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How African Economies Can Benefit From Blockchain Technology

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African economies blockchain technology

An economy is only as good as its gross domestic product (GDP), political climate, and technological development. In many parts of Africa, these three factors are left wanting. Most African economies have low GDPs, unstable political systems, and limited internet coverage. Fortunately, the blockchain provides a technological solution that can help to improve African economies.

According to a report by Standard Media, a simulation carried out by IBM found that blockchain adoption in the economies of South Africa, Kenya, and Nigeria could lead to lower prices, improved real GDP and fiscal balances across every country.

Improved Import and Export Trading

The benefits of blockchain technology in import and export trading are plentiful. The blockchain can enhance customs control, decrease theft, and improve payments to suppliers.

According to City Press: “Banks […] still issue letters of credit to importers, a practice that has remained virtually unchanged for 700 years since its origin in medieval Italy.”

The blockchain can eradicate this issue by creating trust. Intermediaries can be eliminated and the costs of transactions decrease. The blockchain also offers faster trading between businesses, provides real-time data of goods moving in and out of a country, and eliminates barriers such as cross-border regulations, fraud, and customs delays. When all the friction that works against trading is removed, the GDP of an economy will improve as a result.

Perhaps the biggest winners from blockchain-based trading systems will be SMEs. SMEs often have limited financial abilities to cover high trading costs and long transaction processes. The blockchain can get rid of these issues by making it easier for SMEs to export or import products.

Increased Financial Inclusion

Africa has a large unbanked population. According to 2014 World Bank statistics, only about 30 percent of the population in Sub-Saharan Africa have bank accounts. Some of the reasons why so many individuals are unbanked include poverty, lack of documentation, and inaccessible financial institutions.

Luckily, the blockchain has the potential to increase financial inclusion by formalising property such as land. It is not uncommon to find Africans with large pieces of land living in poverty. By formalising this land using blockchain technology, the landowner receives legal protection and a sense of trust. That means that any transaction concerning the piece of land is accessible and cannot be interfered with. Perhaps most importantly, the landowner can use the land as collateral for a loan to develop the land and hence get himself/herself out of the impoverished situation. A company like Land LayBy, for example, is making strides towards applying blockchain technology to the real estate sector in Kenya and Ghana.

The blockchain can increase financial inclusion which in turn increases the spending and investing power of those who were previously unbanked.

Better Delivery of Services by Financial Institutions

A study by the Cambridge Centre for Alternative Finance indicates that 30 percent of distributed ledger technology (DLT) use cases fall under banking and financial services. The study, for instance, found that possible DLT applications that central banks are investigating are the issuance of digital currencies, records management, audit trail, and payments.

On the other hand, a study by Accenture found that banks can save about $10 billion by applying blockchain in clearing and settlements. In Africa, banks refrain from setting up in remote areas due to operational costs concerns. However, by saving on clearing and settlement costs, banks in Africa might be able to afford to reach the unbanked population.

The blockchain has the ability to improve the process of updating customer records and providing digital identities to those without documentation papers. As a result, refugees, for example, could easily access financial services and contribute to the economy of a host country.

Faster Remittances

Remittances play a crucial role in African economies by indirectly contributing to the GDP. Sending remittances through a blockchain-based system takes a shorter time than using conventional money transfer operators such as Western Union.

Additionally, the blockchain eliminates third parties and consequently eliminates extra transaction fees. As a result, more money can come into the continent once blockchain-based remittances are being embraced by the general public.

Transparent Spending of National Expenditure

Money allocated to ministries and various departments in government often goes missing due to corruption. Consequently, projects that need implementation are often postponed to an undefined time period. In addition, potential job opportunities that could have been created are lost. Inquiry committees that are created to find the culprits often provide zero results.

A blockchain-based system that allows all stakeholders to view how the taxpayer’s money is spent might go a long way in providing transparency in state financial matters. In fact, such a system might be improved further by giving the taxpayer a degree of decision making power when it comes to how much to allocate to every sector and which remuneration cuts should be made in order to bridge budget gaps.

 

Currently, blockchain startups, governments, and financial institutions are still experimenting with the possible use cases for this technology. Blockchain adoption will not happen overnight in Africa but over the coming years, it will be no surprise to see more blockchain-based systems in place in both the public and private sector that will benefit African economies. 

Blockchain Technology

Blockchain Game Gods Unchained Secures New Game Director and Introduces Debit Card Payments

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Blockchain Game Gods Unchained
Image by godsunchained.com

Blockchain card game Gods Unchained has added Magic: The Gathering Arena Game Director Chris Clay to its team and introduced debit card payments. These two decisions aim to drive the game closer to mainstream appeal.

Experience and Achievements

Clay’s experience of more than 20 years in design and game development will be valuable to his new position as game director at Gods Unchained. His task entails prioritising visual designs, new features, and supporting community experience.

In his previous role at MTG Arena, Clay brought on-board three million active players and more than one billion games were played. According to a report by Dot Esports, MTGA – a digital collectible free-to-play card game published by Wizards of the Coast – grossed around $225 million.

Currently, Gods Unchained is the top-selling blockchain game of the year and with Clay’s help, the game could reach greater heights and attract traditional players.

“I believe blockchain represents a new frontier for game developers. Digital asset ownership on the blockchain lets developers support games and their communities in ways we have never seen before in electronic gaming. […] Blockchain is not just for digital currency; it is laying the foundation for a whole new digital economy,” Clay explained.

Game Payments

As an Ethereum-based esports game, Gods Unchained has been allowing its community to purchase booster packs using ether. Users now have an alternative payments option of debit cards. This move could help the game to reach a wider audience by appealing to traditional players.

“To date, blockchain games have provided a niche group of individuals a fun and experimental game ecosystem of NFTs. But now is the time for mainstream adoption. We need these games to show value, and we do not want ‘blockchain’ to sit as just another buzzword. Gods Unchained will become a game that any person can play, regardless of their blockchain familiarity. And the fun of the game will not be predicated on the underlying tech,” stated Gods Unchained co-founder Robbie Ferguson.

In a press release, Gods Unchained announced the rebranding of Fuel Games to Immutable. Immutable is the creator behind Gods Unchained.

Last month, Gods Unchained launched its beta version enabling more players to experience blockchain-based gaming. The game also debuted its gameplay trailer in 2018.

If you are into blockchain gaming, check out our guide to the best blockchain games in 2019.

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Kenya’s Blockchain Taskforce Releases DLT Implementation Strategy for Kenya

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Kenya Blockchain Report

Kenya’s Blockchain and AI Taskforce released its first report to the public since the ICT Cabinet Secretary Joe Mucheru launched the body in 2018. The report depicts an implementation strategy for the adoption of these two emerging technologies that will steer Kenya to the fourth industrial revolution.

Implementation Strategy

Kenya Blockchain ReportThe report, titled Emerging Technologies for Kenya: Exploration & Analysis, has stipulated an implementation strategy based on blockchain technology and AI that will solve challenges such as financial exclusion, corruption, high public debt, inefficient public service delivery, food insecurity, and high transaction costs.

Furthermore, the report will guide the government in attaining the Big Four Agenda, which encompasses affordable housing, food security, manufacturing, and healthcare.

The Chairman of the taskforce, Bitange Ndemo stated: “I am confident that this report will guide policymakers in their efforts to stimulate an efficient and resilient economy with respect to the digital transformational technologies, especially with the realisation of the Big Four Agenda.”

Some of the implementation strategies are as follows:

  • Digital Asset Framework

The Blockchain and AI Taskforce has proposed a digital asset framework that will guide companies wishing to list a cryptocurrency on an exchange. According to the report, the Capital Markets Authority (CMA) is looking into how to regulate initial coin offerings (ICOs) by using the authority’s legal framework and the forthcoming regulatory sandbox.

The digital asset framework is meant to help small and medium-sized enterprises that are unable to raise capital through IPOs to have the alternative of using token sales.

  • Digital Currency

The taskforce had earlier announced its proposal for a Central Bank Digital Currency (CBDC), which would facilitate financial inclusion and low-cost transactions.

With 90 percent of Kenyans already using mobile money, credit cards, and bank transfers to make transactions, adding a CBDC to the existing digital economy could be a seamless process.

To introduce a digital currency in Kenya, the taskforce acknowledges that the country first requires a regulatory sandbox and the tokenisation of government fiscal operations.

  • Tokenisation

Another proposed strategy is the tokenisation of the economy which could help to solve unemployment issues. The unemployment rate in Kenya is one of the highest in the world and the taskforce envisions a platform where work is exchanged for tokens to tackle this issue. Service providers will use the platform to build a work marketplace, store data, and manage transactions.

The Ajira Program, an initiative created to enable more Kenyans to work online, will adopt this proposed strategy. Using the Ethereum platform, Ajira will offer inter-person and inter-service settlements and payments. The initial stage of creating the Ajira platform is ongoing. A flagship service called Ajira Machine Learning (AML) is currently running on this platform. The AI-based service links crowd workers to digital tasks.

AML offers human language interfaces in African languages and pays people for teaching the AI to translate these languages.

The Chairman of the blockchain taskforce, Bitange Ndemo, had mentioned in an interview with BitcoinAfrica.io the need to tokenise Kenya’s economy. In addition, he had observed the importance of helping Kenyans to understand this process.

Target Implementation Areas

blockchainSome of the target implementation areas for blockchain and AI include the Ministry of Lands, Huduma Centres where important documents are issued, and the Ministry of Transport.

In the Ministry of Lands, illegally duplicated title deeds are a common issue. With blockchain technology, the land titling process will become transparent and secure.

Moreover, the blockchain will enable Kenya to build an efficient public service delivery system where digitised documents are sharable between various government offices and where Kenyans can trace the payments they make for services.

The Ministry of Transport can build a public transport model based on a sharing economy. This model is then built on a blockchain to ensure that all relevant stakeholders in the transport sector are part-owners and that everyone benefits.

“The Organisation would determine which participants would form part of the networked nodes that would run the validation software as well as the consensus mechanism. Typically, the network of participating nodes would include stakeholders with specific roles and mandates within the ministry and across the transport sector,” the report reads.

The taskforce believes that the proposed strategies and solutions in this report will propel Kenya’s economic development. Additionally, the ICT CS Joe Mucheru illustrates his commitment to have the entire contents of the report executed and to gain the backing of all stakeholders in making these recommendations a reality.

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Blockchain Technology

Pundi X Unveils New Blockchain Phone ‘XPhone’ in Kigali

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xphone

Singapore-based company Pundi X recently unveiled its blockchain phone, called XPhone, at the GSMA Mobile 360 Africa event in Kigali, Rwanda.

The XPhone

The XPhone features a blockchain-based operating system enabling users to make calls and send text messages without the need for a centralised service provider. This makes it the first phone that runs on a decentralised ecosystem while allowing users to make phone calls, send messages, and transmit data. Furthermore, users can switch between the blockchain mode, which is powered by Function X, and the Android mode.

“Telecommunications and Internet companies have derived tremendous value from controlling data. By decentralising apps, we can put this data onto a smart contract, effectively giving control back to creators and users. Much of what we call peer-to-peer or ‘decentralised’ services continue to be built upon centralised networks. We are changing that,” said Pundi X founder and CEO Zac Cheah.

PundiXAccording to Pundi X, each XPhone is “a node on the network contributing to the operation of the blockchain ecosystem. Content and connectivity are organised in a distributed, node-to-node manner.”

Pitt Huang, the co-founder and CTO of Pundi X, stated: “Scalability in blockchain is derived from the number and geographic spread of nodes. It is clear how achieving a critical mass in terms of scale will require something with a high utility for people. The XPhone, thus, has the potential to establish a large global pool of nodes.”

Pundi X aims to give back to users the control over how their data is used with Function X which keeps data secure and encrypted.

“Blockchain today is at a similar stage of development as the Internet in the early ’90s. Like the browser was to the Internet, a new kind of network and decentralised protocol like Function X will have a profound effect on blockchain, putting it in the hands of millions via a smartphone and returning control of their data to them,” Huang added.

Features

The XPhone will have a 5.65 inches screen, 6GB RAM and 128GB ROM, fingerprint sensor on the side, 16MP front camera, 48MP rear camera, 3500 mAH battery capacity, and the Qualcomm SnapdragonTM 660 Mobile Platform. The blockchain phone will retail for $599. These are, however, the minimum specifications. Both the design and specs can change.

The XPhone will also have an ‘X’ button on the side that enables users to easily access DApps when they are in blockchain mode.

“Blockchain-based calling and messaging is toggled on and off on the phone operating system, which builds upon Android 9.0,” the company explained.

Pundi X will produce and release 5,000 XPhones in late 2019. The company is open to partner with hardware and phone manufacturers that want to build their version of a blockchain phone powered by Function X.

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