The Great Promise

Article by ThinkDecade | Reviewer Abidemi

“In the vast landscapes of Africa, where innovation aims to meet opportunity, a revolution is unfolding—one that holds the power to transform lives, reshape economies, and unlock the continent's boundless potential. At the heart of this revolution lies an emerging force that defies borders and challenges conventions: cryptocurrency. With its decentralized nature and disruptive technology, crypto carries within it the great promise of rewriting Africa's narrative, transcending barriers, and propelling the continent toward a future of unprecedented possibilities.

Imagine a world where financial inclusion is not just a distant dream but a tangible reality, where individuals who were once excluded from the traditional/global banking system now have access to secure and affordable financial services. Picture a landscape where entrepreneurship flourishes, innovation thrives, and wealth is democratically distributed. Envision a transparent governance system that ensures accountability, reduces corruption, and empowers citizens to participate in decision-making processes. This is the transformative power of crypto in Africa—a force that transcends traditional boundaries and embraces the limitless potential of technology” - The Great Crypto Promise for Africa!

Before Bitcoin, there was no hope. Africans had to grapple with being cut off from the global financial system. As it turns out, this exclusion was not due to difficulty but rather deliberate design. The fiat system has played a significant role in perpetuating this state of financial exclusion and economic disparity.

Crypto aims to liberate Africans from the woes of fiat. While there are many areas to explore with respect to the great promise of crypto for Africa. Three areas stand out and affect everything else.

1. Fix the Money, Fix Africa.

2. An Internet of boundless value

3. A cultural/philosophical evolution!

Fix the Money, Fix Africa - Bitcoin offers better money, hard and sound!

Money is both a social and economic coordination tool within all societies. Unfortunately, Africa's inheritance of the fiat monetary system post-independence rendered it helpless and dependent on the West. For a developing continent, Fiat money presents many insurmountable challenges such as inflation, devaluation, and manipulation. Inflation robs people of their purchasing power as more and more money is printed into circulation. This erodes the value of people’s savings, income and makes goods and services more expensive. Most Africans don’t have enough savings because they live on meager salaries. The very little they save too is wiped out by increasing inflationary rates. This has created a perpetual poverty cycle that is inescapable, leading to a dysfunctional society where all manner of social ills are perpetuated in desperate attempts to survive. fiat money also gives too much power to central banks and governments, who can manipulate the money supply and interest rates for their own political or economic interests. This leads to corruption, mismanagement, and financial crises, as well as interference with the sovereignty and autonomy of other countries. For example, many African countries have been forced to adopt the US dollar or the Euro, which limits their ability to control their own monetary policy and exposes them to external shocks and fluctuations. Fiat money has crippled Africa. This has been the nightmarish reality until Bitcoin!

Africa increasingly dominates the list of poorest countries in the world

Built on the principles of hard/sound money, bitcoin is money crafted to solve the horrors of fiat money.  Bitcoin is a digital currency that operates on a decentralized network of computers. It has a fixed supply of 21 million coins, this means that the monetary inflation of bitcoin, which is the increase in the number of bitcoin(money) in circulation, is predictable and transparent. Unlike fiat currencies, which are controlled by central banks that can print more money at will, bitcoin(money) is immune to such manipulation and dilution of value/wealth.

Some argue that bitcoin is the purest form of hard money ever created because it has zero elasticity. This means that the production of new bitcoins does not depend on the demand or price of bitcoin, but only on the mathematical programming of the network. Eventually, the production of new bitcoins will stop completely, making bitcoin the scarcest and hardest form of money in existence. It’s not surprising then, that Bitcoin has been the best-performing currency in the past decade. With bitcoin serving as a sound monetary base for many Africans, a new wave of financial opportunities and freedom unlocks. Imagine being able to send money to anyone anywhere - boom, frictionless cross-border transaction is unlocked. Think of all the benefits. E.g, Remittances play a vital role in supporting families and driving economic growth in Africa, the high fees and slow processing times associated with traditional remittance channels have been a significant barrier. Bitcoin, with its decentralized nature and borderless functionality, offers a faster, cheaper, and more efficient way to send and receive money across borders. It’s already happening!

Additionally,  Bitcoin has enabled new opportunities for trade, investment, innovation, and entrepreneurship in Africa, by lowering the barriers to entry and increasing the efficiency and transparency of transactions, offering a more resilient and diversified economy, that is less dependent on external factors or shocks

As we witness the transformative power of Bitcoin in fixing money in Africa, it becomes clear that this digital currency has the potential to revolutionize the way Africans transact, save, and build wealth. It offers a pathway to financial autonomy and economic empowerment, liberating individuals from the limitations of the traditional banking system.

But 👇🏾

An Internet of Boundless Value: Web3, Ethereum and the EVM Ecosystem

In the realm of crypto, Bitcoin may have paved the way for a decentralized and borderless financial system, but Ethereum and the Ethereum Virtual Machine (EVM) ecosystem have taken the concept to new heights. They embody the vision of Web3, a paradigm shift that goes beyond just cryptocurrencies and encompasses a whole new internet infrastructure.

At its core, Ethereum introduces the concept of programmable money, where individuals and organizations can create and deploy their own custom tokens and smart contracts on the blockchain. This opens up a world of possibilities for financial innovation, enabling the creation of decentralized exchanges, lending and borrowing platforms, prediction markets, and much more.

Ethereum's true power lies in its ability to serve as a foundation for a decentralized, autonomous, and interconnected web. It provides the tools and infrastructure for the development of decentralized applications (dApps) that operate without central authorities, censorship, or single points of failure. These dApps run on the EVM, a virtual machine that executes code across a network of computers, ensuring trust and transparency.

Image source

Through the Ethereum ecosystem, developers can create decentralized applications that leverage the power of blockchain technology to solve real-world problems. From decentralized finance (DeFi) protocols that enable lending, borrowing, and yield farming to decentralized governance systems that empower communities to make collective decisions, Ethereum has become a breeding ground for innovation open to anyone to build on top of. We have begun to see how Africa is leveraging this infrastructure to build custom solutions that address real-world problems.

Moreover, the Ethereum ecosystem has spurred the development of innovative concepts like yield farming, liquidity mining, and decentralized lending protocols. These concepts incentivize users to contribute their assets to liquidity pools, earn additional tokens as rewards, and participate in the governance of these protocols. This unlocks a global pool of capital and means by which Africans can deploy capital to build wealth.

By creating a borderless financial layer of finance Legos, Ethereum has not only revolutionized the way financial transactions are conducted but has also laid the foundation for the Web3 vision. A future where the internet is decentralized, where individuals have control over their data and digital identities, and where peer-to-peer interactions and trustless transactions are the norm.

The Web3 vision is especially powerful for Africa, a continent that has long suffered from the limitations of traditional systems. It holds the promise of financial inclusion, transparent governance, economic empowerment, and technological innovation. By embracing Web3 technologies, Africa has begun to leapfrog traditional barriers and tap into the vast opportunities presented by the decentralized internet.

The Individual Sovereign African: Signaling Awareness Socially, Culturally, and Philosophically

Crypto's impact in Africa extends beyond the realm of finance and technology. It is signaling a profound shift in social, cultural, and philosophical paradigms, empowering individuals to embrace sovereignty and challenge existing systems.

Culturally, crypto nurtures and celebrates Africa's diverse heritage. Blockchain technology facilitates the creation and trading of non-fungible tokens (NFTs), which can represent unique digital assets such as artwork, music, and cultural artifacts. This opens up opportunities for African artists and creators to preserve their cultural expressions, assert ownership rights, and monetize their work directly, bypassing traditional gatekeepers.

Philosophically, crypto challenges conventional notions of trust, authority, and power. It encourages individuals to question centralized institutions and reevaluate existing social structures. The principles of decentralization, transparency, and individual sovereignty embedded in crypto align with Africa's rich communal values and self-determination history. By embracing crypto, Africans are redefining their relationship with money, governance, and self-governance, fostering a philosophical transformation grounded in autonomy and empowerment.

The great promise of crypto in Africa goes beyond financial and technological advancements. It represents a transformative force that is reshaping social dynamics, preserving cultural heritage, and catalyzing philosophical shifts. By embracing crypto, Africans are signaling their readiness to challenge existing systems and forge a path toward greater sovereignty, empowerment, and self-determination. This is why crypto persists despite external attacks. But there’s an existential threat.

The Biggest threat to crypto is crypto

Despite the many challenges faced by crypto suggest as regulation, infrastructure deficit, government pushbacks, lack of proper education,  and more, the biggest threat to crypto is crypto itself. As the value and popularity of cryptocurrencies increase, so do the challenges of maintaining a decentralized and secure system that can handle large volumes of transactions. One of the main challenges is scalability, which refers to the ability of a network to process more transactions per second without compromising on speed, security, or cost.

Currently, most cryptocurrencies suffer from scalability issues, which result in high transaction fees and slow confirmation times. For example, Bitcoin can only process about 7 transactions per second, while Ethereum can handle about 13 transactions per second. These numbers are far from sufficient to meet the growing demand for crypto transactions, especially in the decentralized finance (DeFi) space, which involves various applications that offer financial services without intermediaries. High transaction fees and scalability issues pose a significant challenge to crypto widespread adoption. While cryptocurrencies promise a decentralized and efficient financial system, the reality of high transaction fees often undermines this potential. For instance, Bitcoin, the pioneer of cryptocurrencies, has been plagued by escalating transaction fees, making small transactions impractical. Similarly, Ethereum, known for its smart contracts, has seen gas fees skyrocket during network congestion.

*From Vitaliks’ “The Three Transitions” *

These fees create a barrier to entry for many users, particularly those in developing regions who stand to benefit most from these technologies. Moreover, they contradict the very essence of cryptocurrencies - to provide a low-cost, inclusive financial system, making this the biggest threat to the Great Promise of Crypto for Africa!

But.. there’s hope! The Calvary is here, they are the Rescue chains, and they promise to scale, cheapen transactions and see this promise to the end!