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Blockchain Explained Simply

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Blockchain explained
Image by Pete Linforth from Pixabay

We live in a world where we generate tons of data every day. The picture of your family you took with your smartphone during Christmas, those thoughts you put on your Facebook wall, the important documents on your PC, the content on your favourite blog, those YouTube videos you love to watch, your search history on Google, your financial statement in the bank, In fact, every single thing you create with a computing device is data.

Have you ever wondered how these data are stored?

They’re stored on central servers! – piles of computers stored in a warehouse (data center). These computers contain the information that is displayed to you when you request them e.g. Searching for your favourite YouTube videos, checking your account balance on your banking mobile app, etc.

They’re made available to you in a split second, you’ll never guess something of such is happening in the background.

However, these central servers are vulnerable to hack.

Blockchain is a digital ledger that comprises voluntary participants that store data on their computers. It’s a distributed database where every participant’s computer on the network is acting as a database or server. This allows data to be transparent and much safer.

When was blockchain invented

In 2008, the world had just recovered from a global financial crisis that exposed the flaws of the monetary system. A system designed to keep much of the world population under control while the rich enjoyed the benefits.

Shortly after, an unknown person or group of people with the alias Satoshi Nakamoto invented Bitcoin – a peer-to-peer electronic cash system, at the center of bitcoin is a decentralised database – blockchain – which stores bitcoin transactions in a manner that makes the records unchangeable.

Bitcoin was the first real-world application of blockchain and paved way for people to see the potential of this technology.

Ethereum is another example of a blockchain. It allows users to build decentralised applications with its smart contract enabled features.

How does a blockchain work?

Imagine a class of 100 students connected to a peer-to-peer file-sharing network, all the 100 students are working on the same assignment. Whenever one student types a sentence the other 99 students see the sentence and if over 51% of the 99 students agree that the sentence is correct, it becomes saved forever and cannot be reversed, this is how the blockchain works.

As a distributed database, blockchain is more secure because it’s a network of computers connected to each other. Unlike centralised servers vulnerable to hack, attempting to hack a blockchain means hacking everyone’s’ computer taking part in the network which is almost impossible.

As the name sounds, Blockchain is a chain of blocks that grows as new blocks get added to the chain. A block is a folder containing records, files, transactions.

If you’re familiar with Microsoft Word, whenever you type, and a page is filled, a fresh page is automatically generated.

Think of those pages as blocks and what you type as transactions/records carried out on a blockchain network.

Each record stored on the blockchain is time-stamped and assigned a digital identity called ‘hash ID’ that can easily be traced.

The working principle of a blockchain

Blockchain is an ever-increasing line of records. Before new data can be added to the blocks, most of the participants on the network have to agree, meaning they have to reach consensus. There are two major ways through which they can reach consensus. They are

Proof of work (PoW)- which is a consensus mechanism where participants on a blockchain network attempt to validate a transaction and add it to a block by dedicating some computing power to the process to show he/she worked for it.

While Proof of stake (PoS) on the hand is a way the network reaches consensus whereby participants on the network stake a sizeable amount of coins to validate his/her commitment and add transactions to a block.

Blockchain applications

Blockchain has 3 fundamental characteristics that allow its use cases to span across several sectors which includes

  • Transparency
  • Decentralization
  • Immutability

Blockchain applications remove the importance of a third party and drive peer-to-peer interaction between parties in a fully trusted manner without the need to worry about fraudulent acts.

Today, blockchain application has spanned into various sectors exceeding financial records. Let’s look at two sectors in which we can apply blockchain, especially in Africa.

Governance & voting

Most African countries are suffering from bad governance at some levels and the viability of the democratic system being practised has been questioned a million times. Electoral practices are still paper-based and usually ends with lots of casualties. Blockchain-based voting systems allow for total transparency as each vote is immutably recorded and time-stamped.

This ensures a free & fair election. In a mobile-driven continent where internet penetration is growing exponentially, citizens of each country can easily participate in elections from the comfort of their homes with the assurance that each vote is trustfully accounted for.

Blockchain removes the figures representing people’s interest as they can put decisions to a vote and the result is enacted. This is the true power of democracy – power in the hands of the people.

Remittance

Remittance forms a major part of the African continent’s GDP. People send money back home to their families & loved ones. Reports show that in 2018 over $25 billion was the remittance inflow into Nigeria alone, a figure exceeding the total crude oil sales.

This signifies how large the remittance market is valued. However, there are giant corporations who feast in this market. International money transfer operators including Western union, MoneyGram, Azimo, etc. charge ridiculous fees as high as $20 per each $200 transfer.

Outrageous, right?

Hold on, some transfers take days/weeks to process before arriving at the receiving destination.

In a world where the internet connects everyone, communication is as fast as light, money should be able to move as fast and cheaper.

Blockchain-based currencies such as Bitcoin, Litecoin, and Dash allow the transfer of value within seconds at a low fee regardless of the distance of the receiver and volume being sent.

This allows for cross border transfer of money as fast as a text message with a negligible transfer fee. There are companies using blockchain to settle cross border remittances, including Bitsika and BitPesa amongst many others.

Other applications of blockchain include; crowdfunding, land registry, data storage, supply chain management, smart contracts, etc.

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Blockchain Technology

How blockchain can bridge the trust gap in governance

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Governments and authority figures have existed throughout history to serve many purposes amongst which trust is central. In matters of social and economic concern, some form of trust and/or distrust has enabled people in all cultures across all times to transact and interact, to exchange value and advance cultural agenda. This is so important that our very concept of money is built on trust or value induced by trust.

However, for most of history up till now, authorities have wielded central power and that has always been an avenue for corruption, a lack of transparency which leads to wastage of resources and spirals down to a lack of trust by a populace in the authority over them. Evidently, this is paradoxical, the governments are to be trusted by virtue of the authority given to them but it’s this centralization that ends up upending it down the line.

Evidently, many people in many countries do not trust governments to do things the way they say they’d do them. The question is, what can a hypothetical government do about massive distrust from citizenry?

Enter the blockchain. As with many things, technology often has something to offer. The blockchain which underlies cryptocurrencies like most famously, Bitcoin, has been imbued with a certain peculiar philosophy; one of democratization. Although this is more of a mantra within crypto circles, it’s not difficult to see why. First is the blockchain’s nature; distributed ledger built on cryptography with certain features which make it functionally immutable. It’s most famous and defining uses have been with crypto but it could be so much more. A record keeping system for example, one that would be immutable and most importantly, transparent, open to all to see.

So, in the administration of nation states, blockchain technology has the ability to fit into a lot of places. The main idea is to be able to carve out trust from distrust i.e. the apparent reality of being watched and having all records secure is an incentive for governments to act transparently. In some use cases, governments (as well as private businesses of course) could leverage smart contracts, a task built into a blockchain that’s executed when the conditions specified are met. These systems in governance would undoubtedly improve transparency, cut down on corruption as well as its accompanying wastes and overall be more efficient.

So, will we see a trend where governments would like to use blockchain technology? Overall, this is for now unlikely. World governments, it would seem, do not understand blockchains very well and hence are apprehensive about them even to the point of banning the cryptocurrencies built on them. At the end of the day, the use of blockchain at the governmental level of any nation depends on the nation’s own unique set of problems and issues. All in all, the next few years will be interesting no doubt in this regard.

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Africa Blockchain Institute

Africa Blockchain Institute Organized The First African Blockchain Summer Bootcamp For Teenagers In Ghana

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In the spirit of catching them young, the Africa Blockchain Institute organized the first-ever Blockchain Summer Bootcamp for teenagers (age range 13 to 19 years old). A successful Bootcamp, according to the participants’ testimonials and stakeholders, held at the OpenLabs, Ring Road, Accra Ghana, between Monday 2nd August, and Friday 6th August 2021. 

The teenagers applied from across Africa, and selected participants all converged at the OpenLabs, Ghana, for an intensive five days of learning, interacting, and implementing personal  Blockchain projects. The participants were divided into three significant tracks, thus; Blockchain Development, Blockchain for Creatives and Blockchain Entrepreneurship. 

Blockchain Summer Bootcamp for Teens by ABI
Blockchain Summer Bootcamp for Teens by Africa Blockchain Institute

Across these three tracks, the teenagers learnt introductory units to Blockchain Development for societal challenges, Blockchain evangelism, Non-Fungible Tokens, and how Cryptocurrency works. Another highlight of the program was the excursion to the Accra Digital Centre, where the Boot Campers were introduced to the tech ecosystem and feel of the Ghana Tech Lab and Accra Innovation Hub spaces. A visit was also made to the Museum of Science and Technology, and the teenagers got to understand the history of technology in Ghana. 

Worthy of mention was the panel session aimed at motivating the students to pursue a career in technology. While making his comments during the panel session, the founder of BankLess Africa, Mr. Muntala Mohammed Shaibu, urged the teenagers to stop seeing themselves as too young to experiment with new technologies. In her remarks, Ms. Elohor Thomas, CEO & Co-Founder of CodeLn, urged the teenagers to continue to explore their interest in technology and blockchain early.

Blockchain Summer Bootcamp for Teens by ABI
Panel Session, Blockchain Summer Bootcamp for Teens by ABI

The Bootcamp ended with personal project presentations from the Blockchain Development and the Blockchain for Creatives & Entrepreneurship tracks. Projects such as NFT blogposts, Blockchain product reviews and Blockchain for transport and logistics were presented. The best presentation won the OpenLabs scholarship for Robotics Course. Thanks to Dr Sujith Jayaprakash, the Director of OpenLabs, Ghana, for the offer of scholarship. In his closing remark, the Executive Director of the Africa Blockchain Institute, Mr. Kayode Babarinde, urged the teenagers to continue using the  skills and knowledge gained during Bootcamp to explore Blockchain-related solutions further. We also appreciate Mr. Ganzaro Omar, Chairman, AfroBlocks, for his supports, and fostering collaborations with the Ghanian Blockchain community.

The Africa Blockchain Institute will continue to hold future Blockchain Summer Bootcamp series in various African cities to drive Blockchain knowledge into innovators early enough. 

Oluwaseun David ADEPOJU

Head of Research,

Africa Blockchain Institute. 

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Blockchain Technology

Africa Blockchain Hackathon 2021 Edition Begins Registration 

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Africa Blockchain Hackathon
Image Credit: Africa Blockchain Institute (ABI)

The 2021 edition of the Africa Blockchain Hackathon, a brainchild of the Africa Blockchain Institute (ABI) is ready for take-off. The initiative was created to allow young professionals, tech enthusiasts, students and policymakers amongst others to gain exposure to the opportunity of Blockchain/DLT Digital Innovations through mentorship, career and business opportunities. The Hackathon Program is a product of the partnership with FreeTON Africa (Sub Governance). The Hackathon provides a controlled, structural and sustainable mentorship model as well as a community to nurture and empower developers with potential towards building DLT and blockchain solutions. Registration for the Hackathon is already underway and the deadline is fixated on August 25, 2021. 

The contest is done in collaboration with FREE TON, an Open Source (OS)  community project created by developers of the Telegram Open Network (TON). TON OS  has more features than the Ethereum Virtual Machine and is designed as a decentralized operating system capable of handling decentralized applications. TON OS also has a stack of components that can be used by developers to create powerful applications. By making these components Open Source, anyone or everyone can view and copy fragments of the code.

The contest is open to all Africa Blockchain enthusiasts, newbies, artists, developers, policymakers and students. There is a prize of over 62,000 TONs up for grabs for the winner. The contest is open to the 54 countries in Africa for participants to build Blockchain Applications on Free TON. The aim is to add value to the FreeTON Network and the continent will equally benefit from the applications.  

According to John Kanyiri, FreeTON Africa Representative and the FreeTON Africa Team, “… we once again look forward to identifying projects culminating from this hackathon as being not only a showcase of what Africa can offer the global blockchain space but also solutions to the continent’s challenges. The creativity, ambition and sophistication of our localized developers are quite evident in the Hackathons and this time around we hope to see the same. Discovery of new talent and exposure of the same from very remote locations of Africa was witnessed in the last Hackathon and we look forward to the same this time too.”

The Hackathon is open to covering aspects of the blockchain that academia needs to know giving ample information about how the blockchain works and the current and future applications needed to change the world from the blockchain Point of View. The contest is open to both newbies and experienced developers as some of the best technical experts in the blockchain community will be there to aid you. In other words, the event is open to all who seek blockchain knowledge. 

The contest will be carried out in three sections: country competition, regional competition, and continental competition. The country and regional competitions will be held virtually however, winners of the regional competitions will get an all-expense-paid trip to South Africa for the Finals. The winners will attend the Grand Finale which will be hosted in South Africa. Participants are allowed to work on topics or applications that are peculiar to the needs of the African continent. However, some applications may include: 

  • National voting platforms
  • Fintech infrastructure/Digital Wallets (to help those who do not have access to banking)
  • Land ownership and registry
  • High tech job creation
  • Human rights protections

There are lots of prizes to be won including an all-expense paid trip to South Africa for the winners of the regionals. Other prizes includes:

1st Prize: 25,000 TONs

2nd Prize: 15,000 TONs

3rd Prize: 5,000 TONs

4th – 20th Prize: 1,000 TONs

Participants will have to follow a simple process leading up to winning amazing prizes. The first step is to submit applications for the hackathon, meet all the requirements and pitch ideas. Next, participants have to receive Acceptance Confirmation Notification/Onboarding, form a team and then join the opening session. The last part of the process involves building the application and collaborating with team members. 

Notable Dates 

Applications open July 2021.

Application Deadline: August 25th, 2021.

Hackathon Dates:  September 6th – 24th 2021. 

Begin your application here:  https://bit.ly/africablockhack 

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