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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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From Crypto and Blockchain to AI, Fintech and Web 3.0 delivered twice in a week (Mondays and Fridays)

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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Crypto Assets

Crypto prices drop as global market fear increases

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Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

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Bitcoin in Africa

The rise of CBDC in African economies

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Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

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Bitcoin trades above $51k ahead of El Salvador’s adoption

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Bitcoin growth

Bitcoin price has rallied above $51,000 ahead of El Salvador’s adoption. The immediate surge in price may be due to the social media campaign that everyone should buy sats of Bitcoin to support El Salvador’s plan to make the coin a legal tender or it may be due to the news of El Salvador’s adoption of the coin as a legal tender on September 7. Users of social media platforms like Twitter and Reddit are discussing how they will buy Bitcoin of $30 each to mark the new El Salvador Bitcoin law.

The surge in Bitcoin’s price began in the last 24hrs with the price rallying around $51,955 with a 3.37% increase. This is an all-time high after the April crash that brought the price of Bitcoin from $64k down to $28k. The move by El Salvador to be the first country that accepts Bitcoin as a legal tender and the social media campaign that leads to a surge in price ahead September 7 are a repetition of events that occurred late last year and early this year with regards to institutional investors and how the price of Bitcoin skyrocketed.

El Salvador, a country in Central America, has been preparing heavily to adopt Bitcoin by installing ATMs to allow citizens to convert the token into US dollars. Last week, the country’s Legislative Assembly passed a law to allow for the creation of a $150m Trust to support the conversion of Bitcoins to US dollars.

To promote the use of Bitcoin, the government states that it will give the adult population of El Salvador $30 in Bitcoin once they download “Chivo” the wallet issued by the government. This was confirmed by the Finance Minister, Alejandro Zelaya.

What this means for Bitcoin investors

Apart from the adoption by Salvadorians, on-chain analytics show that Bitcoin is in high demand. The fourth halving that occurred will make Bitcoin become a scarce token in the nearest future. Thereby increasing the price sporadically.

With El Salvador’s interest in Bitcoin, other countries are likely to follow suit- Panama is considering following El Salvador’s lead. History will repeat itself as this development will serve as another crypto rout that occurred early this year when Tesla and MicroStrategy announced their support for Bitcoin.

El Salvador’s new law allows the use of Bitcoin as a legal tender it can be used to buy goods, pay for taxes and bank loans. This means more demand for Bitcoin, with the fourth halving that occurred, it means less supply. A common rule of economics for demand and supply will apply. Prices are projected to keep rising. At the time of writing this report, Bitcoin is trading at $51,839 with a projection of $52k before the end of today and higher tomorrow when Salvadorians begin to use the token.

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