A decentralised solution

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 around 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, however, could be the key to changing that! 

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 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?

How Blockchain works

Blockchain is essentially a kind of decentralized database that allows individuals to have a safe, secure way to handle their data without the need for third parties.

For example, people with Bitcoin can 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.”

Why Blockchain could be the perfect fit for Africa

Until the mid-twentieth century, most of Africa was ruled under a colonial system meant to exploit the people and the resources for European benefit. However, they 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,” where 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 which still affect 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. During a 2012 study conducted in rural Western Kenya, Stanford University researchers waived the costs of opening a basic savings account 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?

SmartContracts


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 cryptocurrency 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.

Blockchain has the potential to build up individual credit histories, as well. An individual could record on-time bill repayment or smaller transactions to obtain loans.

“There’s a massive number of people in the informal sector, but there’s not much data being collected on them right now,” said 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.

“In the case of small-scale farmers, Blockchain technology helps with transportation logistics,” said Webster. “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—especially for commercial farming activities that invariably contribute to exports.

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.

N26 Bank
N26 Bank

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.

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 instils a lack of trust in centralized oligarchs handling 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 its 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 adopt, create and configure special applications, called DApps, via Crypto platforms provided by companies like Ethereum, Tron and even a South African firm specializing what they called the Keto-Coin.

Rather than waiting for governments to drag their feet trying to create jobs—which they tend to do—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 (and even non-tech) projects to access capital (foreign direct investments) via token offerings on digital assets exchanges.”

Many courses are even readily available online to quickly learn about the new technology. Microsoft, for instance, offers a platform via Azure to build and learn about the Blockchain.

One-man shops in countries with unfavourable economic systems, like Zimbabwe, can also adopt smaller, stable, Crypto-built Apps/coins to facilitate or replace payment systems. In cases of rampant inflation, Cryptos can temporarily act as a store of value or help pay for things until the currency stabilizes again.

As with the Venezuelan hyperinflation case study, Cryptocurrency intervention could help many developing countries troubled with economic instability.

Advert: Web security scanner

There is also the option of Crypto-mining. Now before you pull out the high-energy (electricity needed to power PCs that mine Cryptocurrency) 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.

Corruption


To combat this, Blockchain databases could record votes, which are nearly impossible to tamper with using Smart Contract technology. Having fair elections improves infrastructure, which then increases development and economic dependability.

Blockchain non-profit company Cardano, this year, has partnered with the Ethiopian government to battle these issues specifically.

5. Leapfrogging

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.

MPesa

Although these facets have been detrimental in the past, this also means that there is no rigid current economic system to upend 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.”

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, surpassing current World Bank expectations and its developing national counterparts.

This must begin internally. According to Olorunfemi, “Education—of policy makers 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, along with 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

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Open Banking – too exposed?

As a human race, we are constantly striving for easier ways of doing things: simpler, faster and more practical. Thanks to better tech, you can now interact with people globally and instantly with the click of a few buttons.

Likewise, you can also physically move quickly due to advances in transportation technology. When it comes to the age-old practice banking – the same is now happening.

Provided you have the necessities, a passport, residential address and a mobile phone, you can now open a bank account within minutes. This is brought about by a Fintech offering better known as Open Banking.

Open banking is the use of open APIs that enable third-party developers to build applications and services around the financial institution.

Wikipedia

It is ultimately about giving you a better, secure and flawless service experience with the opportunity to gain access to excellent financial products.

Online security expert and Chairwoman of Zortrex, Susan Brown reflects on the advent of the new offering:

“Just over a year ago when Open Banking came into the limelight for the Fintech world. CMA9 (the nine largest banks within the UK), were effectively mandated to make their banking platform accessible for third party companies.”

A comprehensive global report commissioned by Accenture emphatically highlighted growth and talking points about the emerging industry in 2017.

N26 Bank
N26 Bank

This is all wonderful, innovative, and promotes transparency within the financial services market – but there is only one drawback Brown cites:

“Consumers really do not know what Open Banking means, there has been a lot published about the benefits that is to be had from Open Banking. At the same time consumers have become very aware of the negative aspects around sharing their data.”

Online scourge of hacks & breaches

Daily, you hear more and more about hacks, and data compromises. With the UK’s Lloyds Bank breach last year; the trust by its consumers to share their financial and personal information, some would say, is completely gone.

In addition, you go onto a site look review products and before you know it, you are bombarded with adverts on the products that you have been looking at elsewhere. This has led some consumers to abandon shopping carts and refrain from using online retailers.

If not adequately protected, the newly established Fintech system might suffer a similar data breaches.

Visa and Mastercard for one, are among the established firms threatened by Open (and Mobile) Banking. And so, they should be according to Brown.

“As consumers knowledge grows about their data and the security around their financial data has not been secure as shown with the Marriott hack.”

Naturally, these new systems pose a huge threat for banks as they become the digital gateway channel connection to the financial sector. This eliminates the direct relationship between consumers and banks.

This is not a bad thing as banks are overwhelmed and cannot always keep in touch with every client.

Added layer of protection

The solution for failing global acceptance would be for a new Fintech company to gain the trust of its new customers. They would naturally also be able to chip away at the market share of other expensive financial institutions.

What you as a consumer know and want is privacy and security. Currently, only banks can make this happen – but at a high cost.

With a new digital tokenisation system like Zortrex vault, you can concurrently let your consumers reap the awards on their transactions.

They can as a result, gain redeemable tokens for patronising your services. This can occur while both you and your partners offer them products globally.

“Don’t be a gateway for the challenger banks be in control of your omni channel for your consumers,” Brown advises

Read more about Zortrex’s solution to privacy here.

This blogpost contains excerpts from Susan Brown about Open Banking initially published on her LinkedIn page.  




Gear up for Online Trading

We kick off the year once more with trading: a topic that might not be directly tech-related. It however, relies heavily on online technology to help with investments and therefore, is noteworthy.

More and more millennials are getting into the habit of adopting get-rich schemes. You just have to look on Instagram and Twitter to see how gullible some of them are to Ponzi-like schemes preying on online and financial naivety.

It has become so cumbersome as most of the predators ‘befriend’ you only to present you with the offer to trade (Forex, Binary options or mine Crypto) on your behalf. Some blatantly just ask for you to deposit cash (usually increments of $500) into unknown accounts!

Nothing to perform due diligence is available and not even a website atimes – just the promise of profits of up to 30-80% weekly, monthly or whatever – it’s all click bait!


A notable 60 percent of high net worth individuals (HNWIs) in Latin America alone showed high interest levels in Crypto investments in 2018.


Capgemini’s World Wealth Report 2018.

You can however, as we mentioned around this time last year, take full control of your financial destiny.

When it comes to managing an online portfolio via a broker such IQOptions, there are a few things you have to consider first before dropping cash into your trading account.

Here is a quick checklist of basic things you need before considering it:

  • Equities (Shares or stocks, ETFs, Commodities, Indices, Options, Forex, Futures and Cryptocurrency). These are all vehicles you can engage with  concurrently in the same portfolio.
    • They all also have their (moderate to extremely high) levels of risk. Learn how each of them worksShares are actually the less risky of the batch nowadays.
  • Have a plan! One does not just opt to invest in equities to “make money”. Of course you will make (or lose) money. The question is how much and within what timeframe? When are you looking to have the money back? These questions will help determine what kind of investor you are or the approach to adopt when investing.
  • Based on your knowledge, appetite for risk and the associated costs, you will either be a long, mid (mixed) or short-term investor. The latter is referred more commonly to as day-trading.
    • Long term trading works pretty much like savings. You buy the stock/share and hold it for a long period of time (shares/stocks and indices are the best vehicles for such). All the others can be bought and sold by the minute, hour, day, or weekly.
  • Pay attention to all the associated costs. It costs nothing to setup an online trading account via a broker. Your bank may charge a brokerage fee for running a separate trading account. The advantage of that mainly is just the ease of adding and withdrawing your ‘winnings’.
  • Setting up with your bank means there is also less admin when it comes to verifying your personal details such as ID, physical address and so on.
  • Be sure to have all documents ready and up to date. These are mandatory and required by local financial authorities to help prevent or determine fraud, the use of securities to launder money or fund terrorism.
    • The bank trading brokerage fee can be waivered by going for a online broker independently if you have all your ducks (paperwork) in a row.
  • Once setup, there are further internal costs that the broker will charge you. Pay attention to the commission charged when you purchase a security of choice. Some waiver it but then charge what is called a spread. Then there are other deductions such as a charge for borrowing money to trade – what is termed ‘overnight fees‘.

Some strategies

We strongly recommend actively running a trial for at least 2 months before making  your first deposit to start purchasing securities.

Before that first purchase, you should hopefully have used the trial period to learn some of the tools. Trading (or investing) is not something you do out of a gut feeling. There is about 3% ‘gut feel’ but the rest of knowledge comes from studying the tools for technical and fundamental analysis.

TradingTools
Courtesy of cryptoworld.info

The difference between technical and fundamental analysis is the difference between trading and investing – without any, you are outright just gambling!

Budget within your portfolio

Always start small and see how that goes before diving fully in. People get greedy and think if $10 fetches a $5 profit then $10 000 would subsequently garner $5000 or at least $500. It doesn’t always pan out that way. If it was that easy we would all be millionaires!

One must also quickly avoid the habit of topping up the account to get the next hot stock because like a business, your trading portfolio is an investment for future growth. It must therefore, be nurtured that way.

Ride the waves (with your initial investment) and reinvest your winnings by ploughing back some of the profits into less riskier securities once you make a small ‘killing’.

Switch from a short to medium term trading approach to secure your profits. Many day traders end up losing all their gains because they stay in the game for too long. The stock market always turns eventually and gets its pound of flesh!

As a rule of the thumb, purchase only after a massive drop in price – as you would in a fashion sale. When a security’s price has risen to abnormally high levels, its ‘bubble’ tends to ‘burst’.

In addition, there are tools to measure whether a stock/share or any security for that matter is overvalued. Study them!

Market trends

The markets are constantly in motion and like a rollercoaster, prices are constantly going up and down. You have to choose where (and when) to place your buys (and positions) to make your profits.

TradingTimes
Courtesy of IQOption

Know the market (opening and closing) times so you do not miss a good deal. Many markets will either open with a big rally; cool off in the afternoon and then close with a sell-off (in the red) in the evenings in general.

What causes the up and downs is the buying and selling off respectively.

Based on that, and with the common knowledge that everyone sells at a high profit – what do you then think would happen after a massive rise in the price of a security? It is not rocket-science yet many people fall for it and end up buying at the height (peak) price of an equity.

Easier said than done. Naturally, it is hard to predict where this peak is as many inexperienced profit hunters have found out the hard way.

Markets tend to crash in predictable cycles. The Crypto market fell by a whopping 70% in 2018 – a monumental drop in market capitalization after its equally amazing 2-month bull run. Many individuals and companies who bought Cryptos in January 2018 as a result went down in flames because of such bad timing – and just plain greed.

There are however clear smoke signals in trading – preparation is key!

These are just some of the basics to help you get into an investing state of mind – more particularly with online trading. You will find a few more  useful information on the resources page.

Happy trading and remember to start of with a free trial!

General Risk Warning: The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.

Digital Dribs & DApps!

We have barely scratched the surface with the Internet (introduced in the early eighties) and it is already seemingly being threatened with competition. A possible replacement by a new phenomenon.

Well, for lack of a better word, “replaced” has connotations of a dying Internet. This is far from accurate.

This new phenomenon – fostered by blockchain technology, will change the way you use and consume the Internet as a service.

So, what is this new Internet-like system creating waves online and making online marketers quiver at the prospect of them losing out on the exponential revenues they have previously enjoyed?

Well, without hyping it up any further, it is called Distributed Applications or ‘DApps’ for short.

A brief history of Apps

Before we delve further into its meaning and use in the cyber world, perhaps some background context is required.

The use of online or mobile applications software or “Apps” has boosted the way you consume products and services online. Companies jumped onto the bandwagon when they discovered that we mostly use Smartphones for the Internet – a lot more than on desktops.

App developers were then subsequently sought after to create mobile Apps for practically anything.  What started as something mainly for gamers moved quickly onto Apps for any commercial activity.

We now use Apps (the Internet) for shopping; fitness; travelling; online bookings and banking. Developers now create customised software to help with anything.

There is now an App store for every significant tech provider – Microsoft, Google and Apple to mention a few. This has naturally fattened their pockets and created an additional stream of income from an eager market.

The ‘catch’ for using mobile apps is that though it costs you nothing to download, using them still require some form of ‘registration’. You can do this by providing personal data or linking to an existing account such as your Facebook or Google account.

The benefit to App providers

The Apps, which are also embedded in social media, create a data goldmine for marketers to study and track your browsing habits. Through them marketers can gain valuable insights into your interests and then customise their products/services to sell to you.

Data mining has become more lucrative and more accessible with the advent of Artificial Intelligence (AI) and Machine Learning. Ever notice how after browsing online or having a conversation or a chat application like WhatsApp or Facebook Messenger, you go online afterwards, and you see Ads displaying the items you discussed?

Creepy isn’t it? Well, that is the future of Web 4.0 for you!

Staying ‘woke’

Luckily for us, there is a school of knowledgeable and security conscious programmers who are not ‘giving in’ to the way the Internet has become a centralised cesspool for marketers to harvest data from.

Social media platforms, search engine providers and mobile application providers facilitate them immensely with this.

Watch a video explaining the mechanics of DApps

The impetus behind a distributed application system is that it serves to distribute plough some of wealth garnered from your data via application providers back to you – the end user.

Imagine getting paid to surf the web for hours. The way you get paid for taking on a survey, partaking in a social experiment, donating an organ or sperm?

This is the way distributed apps are touted to work: by rewarding you for the use of specific applications (in a peer-to-peer review like setting) with cashable tokens. Seems only fair right?

Now you can imagine how companies like Cambridge Analytica would react to having to pay you for their use of your data. There will be reluctance and resistance but if they could pay companies like Facebook for the use of data, why not pay us directly?

Early adoption

Joining the DApps revolution is a no-brainer. Companies at the forefront of building and supporting DApps will end up getting a more substantial chunk of the market.

DApps will primarily provide you with the use of payment (remuneration) systems. These are specifically known as Smart Contracts and Proof or Work systems.

There are currently also web-browsers (built as DApps on blockchain platforms such as Ethereum or EOS) that will reward you for merely using their DApps.

For instance, you are rewarded in cashable tokens to surf the net over applications like Google Chrome, Opera, Microsoft Edge or Mozilla Firefox.

It is therefore, only a matter of time that this form of Internet-browsing and use of applications becomes the norm.

The Internet revolutionised the way you communicate, socialise, learn, shop and do business online.

DApps however, will determine the way you get compensated for doing the very same things you love to indulge online while making it worth your while.