reach this very big un-tapped market”

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Interpol and VoguePay to Launch Blockchain-based Crime Control Platform in Nigeria

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Online payments provider VoguePay and the International Criminal Police Organisation (Interpol) are set to launch a blockchain-based crime control platform in Nigeria.

Crime Control on the Blockchain

The crime control platform, which will be called interPort, will obtain information and manage stakeholder involvement and crime reporting.

“The partnership with VoguePay will help the agency to increase the safety of Nigerians, and to protect the economy while enabling citizens and businesses to comfortably embrace available technologies to grow their businesses, increase their profits, and create more jobs,” Interpol Commissioner of Police in Nigeria, Olushola K. Subair, stated.

Thanks to its experience in payments security and blockchain implementation, VoguePay will enable Interpol to increase citizen engagement and cooperation with partner networks to curb crime in Nigeria.

“Blockchain technology is the next evolution in identity management and that by leveraging it, Interpol is now better positioned to offer cross-agency data and biometric management,” Michael Simeon, CEO VoguePay, said.

Crime in Nigeria

Criminal activities in Nigeria range from kidnappings and robberies to contract killings and terrorism.

The Nigeria 2017 Crime & Safety Report by the Overseas Security Advisory Council (OSAC) states: “Crime is a risk throughout the country with significant terrorism threats, especially in northern Nigeria. Boko Haram is suspected of or has claimed responsibility for most of the terrorist activity in Nigeria.”

For instance, the Lagos State and Federal Capital Territory recorded a total of 58,566 crimes in 2016. With such high crime levels, the partnership between Interpol and VoguePay could be a step in the right direction to make Nigerians feel more assured that perpetrators will be caught and charged for their crimes.

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Blockchain Technology

Kenya’s Capital Markets Authority Issued Warning Against Initial Coin Offerings

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Kenya’s Capital Markets Authority has issued a public warning against initial coin offerings (ICOs) in an attempt to warn Kenyans about the risks involved in investing in newly issued digital tokens.

“It is notified for general information that the CMA has not as of this date, approved any initial coin offering. The ongoing offerings are unregulated and speculative investments with considerable risk to the investor […] ,” the notice reads.

The risks cited by the CMA include a heightened potential for fraud, cross-border distribution risks, information asymmetry, and liquidity risks.

Currently, two Kenya-based cryptocurrency projects that are conducting ICOs include Nurucoin and UwezuCoin. Both, however, have been criticized by members of the local cryptocurrency community and it is unlikely that these projects will raise a notable amount of funds during their token sales.

It is also important to note that the current regulatory environment in Kenya is – for the most part – anti-cryptocurrencies but very much pro-blockchain. This is also reflected in the CMA’s statement, which says:

“CMA is cognisant of the importance of FinTech and the benefits that can be derived from leveraging blockchain technology and is willing to work with interested parties through the already established Sand Box model for purposes of supporting innovative FinTech products in a controlled and safe environment.”

The most prominent African token sale to date has been the SureRemit ICO, which managed raised over $7 million for the non-cash remittance platform. In 2018, several African blockchain startups are expected to launch token sales to fund their operations. Whether the Kenyan financial regulator’s warning will deter Kenyans from investing in these ICOs remains to be seen.

For investors, it is extremely important to conduct thorough research into a blockchain project before investing any funds as the barriers to entry for launching a token sale are extremely low and there are many scammers out there looking to prey on newcomers to the crypto asset investment space.

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