by Michael Kuchar, Trading Beasts
Blockchain technology is a peer-to-peer network that uses cryptography to store information on decentralized digital ledgers.
Interestingly, blockchain remains the most innovative technology on the internet when it comes to finance and valued assets. This technology is unique because of its decentralized form. In fact, no person, organization, or government controls it.
When blockchain was introduced, it was the powerhouse behind Bitcoin – the first and most valuable cryptocurrency. However, the use of blockchain has extended from cryptocurrencies to other sectors. Presently, it is now decentralized, automated, immutable, and transparent, thereby bringing many benefits to any industry.
Conversely, several countries are quickly adopting the usage of blockchain technology due to its valuable benefits. However, blockchain technology and cryptocurrencies are getting mixed reactions from countries across Africa. While some African countries accept it with open arms, other countries are yet to acknowledge its benefits.
Therefore, in this post, we will focus on Africa and how advanced the blockchain technology is on the continent.
What Are The Wins?
Thankfully, the blockchain technology has recorded some significant wins in Africa.
There is a blockchain-based scheme launched by private sector partners and the NURTW – Nigeria Union of Road Transport Workers in Nigeria. The scheme was launched to improve road transportation between Nigerian states, focusing on road traveling insurance and record keeping.
Likewise, Ghanaian, Kenyan, and South African traditional banks invest heavily and collaborate to develop blockchain technology and explore its benefits in other areas.
In such respect, these countries have used blockchain technology to establish e-payment and e-commerce platforms to facilitate commerce. Not to mention, these African countries’ citizens are also some of the highest holders of cryptocurrency wallets in the world.
When it comes to global crypto stats, African countries are also at the top. Hence, there are high crypto ownership rates in Africa, but not in every African country.
Take, for instance, the trend data insights from Google Trends for cryptocurrency. It revealed that five African countries rank on the top 10 regarding cryptocurrency as a topic. That’s half of the top 10, and the five countries include South Africa, Nigeria, Ghana, Kenya, and Uganda. What this implies is that lots of African are interested in cryptocurrencies and blockchain technology.
Furthermore, South Africa and Nigeria are among the top 5 countries globally when it comes to crypto ownership. As revealed in a recent survey, South Africa ranks 3rd while Nigeria ranks 5th at 13% and 11%.
Another win for Africa regarding blockchain technology is M-Pesa’s story and success, a Kenyan mobile payment medium with support for bitcoin. Launched in 2007, M-Pesa is now gradually dominating mobile finance in Sub-Saharan Africa, with up to 11 billion annual transactions and 37 million active users. In fact, a lot of forex brokers in Kenya use M-Pesa for deposits and withdrawals of their African clients.
In terms of cryptocurrency, the Africa continent can be described as a trailblazer. For instance, Tunisia is the first country to issue its national currency over an application that operates on the blockchain platform. Senegal is also following through with its plan to introduce the e-CFA using blockchain technology.
Nevertheless, blockchain technology is much welcomed on the Africa continent for its financial adaptability because it gives more Africans the opportunities to access seamless financial services.
We’ve looked at areas where blockchain is winning in Africa, but what problems are there? Let’s take a look at the obstacles.
What Are The Obstacles?
The prominent obstacles in the way of blockchain advancement in Africa revolve around infrastructure. A lot of African countries lack or have an underdeveloped infrastructure for cryptocurrency and blockchain.
Take, for instance, the Bitcoin nodes. There are only 20 Bitcoin nodes in Africa, while there are over 10,200 Bitcoin nodes globally. This is an abysmal statistic that implies that Africa owns just about 0.2% of global Bitcoin nodes. Additionally, CoinShares research reveals that there are no significant Bitcoin mining activities across Africa.
Far from that, Africa has the problem of instability in its financial sector. In fact, the rate of inflation in Africa alone over time is higher than the average inflation rate globally. This might be a problem, but it can be entirely solved by adopting blockchain technology.
Looking at mobile money services, M-Pesa has huge transaction charges. On average, 2% is charged for all transactions irrespective of the amount involved. Meanwhile, transactions with foreign crypto wallets attract no or small fees.
Finally, inadequate electricity supply and low internet coverage are among the significant blockchain technology obstacles in some African countries.
The Africa continent can benefit the most from the innovation offered by blockchain technology. Fortunately, several African countries are already implementing blockchain technology in various areas, even with their small infrastructure.
However, at the moment, this technology is only paramount in some specific countries. Besides, several African countries are uninformed concerning how the blockchain works.
For the advancement and significant adoption of blockchain technology across Africa, it is best that the obstacles are eliminated.