Attracting International Business
Substantial Development of Blockchain Technology
Africa is the world’s second largest continent, at 30.3 million square kilometers. It is the second most populous as well, with 1.2 billion inhabitants. And yet, its one of the poorest continents with a 54 combined countries generating a GDP only one-third that of North America. On the flip side, a recent increase in political stability and improved infrastructure combined with a rich pool of natural and human resources is attracting a growing number of international businesses. Also, Africa boasts the world’s highest GDP at 5%. Estimates for 2018 exceed 6.5%, with the potential to become the world’s most powerful engine of economic growth.
How does this relate to cryptocurrencies and the blockchain? Though independent of each other, Africa’s economy and Bitcoin technology both boomed during the same period. Each in their early stages, they simultaneously experienced substantial development. Just like the Silicon Valley was mostly farm land before the technology boom, the mass production of personal nodes is what caused a sputtering semiconductor industry to explode. Correspondingly, the same phenomenon is bubbling beneath surface of developing regions in Africa.
Promoting Financial Inclusion
Recently, the Bill & Melinda Gates Foundation partnered with Ripple and others to launch Mojaloop. This is a decentralized and simple open source payment platform that promotes financial inclusion among Africans. The cutting-edge technology settles funds among multiple providers across individual systems quickly and efficiently. Simultaneously, it connects bank accounts to an individual’s mobile money wallet, and wallets to merchants.
For ten years, founder of Bitcoin startup BitPesa Elizabeth Rosiello lived in sub-Saharan Africa, but couldn’t open a US brokerage account because it required a utility bill. This is something that first-world residents take for granted. “It’s indicative of the constraints imposed by geography,” she recently said in an interview with Fortune Magazine. “Think about all the diverse, amazing economies and people and business people across the 54 countries within the African continent that are routinely excluded in many ways from participating in global markets. Imagine if you just cut Hong Kong off from the rest of the world. That’s how a lot of businesses feel about living and working in Nigeria.”
Millennials in Africa Utilizing Digital Wallets
Thankfully, there are bright spots in Africa exploring the economic opportunity that only the blockchain and cryptocurrencies can provide. The South African Reserve Bank is creating a task force to assess the economic opportunities and risk. The project included a pilot test using Ethereum’s blockchain for smart contracts, and the response was optimistic.
Meanwhile, African millennials can’t get enough of Bitcoin. Correspondingly, many own smartphones, and a growing number is utilizing digital wallets. As traditional remittance, companies like Western Union continue to rake both sides of monetary conversions when transferring funds across inter-African borders. Cryptocurrencies promise a cheaper and less complicated option. As localized governments place controls on access to the US dollar, Bitcoin is making it possible for businesses to transfer cash abroad. In Africa, Bitcoin is more than a coin, it’s a place to store value, trade against the US dollar, and to build wealth.
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