Global security breaches are on the rise and no one or country is safe. The acceleration of certain technologies has been rapid since the pandemic engulfed the world last year. But unfortunately, we’ve also become slack in the process.
Once again, it has become apparent just how ‘at-risk’ our data is.
Data hacks have been frantic and are now getting major press attention. It’s hard to know who each unwanted visitor is in each case but fingers are being pointed in perhaps familiar directions.
Russian invaders back at it again
In fact, throughout June, Russians have been blamed for a slew of hacks around the world.
Microsoft in late May said a wave of Russian cyber-attacks had targeted government agencies and human rights groups in 24 countries, mostly in the US.
It claimed that around 3000 email accounts of more than 150 different organizations, some of them international, were attacked in just one week.
Allegedly, the group responsible was the same one that carried out 2020’s SolarWinds attacks, which the Russian Foreign Intelligence Service (SVR) was accused of orchestrating.
But the Kremlin denied having any knowledge or anything to do with any cyber-attacks. It challenged Microsoft to how these attacks were linked to the European attacks.
Nevertheless, authorities are now aggressively investigating cybercrime. In the first week of June, the US Justice Department recovered around $2.3m in cryptocurrency ransom money.
This was part of the funds paid by the Colonial Pipeline Company to Russian hackers in the most disruptive cyberattack on record in the country.
The US deputy attorney general Lisa Monaco said investigators had seized 63.7 Bitcoins which was paid by the company after its systems were hacked, leading to massive shortages of petrol along the US’s East Coast. The department said it founded and recaptured the majority of the ransom.
The hackers are believed to be a group called DarkSide, whose menace caused a multi-day shutdown in certain petrol stations and a spike in gas prices.
The attack made international news and prompted the US’s White House to encourage business executives to improve security measures to avoid future cyberattacks whatever their nature, ransomware or otherwise.
The FBI said DarkSide had also disrupted operations at a meatpacking company. As no one tends to be spared in the spillover effects, it is always a good idea to protect your company’s digital assets as a preventative measure.
Not so sophisticated
The attackers rather proved to be quite ‘amatuerish’ because they sent the Bitcoins to an online platform to convert it to fiat money – and that is how they got nabbed. Server-hosted (Online) crypto exchanges are obliged to keep customer data for compliance and anti-money laundering practices. So while your Crypto digital wallet does not reveal your identity, pairing it with an exchange will link it to all the other particulars you needed to provide to use the exchange.
As long as you need cash to pay for things you will always need to switch your crypto in some way or another – unless your recipient agreed to take payment in Crypto as well. Keeping your digital assets on a hard-wallet or on your hard-drive keeps them “off-the-grid”. But also means you can’t actually spend them.
Although the initial cyberattack was a smart manuever, the attackers proved to be rookies at the robbing game in the end.
On a positive note: the ability to retrieve Bitcoins actually reinforces the need for a Blockchain-based financial system. This made it easier for the authorities to track movements of the ‘ransom-paid’ Bitcoins.
Cuban for a bruising
But politicians aren’t the only people who are urging businesses, civil society organizations, and other groups to improve security systems and be cognisant of an often-dark future.
US Dollar billionaire Mark Cuban has also called for stricter cryptocurrency regulations.
The owner of the Dallas Mavericks who has been investing in trading Bitcoin and other cryptocurrencies such as Ethereum said the world was in dire need of regulation for the burgeoning decentralized finance (DeFi) space.
Cuban said in an interview with Bloomberg that there “should be regulation to define what a Stablecoin is” in order for DeFi to be reliable and to prevent total collapses in investments.
This comes after he saw his investments in a particular Stablecoin ‘went to zero’. Cuban claimed he had been scammed.
Stablecoins are a type of cryptocurrency that is pegged to an underlying asset, or currency – usually the US dollar. They are the earliest forms of DeFi and the largest Stablecoin, Tether, is currently worth more than $62bn.
DeFi has helped the price of Ethereum, the blockchain on which most DeFi projects are built, to also soar. But they can be highly risky investments.
Investors try to create arbitrage opportunities and liquidity between coins but such a scheme collapsed for Cuban.
“There should be regulation to define what a stable coin is and what collateralization is acceptable,” he said.
Buy, Stake, and Trade Cryptos
Strong words of caution
Cuban hasn’t revealed how much money he lost but told a fellow DeFi investor via Twitter that regulation must be implemented- and quickly.
It had been suggested that Cuban was “rugged” which refers to when a project’s liquidity dries up and investors cannot withdraw their cash.
Mark Cuban is alleged to have 60% of his crypto holdings in Bitcoin, 30% in Ethereum, and 10% held in other coins. He likes to experiment with new financial tech investments.
He added further in a recent blog post that banks should be scared of unregulated DeFi technology.
All crypto-based investments remain highly risky as the technology around them develops. But there certainly needs to be global laws to prevent people from losing hefty amounts of their wealth/investment. Cryptocurrency is without a doubt a very lucrative investment vehicle that could make you an overnight millionaire. But that also makes it a perfect vehicle for scammers to clone projects to make away with your hard-earned cash.
You must, therefore, be extra vigilant and scrutinize offers for instant riches. But more so, you would be quite negligent these days to navigate the Internet without any form of cyber-protection.
The pandemic has thrown us into a state of flux and some tech entrepreneurs have found opportunities in the funk. One major trend involves playing with blockchain technology.
Even though most people you come across pretend to understand blockchain, many don’t actually understand its full capabilities. Some clever Trevors, however, are making it work for them.
DeFi (Decentralised Finance)
For centuries, our money has been controlled by central banks. But this has given too much power to certain authorities. Now cryptocurrencies are set to help us shake the game up.
Enter DeFi or Decentralised Finance – an umbrella term that refers to a variety of financial applications in cryptocurrency. These DApps are geared toward changing the roles of financial intermediaries or removing them altogether.
Essentially, DeFi is a financial system built on public blockchains such as Binance Chain, PolkaDot, and Ethereum.
It is a relatively new project which started later than Bitcoin in 2014. It was brought into the limelight in 2020 by a little-known South African called Andre Cronje. Cronje created the now almost billion-dollar DeFi-protocol called Yearn Finance (YFI).
DeFi is an alternative to what people feel is an outdated, clunky financial system that is inefficient and prone to abuse. The idea is that DeFi will be a new digital-only and fully automated financial system which exists separately from our enormous, interlinked financial system.
When you swipe your card, the institution has control over your transaction and retains the authority to record it in its private ledger, stop or pause it.
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They also control financial all matters like insurance, loans, and alternative investments like derivatives, crowdfunding, and gambling. All this while literally owning all your data. They can use or share them with their stakeholders as they wish.
Functionality
DeFi aims to create an open-source, permissionless, and transparent financial service system. The yields you get from borrowing and lending digital assets on these platforms also put those offered by traditional banks to shame. This system is also relatively safe because lenders are certain to get their assets back because you need collateral (other cryptos) to borrow in the first place.
You even, in DeFi, have mechanisms to maintain liquidity – just like Central Bank’s liquidity swaps. Some of them have ridiculous names like SushiSwap or PancakeSwap and perform these functions surprisingly well. this is possible because of their underlying computer-backed algorithmic technology.
The current centralized nature of the global financial system means wealth is only amassed by those that have access to financial services. This has created further inequalities in our societies.
Nevertheless, DeFi is a rapid technological innovation that is helping us to decentralize financial systems and foster financial inclusion. Cutting out the middleman also involves the use of Smart Contracts. Naturally prone to attach it is evolving but quickly gaining the acceptance of those ‘in the know’.
Smarter Contracts
According to Blockgeeks, a smart contract is a computer protocol intended digitally to facilitate, verify or enforce the negotiation or performance of a contract. They allow the performance of credible transactions without third parties.
For example, ordinarily, you would go to a lawyer or a notary, pay them, and wait while you get the document. With smart contracts, you simply drop Crypto into a vending machine-type structure (digital ledger), and your escrow, driver’s license, or whatever, drops into your account.
Courtesy: Law and Forensics.
Smart contracts define the rules and penalties around an agreement just like a traditional contract does. Additionally, they also automatically help you enforce those obligations.
Ethereum is the industry-leading Crypto company/platform that provides that functionality. It is, however, receiving strong competition from newcomer platforms such as Binance Smart Chain – which is actually a revised clone of Ethereum.
Non-Fungible Tokens(NFTs)
This is a technology that has been around for a few years but is enjoying new popularity. Fungibility refers to something that is easily interchangeable, such as the exchanging of a $50 note for five $10 notes.
But non-fungible tokens have been created with the opposite goal.
These are unique or scarce digital objects represented as tokens that cannot be replicated.
They are literally anything that can be digitalized to form a collectible item – just like your paintings, collectible cards, or stamps.
This is why they are infiltrating the auctioneering world. Digital content is tokenized through a process called minting.
Minting involves assigning a coin on a blockchain to any given work and you can assign as many copies as you so desire.
A key difference from authenticating other objects is that instead of a physical certificate of authentication, NFTs use blockchain technology as a verifiable digital ledger.
The NFTs created on Ethereum’s blockchain are immutable, so they cannot be altered. No one can undo your ownership of the NFT.
In 2017, a game called CryptoKitties was invented. This was a blockchain game that allowed players to adopt, raise, and trade virtual cats.
At one point, CryptoKitties were selling hundreds for thousands of euros. Since then, people have been pumping money into the NFT market which has more than quadrupled in value since the pandemic.
Investors saw the value of investing in a verified item of art that no one else possesses. As a result, many new digital (NFT) marketplaces such as OpenSea and SuperRare were established – and thriving. The NBA has also gotten in on the action. NBA Top Shot is a first-of-its-kind collectible website that allows you to collect, trade, and sell your favorite NBA highlights as digital tokens. One of the highest-selling NFTs there(only 2 minted) is one of a reverse dunk by LeBron James – which fetches a cool $210 000.
Rock band, Kings of Leon earlier in March 2021 became the first musical artist to sell its album as an NFT. Their eighth studio album, When You See Yourself, is being sold in standard digital and physical formats but also has an NFT.
Within a week, the album had made more than $2m. This includes around $500 000 which was donated to Live Nation’s Crew Nation, designed to support live music crews during the pandemic.
Enter the Dogecoin
The year 2021 wanted to add a bit of humor to the world whilst making some people rich. You may call them clever or maybe reckless – or both, but some people traded an invisible investment called Dogecoin and significantly pushed up its price.
Dogecoin was like a parody of Bitcoin symbolized by its face, the Doge meme. Entrepreneur Elon Musk punted the coin which was actually started as a joke in 2013. The price of dogecoin has exploded by more than 1,100% this year.
The cryptocurrency has gained increased attention from endorsements by Musk, who at one point was the world’s richest man on paper. Entrepreneur Mark Cuban, rapper Snoop Dogg, and musician Gene Simmons are also backers of the Crypto-coin.
Now Musk wants you to be able to trade Dogecoin using the Coinbase platform.
Musk’s Tesla motor car company had allegedly used the Cryptocurrency exchange to buy $1.5bn worth of Bitcoin in February.
The Gamestop effect
Also this year, online traders caused chaos among financial systems, showing big institutions that they can beat them at their own game.
A bunch of people got together on Reddit and discussed how they would pump up the price of Gamestop, a US rental games company. Gamestop saw its fortunes wane as people turned away from buying or renting disc versions of games in favor of downloads. The Reddit ‘movement’ was aided and abetted by a group called WallStreetbets.
The group has since pledged millions of dollars from the proceeds towards saving Gorillas – epic!
The price went through the roof as Gamestop became a gambling tool, with little underlying value in the company.
A number of people won big but others who got in late weren’t as lucky. The price later crashed, costing gamblers a lot.
It has since fluctuated wildly and is now on a downtrend. For every new multimillionaire, there has been someone who has lost their life savings.
Tread carefully with new technologies
It will take time for the use of these new technologies to settle in our society. You must, however, be skeptical even when Musk, who recently changed his designation from CEO of Tesla to ‘Technoking’ posts such things on a social platform.
Whenever he tweets something, people react. Musk convinced scores of people to buy Dogecoin and now he is quite excited about NFTs.
The Billionaire recently actually turned down a $1.1m offer to buy one of his tweets as an NFT after putting it up for sale, quoted saying: “it doesn’t feel quite right.”
Musk said that he was going to sell a tweet of a song about NFTs as an NFT. This was days after an NFT had sold for a record $69m. But it turned out he was joking around when he tweeted: “Actually, doesn’t feel quite right selling this. Will pass.”
Musk’s tweet was listed on the blockchain-backed auction platform valuables and has attracted a bid of $1.12m from a user called @sinaEstavi.
The tweet is of a techno song about NFTs, with the lyrics: “NFT, for your vanity, computers never sleep, it’s verified, it’s guaranteed.”
If you don’t believe how volatile these currencies are, just check out how Bitcoin lost more than 80% of its value from December 2017 to May 2018. It is currently hovering just below $60,000 after a low of around $3,500 only in March 2020.
If you decide to invest, do so knowing that rapid price fluctuations come with the territory.
Remember these new blockchain assets are highly volatile investments. Their values can swing literally like a yoyo, based on the jokes made by a multi-billionaire who wants to live in space.
People will always find an opportunity in a crisis. This year has been one of the strangest years we will ever experience. Because of the global pandemic, we have been ‘shut-in’ physically and mentally. Hiding in our homes in an effort to save the lives of the elderly and sickly.
Technologies that enable people to communicate with each other from different locations and work remotely have had an excellent year because of this.
Who needs phones & email?
The pandemic may have stopped us from having face-to-face meetings because of self-isolation and social distancing. So just like that, we all needed to have online meetings and digital collaborative meetups.
In 2020, we just stopped phoning people. We needed to see what other humans looked like. So, we engaged more in video calling, using whatever technology available that supports that functionality.
The online video-conferencing tool Zoom, therefore, went from being a company you’d probably never heard of, to global ‘overnight’ success. It was founded in 2011 by Eric Yuan, a former Cisco engineer, and executive, who then launched it in 2013 as software for companies. It was valued at $1bn in 2017 because it enjoyed very strong revenue growth and was easy to use, and became profitable in 2019, and listed on the Nasdaq.
“You’re on Mute! “
Quote of 2020
Come early 2020, Zoom entered a boom period as most of us used it while in quarantine. Its share price, therefore, grew more than 490% from $68.72 to around $406.
MS Teams, Microsoft’s answer to Zoom. is believed by many to be more reliable and secure than Zoom – which suffered a major breach earlier in the year. Google’s Meet also features on the list of top video calling/conferencing apps.
We won’t delve into comparison here. The pros and cons are highly dependant on what you use it for and your business size/budget. The usage stats below speak volumes though albeit just for the two major economies.
Other tools
When we weren’t working, we were using social communication applications such as House Party which, apart from allowing you to stream music and play virtual DJ, enabled you to play games with one another.
They were mostly silly general knowledge games but hangman made a welcome comeback to society thanks to this app.
Discord, an American Voice over Internet Protocol (VoIP) that uses instant messaging and runs a digital distribution platform also gained new users. It no longer just relies on gamers and people in creative computer development roles to drive its usage.
The Home Office
We started (forcibly) working from home and those who believe it made them more efficient and productive are considering carrying on with it in 2021. The working from home concept, therefore, changed from being something associated with putting in half the effort and lazy lie-ins.
Companies at least in the developed world, have to offer the option of working from home. Like any viral pandemic, Coronavirus will still be around in 2021 as the vaccine could take a while to ‘take effect’. Working from home isn’t disappearing any time soon!
To operate a home office though, you need to have an advanced enough computer system, the right anti-virus software, and other methods of securing your work. Companies became concerned that people were using their personal computers to log onto work servers and bringing problems along with that. It’s not just good enough to get a laptop to have a ‘home office’.
We have also had to set up reliable phone systems for business. Landlines are becoming old-fashioned plus virtual phone systems that are simple to set up and use are becoming popular.
Smart speakers are also becoming popular. You can use them to play music via Spotify or the radio but can also be used to create the right audio ambience for your meetings and remind you about important events, tasks, and meetings.
It’s all about getting tech products and virtual assistants to make working easier. People also invested in better desks and other office accessories such as computer or mobile-phone-operated coffee machines. Yes, those do exist! Expect the internet of things (IoT) to play a bigger role in your life next year and beyond.
Cybercrime on fleek
Naturally, because we are all forced online, this is no better time for cyber-thugs. They have upped the ante with cleverer ways to dupe you out of your already diminishing funds. Here some of the highlights of 2020 when it comes to crime on the web according to cybersecurity provider ID Agent:
–A cyberattack is attempted every 39 seconds. -700 million people in 21 countries experienced some form of cybercrime. –The damage related to cybercrime is projected to hit $6 trillion annually by 2021. -Ransomware attacks rose 148% in March 2020. -Cloud-based attacks rose 630% between January and April 2020. -Two in five SMBs have been the victim of a ransomware attack. -More than 80% of reported cyberattacks are phishing. -Phishing attempts have increased by more than 660% since March 1, 2020. -Organized crime gangs account for 55% of attacks.
The rise of AMD
Chipmaker AMD has had a stellar year as it has brought out some of the most advanced (yet affordable) computer chips ever built and has managed to outshine rival behemoth, Intel.
Its share price on the Nasdaq bounced from $49.10 to about $95.92. The company has been a runaway success story, especially over the past five years. At the end of December 2015, AMD stock was a paltry $2.87, that’s 3242% growth in half a decade!
Another contributing factor for the company’s success is that AMD’s Ryzen line of processors has been a huge hit since its release. They are used in some of the best mining CPUs money can buy.
Mining is the process of acquiring Bitcoins and other Cryptocurrencies using special software together with your PC’s hashing power.
Crypto makes a comeback!
Cryptocurrencies Bitcoin and Ethereum experienced returns of more than 216% and 390% year-to-date respectively. The argument is that institutional investors including some of the world’s largest finance houses and banks are now backing the world’s most popular digital currency.
This is despite the fact that most ‘9-5 people’ are not using Bitcoin to buy much on a daily basis – but this trend is changing. It is still purported to be a means for criminals and drug dealers to help avoid banking authorities from checking their transactions. Or maybe that is just an underground rumour (or FUD) created by the fearful banking system.
But seriously, a few things are speculated to be behind the Crypto surge. The US Federal Reserve cut interest rates, loaned more than $1.5 trillion to banks and financial institutions. It also increased its purchases of US treasury securities to stabilize the economy when the pandemic struck. This response was very strong and helped to weaken the effects of a national lockdown on the largest economy in the world.
These actions created a favourable ‘macro environment’ in which to invest in an asset that is perceived as very risky given its lack of use and lack of clarity around what it can be used for. The high returns compared to Gold, interest-bearing and other traditional assets have certainly got the major asset managers excited.
The second trend that propelled cryptocurrencies was the above-mentioned expansion of digital life. This may have lead to more investors feeling comfortable using a digital wallet. From payment systems, storage, finance, to gaming, gambling and sports: There is now literally a crypto-based coin for anything under the sun! This digital transformation has even prompted global Central Banks to seriously consider a move away from paper money.
The Future
Our lives are progressively going digital. Many older people who had never used a computer to shop online before, did so for the first time in 2020. They also using messaging apps for the first time as well as streaming entertainment services such as Netflix, Hulu, Amazon Prime, and Disney Plus.
To sum up, the year 2020 has been an abomination of a year. Who knows what 2021 will bring? Maybe (tech-driven) Tesla stock will keep on rallying after successfully listing on the S&P500. But maybe also because owner, Elon Musk kind of took an interest to Bitcoin. This year has indefinitely made us aware of two things: proper sanitization and the practical use of computers.
The world is slowly realizing that it needs to rely less on old systems in order to manage its way out of financial crises. One of the oldest systems which saw the US dollar as the vehicular currency of the world may be slowly coming to an end.
Enter the Bitcoin: the brainchild of cryptocurrency, a means of exchange that is less regulated and which is built on the Blockchain, a technology that is supposedly difficult to hack into.
A quick recap for those of you not familiar with the tech: A Bitcoin is a computer file that can be stored in a ‘digital wallet’ app on your smartphone or computer. With this technology, every single transaction you make is recorded in a public list or publicly distributed ledger.
This makes it easier for authorities to track and record your transactions but not you personally. We will not, however, get into the potential abuse of such anonymity in this article.
Adoption
We have been very slow to adopt new financial technologies for two reasons. First, there are many regulations that help maintain the US dollar as the vehicular currency, used by central banks and other financial institutions to secure assets. Second, many developers of the technology are hesitant to throw it upon us – yet.
But this will change as the robustness and reliability of cryptocurrencies is proved study by study and case by case. One method is by using cryptology.
Cryptology is used to protect your information from hackers. In fact, the protection of your data is more important than ever before. We have made our lives more public thanks to social media.
While you may not mind so much if hackers get unauthorized access to your pictures and social media profiles, some information is actually valuable. This includes your banking details, birth certificate, licenses, and intellectual property.
The Covid-19 pandemic has forced us all to work from home. Those employees of numerous companies are accessing commercial information using personal computers instead of office computers. But personal computers might lack anti-virus software, firewalls, and other security measures.
Right now, cybercrime is costing companies at least $45bn a year worldwide.
This is why now is cryptology’s time to shine. It will also be used to protect your online purchases made using cryptocurrencies instead of traditional money. It will help ensure that funds go from your bank account to a retailer’s quickly but securely.
Using Crypto for daily activities
Let’s face it, we are going to use Blockchain for shopping: Lamborghini already accepts purchases in Bitcoin. The concept might still be difficult for you to grasp, but they are still being developed and soon it will be near impossible to live without them.
Gaming companies are already embracing cryptocurrencies. Fortnite, a popular online game, with more than 250-million players, allows you to buy in-game products using cryptocurrencies.
Beyond regular shopping, you could soon buy a house using a cryptocurrency. Blockchain technology and the underlying distributed ledger technology is being used to increase transparency in real estate transactions using smart contracts.
To reiterate the use case for Crypto, many countries like Germany are relaxing laws and giving licenses to allow ‘Crypto Banks’ to operate. This is one effort to ensure that your Cryptos are properly taxed when used for investment purposes.
One such bank, Bitwala, allows you to purchase Bitcoins or Etheruem securely and quickly from a charges-free bank account which they provide.
Your transactions are then documented so that you can seamlessly submit reports of the purchases to the local tax authorities (Finazamt) to avoid penalties. You can do this all directly from the Bitwala App.
The blockchain and cryptocurrency are even being explored on national levels: China is allegedly creating its own national digital currency.
The way forward
Monetary systems will continue to be tested every day. Banks the world over are spending big bucks to protect themselves from hacks. But one day, a hacker could throw them into turmoil.
When that happens, you might be unable to withdraw your money. A central bank’s database could be hacked making it difficult for it to work with other banks. In the meantime, alternatives to classic monetary systems need to be developed.
Cryptocurrencies backed by cryptology could be a very strong alternative. There are also some valid cases for using Bitcoin as a global currency. This, however, will only become a reality if it shakes off its high trading volatility to become more stable.
We live in a world where we need to be cognisant of our health and how viruses can spread easily and quickly like wildfire. It equally is imperative to realize that cyber attackers could get and infect our data just as swiftly. Using modern technologies can help prevent these intruders from creating a ‘digital security collapse’ pandemic.
Did you know that there are still more than 700 million people in the world who live in extreme poverty? These people must scrimp, starve, and struggle to survive off less than $1.90 per day.
By 2030, the World Bank estimates that more than 90 percent of those people will be concentrated in Sub-Saharan Africa.
This is perhaps one of the greatest developmental failures of the modern world. Despite the continent’s expansive natural resources and increasing connectivity, foreign actors still feel it’s too risky to heavily invest in their markets.
Blockchain could be the key!
Bitcoin and “Blockchain” were created in the mass wave of distrust in banks after the 2008 financial crisis. Therefore, the technology enables individual, distributed data storage that could become the perfect evidence (trust) base and financial infrastructure for a developing country.
With the right implementation, Blockchain holds the potential to completely revolutionize and revitalize such economies, especially in Sub-Saharan Africa.
So, what is this Blockchain?
Blockchain is essentially a kind of decentralized database that allows you to have a safe, secure way to handle their data without the need for third parties.
For example, you could with Bitcoin, make or accept payments in real-time without needing a centralized bank.
“[It is] a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer,” said software entrepreneur Marc Andreessen.
“The consequences of this breakthrough are hard to overstate.”
Historic background
Until the mid-twentieth century, most of Africa was ruled under a colonial system meant to exploit the people and their natural resources for European benefit. Africans, in addition, were rushed into development according to European standards rather than homegrown ones.
The legacy of rapid development, distrust and corruption left behind an economic system failing to recover in the 21st century.
While the World Bank celebrates a decrease in global poverty levels, the number is expected to remain stagnant in Africa. Today’s poorest people are living in places with the least economic growth.
Sadly enough, poverty and lack of investment in many developing countries stem from how they were integrated into the world system.
The land was cut into countries according to European treaties and agreements, rather than by traditional and tribal land divisions. This situation worsened upon the handover of colonial power to so-called “democracies.” Power often shifted to the ethnic groups that former colonizers favoured.
Corruption multiplied in the form of bribes, political persecution, rigged elections, and a massive wealth gap. All of this still affects the wealth distribution and investment potentials of many developing countries.
Of course, this created a lack of trust in banks and government throughout much of Sub-Saharan Africa.
The perfect fit for Africa
During a 2012 study conducted in rural Western Kenya, Stanford University researchers waived the costs of opening basic savings accounts for a number of unbanked individuals.
While 63 percent of the subjects opened an account, only 18 percent of them used the accounts. This was likely due to three factors: a lack of trust in banks, unreliable service and prohibitive withdrawal fees.
Unfortunately, the prevalence of unbanked individuals in the informal sectors scares off foreign investors, who heavily rely on transactional evidence to make investments. Otherwise, pouring money into markets is too risky. That’s where Blockchain comes in.
How would it work?
Blockchain can host an entire evidence base of transactions, loan repayments, and asset titles. The technology is also decentralized and requires individual confirmation, creating an element of trust and transparency beyond traditional banking systems.
According to Victor Olorunfemi, Director of Products for Pan-African tech and crypto-exchange, KuBitX, Blockchain’s major benefits lie in “frictionless P2P and cross-border payments, transparent elections, land registry management [and] transparent crowdfunding.”
Let’s look at some of the different ways Blockchain could benefit developing economies, especially in Sub-Saharan Africa.
1. Creating financial infrastructure and accountability
According to a study by the Milken Institute, viable financial markets require consistent, accurate data on assets and credit histories. Luckily, Blockchain may fulfil these needs.
The use of Smart Contracts technology is ideal in areas lacking accountability, such as the real estate or land/agricultural sectors. In Africa, a lack of record-keeping practices often leads to “missing” or non-existent title deeds. In some cases, this is intentional.
Title deeds “go missing,” only to end up in the hands of benefactors other than the rightful owners. Smart Contracts could eradicate these issues through the use of special tokens that cannot be duplicated, changed or removed. See the article on tokenization.
Likewise, Bitland, a company in Ghana, currently helps individuals record deeds and land surveys. By resolving land disputes, Bitland creates more stability while accurately recording land asset data.
“There’s a massive number of people in the informal sector, but there’s not much data being collected on them right now.”
Merit Webster, co-president of the MIT Sloan Africa Business Club.
“That means you don’t have that credit history or payment history for them. If you have a decentralized approach to collecting data, you end up with more malleable data. [This] is very valuable for creating credit histories.” The agricultural industry also has the potential to thrive using Blockchain.
“Blockchain could be used to track goods around the world. This allows farmers to earn a fair wage for their goods.”
Also, farmers could use record-keeping technology to streamline the supply chain and document resources. This would lead to better efficiency, lower transactional costs, and improved logistics.
2. Security in banking
According to the World Bank, there were 1.7 billion people with no bank account in 2017. This situation is worst in developing countries, especially African ones. For example, over 62 million of these people lived in Nigeria.
Besides, data from Google Trends reveal that Lagos, one of Nigeria’s biggest cities, ranks globally as the number one city based on the volume of online searches for Bitcoin (BTC). Clearly, for the city’s 21 million-odd people, there an immense interest in some form of an accessible payment system.
Of course, it’s unrealistic to expect bank branches to magically appear in every remote corner of the world. However, a digital database using Blockchain technologies has the potential to reach far beyond physical banks.
Ad: N26 Bank
Many Africans value trust and transparency. In developing countries, this lack of trust goes beyond the Internet. Developing countries with less industrialization tend to have higher levels of corruption.
This reduces national investment opportunities in the public sector and instills a lack of trust in centralized oligarchs handling an international investment.
Because its power lies within the community of users, Blockchain can combat these trust issues. All data logs and amendments must pass through this community and identification confirmation tests.
Blockchain technology also secures your data incredibly. Hacking and data breaches are all too common nowadays. In 2017, for example, around 3 billion Yahoo user accounts were stolen.
When information is stored in the same place, hackers have one, easy target. In contrast, Blockchain is a distributed entity. This dissemination of data leaves it far less vulnerable to cyberattacks.
3. Fostering Entrepreneurship
Coupled with the Internet, Blockchain technology could be the perfect platform for aspiring African developers. Because the ‘source code’ is free of charge, skilled coders can adapt, create, and configure special applications, called DApps.
These are available on Crypto platforms and provided by companies like Ethereum, and a South African firm specializing in what they called the Keto-Coin.
Rather than waiting for governments to drag their feet trying to create jobs—individuals on the continent can form small firms that build and sell Crypto-based Apps locally or abroad.
“Despite the frictions and impediments mentioned,” said Olorunfemi. “Blockchain can still provide an avenue for promising African tech projects to access capital (FDI) via token offerings on digital assets exchanges.”
Many courses are even readily available online to quickly learn about new technology. Microsoft, for instance, offers a platform via Azure for you to build and learn about the Blockchain.
One-man shops in countries with unfavourable economic systems, like Zimbabwe, can also adopt smaller, stable, Cryptocurrencies to facilitate or payments. In cases of rampant inflation, they can temporarily act as a store of value or help you pay for things until your currency stabilizes.
As with the Venezuelan hyperinflation case study, Cryptocurrency intervention could help many developing countries troubled with economic instability.
There is also the option of Crypto-mining. But before you pull out the ‘high-consumption energy’ argument – think outside the box for a moment. What about energy sources that are free and available nearly 24/7? Like water and the sun!
The African continent is full of capable scientists and mechanical engineers. One could build special solar-powered energy centers to power Bitcoin-mining.
And without the expertise, governments or private companies could alternatively just invite Crypto companies with abundant financial resources to mine (cleanly) for a special tax/fee while creating jobs for the locals.
4. Elections
In addition to the financial side of things, Blockchain technology could help eliminate some forms of corruption. For example, many African countries’ elections are incredibly vulnerable to the social scourge. In some extreme cases, some officials change or forge written ballot votes to rig elections.
To combat this, Blockchain databases could record votes. This makes it nearly impossible to tamper with using Smart Contract technology. Having fair elections improves infrastructure, which then increases development and economic dependability.
While some might see Africa’s economy as underdeveloped, others might see it as a blank canvas well-suited for a large-scale implementation of Blockchain. Economic and governmental systems are shifting and slightly shaky in many Sub-Saharan African nations.
The challenge is to foster a rigid economic system to implement Blockchain.
Don’t just take our word for it—African nations have often implemented new, practical technologies before the Western world. Let’s look at the example of M-Pesa. Back in 2014, Americans and Europeans were amazed by Apple Pay’s launch.
However, this mobile payment system wasn’t exactly “new.” By that time, Kenyans had used M-Pesa, a very similar technology, for years.
“There’s a lot of opportunity to leapfrog the way the West developed and have these more unique African solutions, but it needs to come from within,” said Webster.
“It needs to come from entrepreneurs in the continent who want to implement these solutions. It’s important to engage people very early on. Systems incubated in the West don’t stand as great of a chance to work as African ones do.”
Concluding remarks
With the possibility of an experimental, large-scale takeover of Blockchain technology to improve African infrastructure, the nations there could leapfrog in development and growth.
This must begin internally. According to Olorunfemi, “Education—of policymakers and other stakeholders—which is often ignored has to be a critical factor in paving the way for the acceptance and adoption of new technologies and the accompanying investment.”
The results in Sub-Saharan African countries could help eliminate much of the world’s poverty. It would also remove remnants of mistrust and corruption left behind by the days of colonial exploitation.
While there are some obstacles to large-scale Blockchain implementation, we can’t think of a better benefactor than there. The possibilities for business using the Blockchain are endless!
To learn more about how to get started with Cryptocurrency mining or purchasing, visit our resources page for useful links and guides.
Additional input by Bobby Quarshie (BQ).
Citations: Christopher Lee and Jackson Mueller.
Swan, Melanie. “Anticipating the Economic Benefits of Blockchain.” Technology Innovation Management Review 7.10. Oct. 2017.
Bitcoin Lessons from Venezuela, Where Hyperinflation Reigns. Online Source: https://www.lathropgage.com/newsletter-237.html
Like a biological virus mutates – as technology advances so do the complexity of phishing and identity theft schemes. With major services adopting cloud technologies and storing private data online, anyone is vulnerable to hacking.
To make matters worse, hackers continue to come up with some pretty creative ways to profit from stolen information.
Without wasting time, these are the things you should already be doing to avoid being exposed to hackers in the first place:
In order to keep these cyber-criminals out of your lives and computers, let’s take a look at some of the actual schemes to watch out for in 2019.
Hacking
We all know what hacking is by now – the term has almost become synonymous with internet security. So a question is: do you love watching movies on Netflix or jamming out to your summer playlist on Spotify? If the answer is yes, then you’re at a pretty high risk of getting hacked.
DynaRisk, a UK cybersecurity firm, recently found that cybercriminals most commonly target these brands, along with adult-oriented sites (you know what we mean) and then, online gaming services.
Identity Theft
A few weeks ago, authorities caught a New York-based gang who had used identity theft to steal over $19 million worth of iPhones. Quartz reported that this operation ran for seven years.
So-called “Top Dogs,” the ring leaders, would organize lower level members of their organization to steal identities and create clone credit and identity cards. Then, affiliates fanned across the nation, signing up for mobile phone plans to acquire iPhones, which were later sold for a profit by the Top Dogs.
Because phone payment plans take the shape of nominal fees over the course of several years, victims often wouldn’t notice the fraud until it was too late. Learn how another scheme dubbed sim port attackworks in the diagram below:
Ransomware
Hacking can happen to anyone – including our favorite bands. In early June, a hacker managed to steal the minidisk archive of Thom Yorke, the lead singer of Radiohead. This included previously unreleased demos and audio material from around the time of “OK Computer,” the band’s 1997 worldwide hit album. The hacker then demanded $150,000 on the threat of releasing it.
Holding files for ransom is so common nowadays that it even has its own name: “Ransomware.” Either pay over the ransom or lose your files—or, even worse, have them released onto the unforgiving Internet.
In response, Radiohead released all 18 hours of material on Bandcamp themselves, winning against these ransom hackers.
Most security experts recommend the same route as Radiohead—never pay the ransom, because there’s no guarantee you’ll recover files or prevent their release.
Sextortion
If you think ransomware is bad, there’s an entire subgroup of it aimed to profit off sexual shame. Cheekily named “Sextortion,” some hackers creatively upgraded the classic email phishing scam to scare victims into handing over Bitcoin.
According to Fortune, hackers have already racked up over $900,000 with sextortion. In these phishing emails, the sender claims to have spied on you while you watched porn—and has webcam footage of the salacious deeds. The message then demands a Bitcoin ransom, or else face the social and professional consequences of this lewd video getting sent to all your contacts.
To make the threat even more believable, the sender references a previous password tied to the user’s email account. According to Krebson Security, a sextortion phishing message might look a little like what’s written in the sidebox.
In rare cases, the threats are real—and hackers get their hands on some sexually explicit photos. Recently, American actress Bella Thorne fell victim to sextortion. Last Saturday, she took a similar, albeit more risqué, route as Radiohead, opting to release her nude photographs on Twitter in order to take the power away from her hacker.
Last thoughts
So, what’s the best way to avoid your personal, or, business from costing thousands in virtual currency? Since most of these emails are fake, you can just avoid them with a spam filter. And you should probably buy a webcam cover…just to be safe. When it comes to general browsing- we suggest using a VPN.
There are now more secure anti-hacking tools that use the Blockchain and offer great protection, especially against identity theft. Have a look at our feature on Tokenisation.
Most online services now like mobile banks, offer App-based 2-factor authentication. This should now be regarded as the minimum security for ANY online account or App.
To avoid hacking or phishing scams in general, optimizing your cybersecurity and using online common sense will save you loads of time, trouble and money.
The latest abbreviation in the finance and crypto-world is ‘ICO’. This word, however, gives global financial authorities like the U.S. Securities and Exchange Commission (SEC) nightmares for several reasons.
Not to be confused with Initial Public Offering (IPO) which is used by firms to raise cash through the issuing of shares to the public. An ICO (Initial Coin Offering) works like crowdfunding, but for digital currency and tokens.
We recently covered a feature on raising funds and capital for a business but missed out on one relatively new method. Many companies are using ICOs to raise capital for their businesses.
Why ICOs?
The concept of an ICO works similarly to how a company raises capital through shares in that it is all based on contrived value.
Funding raising in effect boils down to sales! If your actual product or service has nothing substantial or intrinsic to offer a client base, then it is nothing more than a scam.
Launching an ICO is quite easy, and to an extent, many tech companies are now catching onto it.
An ICO is the cryptocurrency space’s rough equivalent to an IPO in the investment world. ICOs act as fundraisers of sorts; a company looking to create a new coin, app, or service launches an ICO.
The alarming spurt rate of ICOs often brings with it a scourge of potential scammers. The SEC and other institutions have to step in to monitor and regulate them.
Social media platforms like Facebook and Google – which house a bounty of users (potential investors) have banned ICOs ads due to possible prey on unsuspecting investors; exposing them to con artists.
Basically, the scammers use fancy websites, laden with impressive figures and terminology to con users into buying into their coins or tokens.
Though the tokens barely even cost a cent, it adds up if they have millions of people buying in. Once they have reached a certain amount in funding – they close shop and disappear!
To create a new digital coin:
Create a product conceptor Business Plan for the coin or what is called a Whitepaper. This describes in great detail what the coin or token aims to do; the core technologies behind it; the team and their qualifications; the product’s lifecycle/growth path etc.
Once completed and water-tight, the whitepaper would besubmitted along with an application to one of the best Cryptocurrency Exchanges for review.
Naturally, you would need some initial working capital for liquidity. Some of this is raised through your savings and others through institutions (via loans etc).
You must then assure your investors of a solid return on investment (ROI) and deliver – which goes back to sales. Unless your offering is a scam, you actually need to do some work!
This assurance comes via regular updates (marketing campaigns can have a tremendous or adverse impact on the uptake and price) on milestones reached.
The updates are also necessary to keep your investors abreast with progress and might convince them to increase funding.
Growing interest and the addition of more funds create demand for the coin/ token which, in turn, drives up the price and market capitalization.
Known as “China’s Ethereum”, and backed by Microsoft, Alibaba and the Chinese government, NEO uses smart contract applications. It does so, however, with the addition of decentralized commerce, digitized assets and identification. It enjoyed a considerable hike in token value from $0.03 to $88.20, NEO has big things coming with a 294,000% ROI.
Unlike Bitcoin, the second-most valuable cryptocurrency in the world has more functionality than just being a coin. Its ledger technology is used to build and deploy decentralized applications a.k.a. “smart contract” technology. Ethereum’s ROI has been nothing short of jaw-dropping at 230,000%. Having sold its tokens at $0.31, an Ether token now sits at a whopping $713, second in value only to Bitcoin.
The “premier privacy-focused cryptocurrency” enables users to send and receive currency worldwide with total anonymity. It is currencies like SpectreCoin that have most government tax offices quaking in their boots. If you had repurchased a token in November 2016, that puny $0.001 would be worth $0.64 today, or an ROI of 64,000%.
With Ark, collaboration is the name of the game. The platform’s SmartBridge is a lightning-fast ecosystem designed to integrate other cryptocurrencies into its blockchain. Investors were eager as any to buy in, and they have made a 35,400% gain given today’s token price of $3.54.
DGD, which stands for Digix Decentralized Autonomous Organization, is a self-governing community. It gives out grants to different projects which will promote the growth of the DGX network. At a current value of $346.88 per token, this gives them a return of 10,722%.
QTUM is an open-source value transfer platform which focuses on mobile decentralized apps or Dapps. QTUM is the world’s first proof-of-stake smart contracts platform. They hosted a highly successful ICO in March 2017, and since that time has seen an ROI of 6,400%.
The prospect can be daunting for a cryptocurrency investor looking to make money off new investment opportunities while remaining cushioned from fraudulent ICOs and dodgy coins and tokens.
As there is no guarantee that any cryptocurrency or blockchain-related start-up will be genuine or successful.
You simply need to be vigilant and take steps such as getting to know the core team, poring over the whitepaper with a big magnifying glass. Naturally, you should be monitoring the progress of the token sales.
Most importantly, you must just use common sense to gauge just how feasible the project is to ensure that you’re not falling for a scam.
Remember, if it’s too good to be true, then it isn’t true!
Bitcoin (Crypto in general) is here to stay and every day, financial institutions, celebrities, and artists are endorsing it. It also has intrinsic value otherwise companies (incl. Microsoft) accepting it as payment for goods and services are either ballsy or just plain stupid!
Dealing with Cryptocurrency has its interesting dynamics. There are, however, many hidden facets making it still a mystery to the masses. Not knowing about it makes you prone to, get rich-schemes or outright scams.
We are all by now aware of the mania caused by the soaring prices and then, the subsequent decline that followed early this year.
What we don’t pay attention to, however, is just how complex it is to physically “acquire” and store these Cryptocurrencies.
Mining coins can be described very basically as the process where users “or miners” become part of a Cryptocurrency network. This by making hardware (processors & graphics cards) available to support that specific network’s operations.
As a miner, you contribute towards the working of the Blockchain. The technology requires millions of calculations to validate transactions into what are known as public ledgers.
There are three main ways to mine these coins but we will not be highlighting them in this post. The matter to be covered here, however, is the business aspect: how the Blockchain has created a new line of commercial entities and ‘profit-takers’.
These modern tech “enterprises” offer you a specific or cluster of altcoins and tokens as a reward for helping them maintain their Blockchain.
Sounds like a win-win situation right? Or is it?
Mining is hard
If you have actually looked into the methods of mining, you will discover that only those with high-end hardware are able to produce enough energy to power the Blockchain. This is called “hash power” or “hash rate”. This is kind of like horsepower for cars, but for PC processing.
There are sites that illustrate how to calculate potential profits such as one conveniently called ‘what to mine’.
The opportunity cost of operating the customized computer systems (known as Mining Rigs), will have to be offset with the cost of acquiring hardware such as the Antminer S9i. Then there are energy costs associated with running the rigs for long periods of time.
Your profit would, therefore, be the balance of the costs versus the revenue involved in mining coins.
The mining profit = revenue (quantity multiplied by the price of the coin in local fiat currency). Then subtract the cost of the mining devices + annual electricity costs (measured in local currency per KWh).
The problem with going at it alone is that it is very hard to break even. You are also faced with a conundrum: the more powerful your hardware is, the more electricity it consumes.
It also takes a lot longer to acquire the coins which you are awarded by the respective blockchain network after successful hashing is completed.
To make it worth your while you would hope that the coin you mine’s market value exceeds the costs of the monthly/annual electricity bill.
Value proposition
There a now hundreds of these so-called Crypto/Tech companies spurting up by the day. Their modus operandi: to relieve you of the burden of the high electricity and hardware costs. This in exchange a monthly or once-off fee.
In return, they promise to mine coins and provide you with daily or monthly profits. They can do this because they presumably have more powerful mining setups and therefore, larger economies of scale.
Some of these establishments use big rooms, whole buildings or even warehouses to run thousands of mining rigs throughout the year.
The payments you make supposedly help them with maintenance costs and pay for the said electricity bills. They are also usually stationed in countries where the cost of electricity is very low.
You are likely to, however, run the risk of dealing with the occasional Ponzi-scheme – setup. Such companies dive at the opportunity to swindle those not familiar with Blockchain and Cryptocurrencies.
By dazzling you with the price increases and potential astronomical returns, they take your money and make a run for it!
The acquisition naturally, would have been when they were dirt cheap, and are now offering the residue to make more profit off unknowing investors.
A working example
How it would work is: let’s say you owned 100 Bitcoins mined in 2010 for the opportunity cost of $100 each (cost of electricity). You then sold half at the height of the Crypto ‘bull-run’ in January 2018 when they were worth $19 000 each. You would have been $945 000 richer.
So, with almost a million bucks in the kitty and another 50 units of coins (which would be now worth a lot less); the natural inclination would be to look at ways to make the extra coins ‘work for you’.
And what better way than to be your own boss and head a Crypto company! You can with your new setup, sell off the residue of Crypto coins in bits for profits in cash.
This is likely what some of these companies offering you coins for an opportunity to get Bitcoins. This under the false pretence of partaking in a ‘mining operation’. Meanwhile, in reality, the actual mining probably took place almost a decade ago!
All in all, do stay alert and do your research before parting with your money to join a mining pool or Crypto investment scheme!
Good explanation of what the declining BTC dominance means for other Alts
On August 11 2018, the Bitcoin dominance level (market share) touched 50% for the first time in 2018. However, the move didn’t come amid a Crypto market rally. In fact, the cryptocurrency space has been in free fall until mid-August, moving in a sideways trend since then.
