Every new technology goes through its own distinct journey to notoriety. From the first introduction to the market to mass adoption, no two technologies go through the same journey but even the most seasoned technology observers will tell you that no other innovation has seen a hype cycle like what Bitcoin (perhaps the most popular cryptocurrency) is going through at the moment.
The hype cycle is not scientific and is not meant to be predictive but it is a useful guideline for gauging what the informed public opinion is. The cycle, using Gartner’s famous model, usually starts from the technology trigger – the point at which the technology is first introduced – followed by the peak of inflated expectations as adopters over-emphasise the new technology’s benefits. Due to this over-emphasis, the next thing to happen is the inevitable trough of disillusionment, where the expectations are corrected and brought in line with reality.
This is followed by the slope of enlightenment, during which some uses are identified for the technology, marking the beginning of widespread adoption. The final stage in the hype cycle is the plateau of productivity, where users become accustomed to the technology and its benefits are accepted as the norm.
For Bitcoin, the trigger was the launch in 2009 and the peak of inflated expectations was in 2016-17 when prices exploded and everyone was keen to jump on the bandwagon. Many commentators believe that Bitcoin is now in the trough of disillusionment. Some have even said that price volatility may be an indication of public sentiment, with reports of scams and unrealistic promises putting off some serious investors.
More Use Cases And Growing Acceptance
Some other commentators believe that cryptocurrencies are going through the slope of enlightenment, with growing acceptance and use cases across industries. For example, in Africa, cryptocurrencies are emerging as a viable option for making the newly-signed African Continental Free Trade Agreement (AfCFTA) more effective. By providing a range of viable options for secure cross-border payments, cryptocurrencies are gaining acceptance across the continent.
Traditional financial services companies are also rolling out institutional Bitcoin trading services. Various organisations are looking into how they could use Bitcoin to improve their businesses. For example, people are starting to use Bitcoin to solve problems, such as those linked to credit card fraud in the airline industry. The price is now linked to the value of the technology, not just hype. Cryptocurrencies, in general, are also improving and becoming more usable – cheaper, faster and safer.
The Impact of Facebook Libra
Along with the increased acceptance and use cases, there is also the announcement of Facebook Libra and the impact that is bound to have on global perceptions. With Facebook’s universality, there is reason to believe that the new currency will bring the much-heralded benefits of cryptocurrencies to more people than ever before.
When the conversation around cryptocurrencies first started, there was a level of uncertainty around its credibility and whether or not it should be taken seriously. However, with use cases more widely available, there are reasons to believe that mass adoption is just around the corner.
At this point, the only likely hindrance to mass adoption would be an inability to see the point or understand the potential benefits of adopting cryptocurrencies. This is why access to comprehensive, accurate information that anyone can understand without knowing the finer details of the technology is very important. If we are able to successfully make this happen, we might just be one step closer to delivering on the promise of cryptocurrencies.
This article was contributed by Marius Reitz, General Manager for Africa at Luno.
The Ethereum Merge: How Is It Going to Change Trading?
Ethereum is one of the most popular cryptocurrencies in the world. As part of the emerging blockchain technology, it has been at the forefront of developing decentralized finance and apps.
For many traders, the network’s native currency, Ether, has been the go-to digital money to invest. Its appeal doesn’t only lie in its many uses (particularly now after an increasing number of vendors have decided to accept payments in digital money) but also in the fact that the blockchain is so new and exciting to be a part of.
As of mid-September 2022, Ethereum has undergone a change known among traders as the “Merge.” This upgrade represents a switch from the proof-of-work system that has been used so far to a proof-of-stake model. This model is expected to bring a reduction of no less than 99.95% of the energy consumption currently used when mining ETH. Not only will this be very good for the environment (the decrease is analogous to the carbon footprint of a country like Portugal completely vanishing), but it’ll also help further scale the Ethereum ecosystem and make it more manageable.
But what does the Merge actually mean, and how is it set to impact your trading ventures? Let’s have a closer look at the possible implications.
What is the Ethereum Merge?
Since its creation, the Ethereum blockchain has been secured with a proof-of-work mechanism. Proof of work requires hardware processing power, as it needs to solve complicated math problems in order to mine the next block. The recent update has removed the need for this process and, by extension, for the mining nodes and the competition for block-solving rewards.
- There are many advantages to the move towards the Merge, among them including the following:
- Faster transaction confirmation: Ethereum transactions were already faster than those in other cryptocurrencies, but they are now set to become even faster.
- Energy reduction: Crypto has constantly been accused of unsustainable energy consumption by its detractors. In today’s world, massive amounts of power needed to generate digital money isn’t a very good look. The Merge is set to change this aspect and reduce energy consumption by over 99%.
- Sharding: This component of the upgrade is part of the strategy to make the Ethereum ecosystem a more scaled-down environment. Sharding allows for the split of extensive processes into smaller pieces, making them more cost-effective and easier to monitor and manage.
- Further decentralization: While the blockchain is already a decentralized ledger, lowering the hardware requirements, as well as the use of node operators, will take it one step further.
ETH Supply and Demand
When you’re thinking about ETH, you’re probably thinking about the different strategies of how to buy Ethereum. It’s not a difficult thing at all. All you need to do is create an account on a platform that accepts Ethereum. Make sure to provide proof of your identity and wait for your account to be properly validated. Depending on the website you’re using, this may take a few hours to a few days. Even after your account has been activated, you might still not be able to perform transactions for a few days as part of the exchange’s policy. This may seem annoying and perhaps even overkill, but it’s crucial in order to safeguard the safety of your money and identity.
The success of the Merge can signal a boost in the value of all crypto assets. If you’ve diversified your portfolio by adding several other digital currencies, then you’re in luck. Overall, the amount of ETH issued per block is expected to drop by around 80%. This means safer and cheaper transactions, which are going to create a higher demand for Ethereum in the investment ecosystem. It’s very likely that even naysayers may finally be convinced to become less critical of cyber money and give it a try.
One of the most critical aspects of the Merge lies in its promise to reduce the carbon emissions associated with mining. This is a step in the right direction and may also be exactly the thing Ethereum needs to attract new traders. Since the commitment to solving ecological problems is paramount for many customers and consumers these days, and many don’t want to interact with a vendor that doesn’t promise to deliver an ethical, environmentally-friendly experience.
The same stands true in the case of Ethereum. While the coin is widely popular considering its relatively recent appearance in the financial world, the upgrade is set to improve its reputation. Convincing a large number of prospective traders to take the plunge and enter the world of Ethereum is no easy feat, but this last upgrade may have been able to achieve just that in one fell swoop.
If you’ve been on the fence as well, willing to join in on the crypto hype yet reticent to harm the planet, the Merge might just provide a permanent solution to this dilemma.
How Does Staking Work?
The staking process involves validators locking up 32 ETH as collateral into a small contact device. The coins remain locked until further upgrades enable a withdrawal. The rewards are also collected at that point in the form of a balance over the 32 Ether previously staked. These funds don’t contribute to the overall stake weight.
If you don’t have 32 coins at your disposal or don’t want to use them for this purpose, you can enter a staking pool. This mechanism combines several individuals’ deposits to raise funds to collect the 32 ETH necessary for the use of the validator block. The rewards are shared proportionately to the amount deposited by everyone. Generally, the gains will be pre-determined and of a fixed amount.
The blockchain isn’t a perfect mechanism. It still has quite a way to go before achieving this status. Many are still concerned about the possibility of scams, DoS attack vulnerabilities, and staked ETH centralization. But overall, the system is very safe and seems only to be getting better. Soon enough, we might expect to see it replacing traditional operating systems.
Op-Ed: The Blockchain Holds Massive Employment Opportunities for Africa’s Youth
Constituting 19 percent of the global population, the large population of youth in Africa is what prompted the term ‘Africa Rising’. For the rest of the world, this growing population presents a growing consumer base.
However, while the world looks at the 226 million African youth as a potential market for their products, it is also important to recognise the ingenuity, determination, and grit of this demographic. Anyone who lives in Africa knows that we are problem solvers. We make do without government social security or financing options; we wake up every day and put food on the table.
How Does the Blockchain Fit in?
According to ConsenSys, the main reason why Africa is leading the blockchain revolution is that we do not have any legacy systems that get in the way. Talk about every dark cloud having a silver lining. And if you know anything about blockchain, then you know that it has the potential to disrupt everything. From the way we process our birth certificates to the way we process financial transactions.
With over 350 million people unbanked, weak currencies, poor identifications systems, and widespread corruption, we can almost say that the blockchain was made for Africa.
According to Digest Africa, African countries had the highest number of online searches for “blockchain” and “bitcoin” in 2017. Africa is also the world’s 2nd fastest growing economy according to the African Development Group. To top it all off, the Internet Society is partnering with Facebook to expand Internet connectivity throughout Africa.
Can the writing on the wall get any clearer? It is the perfect time for African youth to rewrite the future. Forget about the degree you studied on campus, it’s time to unlearn. Forget about the usual employment rituals, dare to try something new. Forget about waiting for a teacher to come and teach you about blockchain, self-learning is your friend. Most importantly, forget about your local work market, think global. Therein lies endless employment opportunities for African youth.
The rest of the world might say Africa is rising because of our booming youth population. But we know Africa is rising because of a thriving youth population which is skilled, informed, emotionally intelligent, has a knack for solving problems and can negotiate at the table.
In the same vein, some may think that only developers or programmers can cash in on blockchain jobs but keep in mind a blockchain system cannot exist in isolation. A blockchain-based company will still need marketers, salespeople, PR professionals, researchers, creatives and innovators.
It is inevitable that blockchain will create millions of jobs as we continue to leverage it to solve some of Africa’s most pressing challenges. It is like we are back in the 90’s when the Internet exploded, only this time it is the blockchain and we are ready for the race.
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