Ahead of today's Strate Africa Blockchain Summit in Johannesburg, focused on how blockchain technology will emerge as one of the biggest disrupters of this age, two speakers have shared their views on potential uses of blockchain technology in Africa. .
Executive Director, Civic/Bitcoin Foundation, Llew Claasen, who is to talk on Blockchain KYC and Perfecting Identity Validation, stressed the need for interested users to separate Bitcoin as a token from its underlying technology - though the token was the first product that made use of the blockchain technology.
"Many other organisations have subsequently started work on alternative blockchains, but the principles are mostly still the same," says Claasen. "From a bitcoin token perspective, we expect adoption to grow in the near term in the areas of savings, peer-to-peer payments and mobile PoS for informal vendors. From a blockchain perspective, we expect adoption to grow in the near term in the areas of payment clearing and settlement, remittances, asset registries, especially title deeds and identity."
Lorien Gamaroff, CEO of Bankymoon, who will share on Blockchain 101 + Public vs Private Blockchains, likened blockchain-based digital currency adoption to that of the slow beginnings of the internet and how web use eventually became mainstream.
"We can see a similar adoption trend occurring in blockchain-based digital currencies, specifically Bitcoin, the first and most well known. Bitcoin was invented in 2009 and was initially only understood by people with a technical background. Very few consumer-friendly applications have been created to date. Merchant adoption has been sluggish and there has been a lot of negative press regarding scams, money laundering and underground markets. Bitcoin growth is set to become exponential, especially in Africa. There are a number of reasons for this. 80% of Africans do not have access to traditional banking services. Cross border remittance has very high costs with African corridors being the most expensive.
Gamaroff added that Africans understand the fragile nature of centrally governed financial systems and are eager to adopt alternatives and faith in central banks is exceedingly low, particularly in countries like Zimbabwe and Nigeria. This is unusual though because the global financial system itself is at risk with negative interest rate policies in the major economies and extremely high levels of government debt exposing its fragility.
He says Bitcoin acts as a hedge against inflation and monetary control and more people will come to see this over the next few years as the existing system crumbles. However, interest in Bitcoin has been sidelined by blockchain or distributed ledger technology which underpins it.
"Over a billion dollars has been invested in companies, proofs of concept and projects which aim to exploit the technology. Many of these efforts will be in vain although there may be productive innovations that emerge. It is unclear at this early stage how blockchains will be incorporated into existing business processes. Business cases and appropriate use cases remain elusive. The only clear use case, and one that is actually in production, is a decentralised currency," added Gamaroff.