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This is How Blockchain Can Help African Businesses Grow

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Blockchain Africa

The blockchain movement is swinging at a very rapid pace. From Deloitte’s 2019 Global Blockchain Survey of 1386 senior executives from countries around the world, fifty-three percent of respondents identified that blockchain technology has become a critical priority for their organizations in 2019— a 10-point Increase over last year. This clearly indicates that blockchain is well worth the hype it receives. 

Blockchain is gradually ascending to become an indispensable tool for business growth and improved productivity. However, as pivotal as blockchain is to the modern-day business, quite a number of business executives do not understand ways in which this powerful technology can help their businesses grow. The earlier businesses begin to understand and explore the possible use cases of blockchain for their operations, the better it is for them.

Possible Applications Of Blockchain For African Businesses

Blockchain can be applied in several ways to  help businesses optimize their activities and achieve the growth they desire. Here are a few ways blockchain can help achieve this.

Use of Smart Contracts

The use of smart contracts can help African businesses overcome the many issues associated with trust and middle men in Africa. With the use of these self-executing contracts, African businesses no longer have to worry about being defrauded by other parties and are guaranteed of payment after their products or services are sold to a customer. This will happen without the need for lawyers or middlemen. Smart contracts can help businesses save the costs associated with intermediaries such as banks, legal services, etc. This will, in turn, lower operating cost, save the time and paperwork associated with traditional legal binding of transactions, enhance trust, and improve transparency of all business transactions. 

Cryptocurrency for improved and more efficient payment systems

Since cryptocurrencies are decentralized, they eliminate the need for verification of transactions by financial institutions such as banks, thereby, saving a business the money associated with these services. Additionally, cryptocurrencies make it easier for a business to transact with customers all around the world without any extra exchange fee attached to foreign transactions. A cryptocurrency like Bitcoin, provides a universal payment currency for a business, thereby, making it easy for African businesses to accept payments from everywhere around the world, via a single currency. With cryptocurrencies, payment transactions can be processed at a much faster speed, occuring in near real-time. The high transaction speed that cryptocurrencies offer can help African businesses provide an improved overall experience for their customers.

Blockchain for efficient supply chain management

The application of blockchain in efficiently managing the supplychain of African businesses is very promising. Companies like Coronet have begun to leverage blockchain within the supply chain. Several African businesses involved with the manufacturing of products experience difficulty managing the complex supply chain. A single product may contain parts from multiple sources around different locations and can travel through several hands before getting into the hands of the manufacturer. This makes it difficult for manufacturers to verify the exact source of these components and track the movement along the supply chain. Blockchain can be used to solve this, as well as many other issues associated with the supply chain in Africa. Blockchain offers a decentralized ledger which can be used to record, track and manage activities along the supply chain. This simplifies the supply chain and also eradicates disputes between suppliers and producers in the event of an exception. With blockchain, businesses can enjoy a more transparent and efficient supply chain.

Blockchain for Data Security

https://decentralize.africa/how-blockchain-can-improve-data-security-in-africa/Data is the new oil in today’s business world and every business seeks to maximize the data they have to help them grow. However, the security of any company’s business data is threatened by hackers and other security breaches. Interestingly, the solution to this is one of the reasons why blockchain was created. Via blockchain, African companies can store their data on a decentralized ledger which is extremely secure and immune to security hacks and threats. 

These businesses will not need to spend a fortune hiring cryptographers and data security experts to keep their data safe. In addition to providing a secure storage for business data, the use of blockchain also eliminates the cost that would have been spent on hiring experts to ensure the safety of their data.

Blockchain for fundraising

The availability of capital and sufficient funds is pivotal to the growth of every business venture. In Africa, a large percentage of startups fail due to insufficient funding. Blockchain can provide African businesses with access to more funds, thereby, ensuring their survival and growth. Instead of relying on bank loans or venture capital, which may not be easy to get, blockchain allows businesses to receive funding through an Initial Coin Offering (ICO), without equity commitment. This means that businesses do not have to share a portion of their company to receive investment funds. To raise funds via an ICO, companies simply need to create a digital token and sell it to investors from anywhere in the world, in exchange for cash or cryptocurrencies. Both the investors and the businesses have something to benefit from an ICO. Although an ICO has its own limitations, it still offers an innovative alternative for African businesses to raise funds.

In recent years, the African business scene has attracted a lot of global attention. Africa needs a lot of its budding innovative startups to take the continent to the next level of economic growth and development. However, all these cannot occur without the internal growth of these businesses. The various ways in which blockchain can help businesses achieve and sustain growth is worth exploring to unlock a massive and sustainable growth for local businesses and even the continent at large. To achieve this, African entrepreneurs must begin to embrace the application of blockchain in their businesses.

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Kehinde is a driven human who is passionate about leveraging technology to transform the future of humanity and the way we all live. His interest lies in constantly getting valuable information and being part of a mission that seeks to create a transformative radical shift.

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Market Watch

Jack Dorsey‘s Square to develop open source Bitcoin mining

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Jack Dorsey Bitcoin

On Friday, October 15, Twitter CEO Jack Dorsey announced that American fintech company, Square, would be looking to get into Bitcoin mining. Jack Dorsey who is also Square’s CEO announced this on Twitter which subsequently sent waves through the bitcoin market, surging its price to almost a record high, rising over $62,000 over the weekend. According to the Twitter boss, Square is looking to building an open source Bitcoin mining system that would be available to individuals and businesses.

Sharing his thoughts further on the initiative, he stated that “Mining needs to be more distributed” and that “the more decentralized [mining] is, the more resilient the Bitcoin network becomes. He also mentioned the apparent inaccessibility of mining stating that “Bitcoin mining should be as easy as plugging a rig into a power source.

Dorsey also believes that bitcoin mining “needs to be more efficient and that “clean and efficient energy use” would be undoubtedly beneficial to the digital currency in the long run.

Dorsey ended the thread by saying that a “technical investigation would be undertaken by a Square team led by Jesse Dorogusker, Square’s hardware lead. If successful, this initiative would be another of Square’s bitcoin focused projects which includes a Bitcoin hardware wallet.

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Financial Leaders from G7 Release Guidelines for Central Bank Digital Currency

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Source: World Atlas

At a meeting that was held in Washington, yesterday, October 13, G7 leaders discussed central bank digital currency and endorsed 13 public policy principles with regards to their implementation. The financial leaders from G7 agreed that CBDCs would complement cash and should not be detrimental to the monetary system. The G7 leaders have been discussing CBDCs this week concluding that they should do no harm and meet rigorous standards.

It should be noted that G7 includes finance leaders in advanced economic nations comprising of Canada, France, Germany, Italy, Japan, the U.S and the U.K. the G7 leaders make it mandatory that any newly launched CBDC should not harm the central bank’s ability to perform its duty of maintaining financial stability. In a joint statement by the G7 finance ministers and central bankers, they said that, 

“Strong international coordination and cooperation on these issues help to ensure that public and private sector innovation will deliver domestic and cross-border benefits while being safe for users and the wider financial system.” 

The joint statement further states that CBDCs are complements to cash and could serve as a liquid or safe settlement assets with an added advantage of anchoring existing payment systems. CBDCs issuance should be entrenched in a long-standing public commitment to transparency, rule of law, and sound economic governance. The statement added at CBDCs must be so efficient that they are fully interoperable on a cross-border basis. 

The G7 leaders agreed that they had a duty to minimize the incidence of ‘harmful spillovers to the international monetary and financial system” 

The G7 statement reiterated a similar statement earlier made by G20 that no global stablecoin project should begin operation until such a token has addressed legal, regulatory and oversight requirements. 

Countries like China and Nigeria are ahead of the pack with regards to the adoption of digital Yuan and Naira respectively. China’s crackdown on cryptocurrency may be a step forward for the country’s plan to promote its digital Yuan. Nigeria, on the other hand, postponed the launch of its eNaira in deference to the 61st anniversary of Nigerian independence on Oct 1. 

However, countries like the US and the UK are dragging their foot with regards to the introduction of CBDCs to their financial system. There are insinuations that America is in danger of being left behind technologically and financially if it doesn’t get serious with the implementation of CBDC in its financial system.

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Learning Guides

Understanding Speculation and Crypto Volatility

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Everyone who dabbles in the crypto industry learns almost immediately that the market is very volatile and oftentimes things can change very quickly. That volatility is the fundamental reason why some investors make absolutely stunning gains in so short a time and others lose a lot of money as well. Trading in crypto is one of the riskiest ventures any person can undertake and as they say, it’s not for the faint of heart. The risks can be mitigated of course and sometimes depends specifically on the coin or crypto asset being traded on, barring general market trends.

Nevertheless, to get to the bottom of the volatility concept, one must understand speculation in the market. To start off, the concept of speculation isn’t limited to cryptocurrencies, on the contrary, speculation has existed for as long as economics and trading has. But it is worth saying that speculation is often a feature of novel sectors, assets, commodities and the like. So, even though cryptocurrencies have been around for more than a decade, they’re still in their infancy as far as markets go. One could say that the market is still trying to find its feet.

One of the fundamental reasons why cryptocurrencies are so volatile is that they are fundamentally backed by nothing of value outside the attention that they get. Unlike many fiat currencies which are either pegged to another currency’s value or whose value is unilaterally determined by a central authority, cryptocurrencies only derive value as a function of how many people are willing to use is to transact, i.e. trust in the asset because other people trust it. As a rule of thumb, the larger the number of people who accept the asset, the more valuable it becomes.

This is one of the hallmarks of speculative trading. In the crypto world or in any market that’s novel and untested, many people are in it to win it which means their strategies in trade has the objective of making as much profits as possible in the short term. Therefore, the market enters a subtly dangerous cycle of rapidly changing prices of assets. Basically, investors typically buy assets when prices are low and wait. As more investors are attracted to the commodity for its low prices, it sets off a cascade where more people buy in, causing the price to steadily rise. 

However, all good things must come to an end and it almost always gets to a breaking point whereupon the price gets high enough for investors to begin to sell. This reverses the earlier cascade and as more and more investors pull out, the prices can fall dramatically causing even more to sell off in fear of losing whatever investments they have left. The prices having fallen resets the game and primes investors to begin buying again.

Volatility has been one of the talking points of many critics of cryptocurrencies often comparing it to a Ponzi scheme. And in certain cases, persons of interest with large pulls and audiences can substantially affect the rate at which prices rise and fall. Other factors include government regulations. Volatility at its core reflects the often chaotic nature of trade and market interactions and human hopes and fears.

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