The stock market is just on piece of something much bigger-the financial system. The financial system is part of something much bigger-microeconomics. In turn, microeconomics makes up macroeconomics, a compendium of remarkable insights into human behaviour from which stem the foundation of business, politics, and financial decisions in the global economy which is slowly but surely turning into a melting pot of trade and culture. Cryptocurrency, backed by sound blockchain technology could be the key to uncovering a new type of economics which transcends geographical and political boarders. At the same time, cryptocurrency has served as a mirror of our society. As new faces enter the lightly treaded green grasses of the cryptosphere, we are able to observe human nature at play. As more politicians, businessmen, and everyday folks interact with cryptocurrency, it becomes apparent that like ants in an ant farm, the cryptosphere serves as a window into a redefined study of sociology, economics, and even biology.

The Will to Win

It goes without saying that the will to power is a part of human nature. Whatever form this takes can vary but usually the will to power can be interchangeable with the will to survive and the will to create offspring that survive. That being said, the utility of cryptocurrency presents an opportunity to better achieve the will to power. Translated, this will to power may simply be considered as the will to meaning. Some may perceive the will to power as the will to meaning or fulfilment. Mazlow’s hierarchy of needs provides a great representation of such wills.

Game theory reflects the very nature of man and his will to power (or whatever you may translate the will to power as). Blockchain technology is useful because of game theory.

What economists call game theory, psychologists call the theory of social situations. Game theory focuses on social interactions between groups of people. In addition to game theory, economic theory has three other main branches: decision theory, general equilibrium theory, and mechanism design theory. The branches are all connected to game theory.

In games, the desire to win can be seen in the action of each player. Rarely, if ever is a decision made for the greater good. Many decisions made by a player are for his own good. For him to win. This can lead in some instances, to zero-sum games where the other player loses while one wins but in other instances (especially when an individual is self-aware and chooses “good” over “bad”) the results may be different, where the greater good is achieved or at least attempted. Law serves as a great tool to determine how the game is played.

The system of a society can greatly affect how the game is played. Its legal system and political policies penetrates many areas of how the game is played. Some governments use this mainly to their advantage while others take a more inclusive view towards growth that allows for a “win-win” situation.

Enter Blockchain

An example of blockchain’s interplay with game theory can be seen where Ethereum rewards good behaviour on its network and punishes bad behaviour through its Proof-of-Stake (PoS), which requires skin in the game to punish bad actors.

Bitcoin on the other hand gives miners an incentive (bitcoin) to use their computers to secure the network. Its Proof-Of-Work system allows for a concensus to be reached on the activity carried out on the blockchain.

In the Art of War by Sun Tzu, it is apparent that the centralization of force can serve as a great help in implementing strategies in conquest and maintenance of power. This force is exhibited in centralisation of monetary and fiscal systems implemented by governments in the economy. This can also be exhibited in much smaller forms of governance. Even a football team has its own centralisation of power. It is a manifestation of human nature.

Technology such as blockchain and artificial intelligence could present the solutions that reduce the human bias in decisions that lead the global economy. This is easier said than done. Automation of certain processes and decisions in politics, business, and daily life can free groups from the human error inherent in many human decisions. This requires significant efforts to purify technology from the remnants of human deficiency. Such a feat can be likened unto climbing a mountain or two. It is possible but undeniably and breathtakingly difficult.

Richard Dawkins’ perspective in his book, The Selfish Gene, builds on the theory of evolution which points to human nature being driven by a desire to meet the wills of the self first. It is no wonder that despite technological advancements, our economies are more fragile than ever and susceptible to black swan events which like a house of cards expose the weak foundations of a system.

To prepare for black swan events such as those experienced in times past, it is important to consider the evolving nature of societies in time but also the seemingly constant state of genetics which are reflected in societies ills as shown in history.

Technology is created to solve the problems of societies but as with medical equipment,a doctor is also needed. A doctor with the self-control to not be drunk on power. A doctor or even doctors that have the foresight, understanding, and desire to make a better world with the power of technology.

There are several ways to redefine how societies work under blockchain technology including lending, fraud prevention, and law.

Lending as a Bridge

Lenders can be institutions or people with cash to lend. Several types of borrowers exist. Some borrowers may be businesses who need money to purchase capital for business operations. Other borrowers may be consumers who need to buy goods such as cars.

Lending can serve as a great way to spur business actitivies. It can also serve as a predatory form of control between countries and within countries. The saying ‘he who has the pay, has the say’ rings true when one considers that lenders essentailly own the trillions of assets , which if not paid for by borrowers, becomes theirs. The desire for the goods purchased through a loan can overshadow the less attractive option of organic growth for many businesses and economies. Some lenders see this as an opportunity to dictate loan agreeemnts which on the surface seem fair but in practice can be quite disadvantageous and sometimes crippling for the borrower.

With blockchain technology, it may become easier for borrowers to have a better perspective of lending markets. Better insights on the market may be achieved with greater transparency on the markets. Keeping this in mind, such realities may not be possible if privacy networks and coins are adopted by a financial market. Take into consideration the share amount of cryptcourrency wallets in the world. There are millions of such wallets in the world for Bitcoin alone, which is far greater than the number of banks in the world. This makes it very difficult to observe the transition of flows to identify fraud and unfair terms. Nevertheless, as technology (such as artificial intelligence and machine learning) develops it could become much easier to achieve the fraud monitoring and due diligence required to mitigate risks for borrowers and investors.

Blockchain technology can be a bridge to financial inclusion that uplifts the economically deprived and the middle class. Where purchases of financial products was once not possible, blockchain technology could serve as the bridge to access financial products and services that were once closed to them. This increase in choices means that indvidiuals and less economically developed countries have more choices of lenders and thus may not have to bow to predatory lending and similar tactics by those who ‘have the pay’.

The Hand of Technology Weakened by Corruption

Having a blockchain governance system whereby a select group of people-acting like miners-are able to actively monitor the system and verify the accuracy and authenticity of transactions and inputs into the system by financial institutions, it could become easier to determine instances of fraud. The question of centralisation remains a big challenge in this respect. While the form of centralisation has changed, the substance has not. This remains a big challenge which many who seek transparency from governments in the crypto markets must face.

In many instances, technology is only as good as the human that uses it. It is a reality that blockchain systems can be susceptible to fraud and corruption as a result of human intervention. This is where many private blockchains fail to those in search of more transparency.

The Double-Edged Sword of Law

The law heals, the law kills, the law is an axe, the law is a shield. In the hands of the common beholder, the law is a double edged sword. In the hands of the powerful, the law is an indispensable tool, often held with great care. It is without a doubt that the law will be utilised to shape the use of cryptocurrency for geopolitical causes. It is inevitable.

Even before the mainstream media coverage of cryptocurrencies, governments already owned them. News of government-backed blockchains and cryptocurrencies is a reflection of the share magnitude of influence cryptocurrencies will have in the future as they serve many use cases for governments and their agencies. Take for example, Venezuela and Iran’s attempts to circumvent government sanctions against them with their own cryptocurrencies. Students from both countries are able to use cryptocurrencies to surmount the barriers of sanctions against their banks. They’re able to pay school fees and afford other means of living as foreign students in countries that have implemented sanctions against their country. It should come as no surprise that more popular blockchain technologies are being invested in by signifcant geo-political players.

The share volume of transactions in OTC markets eclipses the volumes of transactions in public cryptocurrency exchanges. In the Art of War, it is apparent that secrecy can be a great tool for political advancement. In the same vein, many governments are likely to use such technology for political advancements.

Bitcoin as the new oil or gold is not a foolish assumption yet it is somewhat premature in that the technology has not fully permitted the layers of society yet that would make it so indispensable as a commodity like oil. When cryptocurrencies, whether Bitcoin or other cryptocurrency reach a peak of importance and use, the cycle of use feeds into itself, making the cryptocurrency almost indispensable to the common man. Such indispensability of course is not as easily felt to the man who can afford better alternatives. This, however is for another article.

Conclusion

Blockchain technology, if correctly implemented can create a new window of transparency on the government. As time has passed, the ignorance of the populace to developments has been its crutch in achieving the decisions it wants made on the economy. Blockchain technology could be the way to reverse the monitoring programs carried out on the populace as a whole. The panopticon, a theory that sheds light on social subjucation brought up by English philosopher Bentham shows a system where those being observed in it (the electorate/controlled) do not see the observer (government) and rarely ever their plans, unless it is voluntarily revealed. Like a pet in a glass box which cannot see outside but can be seen from outside, so too are many societies devoid of true democracy, trapped in a whirlwind of spoon-fed information and ignorance which stands to perpetuate centralised forms of governance that mainly benefit those in power and not those controlled by those in power. This is not to say anarchy or rebellion is a solution but rather to say that progressive steps towards decentralised power and forms of governance could be better ways of managing the resources and policies for human development in different economies around the world. Especially those that are restricted by thinly veiled agendas disguised in platitudes of “democracy” but devoid of the actions to convincingly support such assertions.

Mother natrue has the last laugh. Money fades, the trees die, but the history books of time , when looked into deep enough, don’t lie. When they seem to, the truth can often be deciphered, given enough time. Where will your name be in this big book of stories? What will truth say about you? We can only hope that as blockchain technology becomes more mature -and hopefully the maturity of leaders and followers- that a better working world is achieved. A world of less pollution, less wars, and less criminality. A world of equilibrium. It sounds like an evasive utopia but society can only keep trying. Each individual, powered by the technological awakening can keep trying. If only, they ensure they are indeed awakened by the technological era and not put to sleep by the noise of the digital age. Truth over noise.

It may surprise you to know that one of the world’s top social networking applications, Telegram, was funded by a $1.7 billion ICO. Running a successful ICO is not rocket science but it is hard work. Initial Coin Offerings raised billions of dollars over the years. It was reported that in the first half of 2018, $15 billion was raised in ICOs. This is more than the gross domestic product of some economies. Yet, if you were to assess the social impact of ICOs, you may find that ICOs have fallen short of providing significant human development which I’m sure, the creator of blockchain, Satoshi Nakamoto, would not have desired. This, however, does not negate the utility of ICOs for the greater good of society.

An Overview

ICOs are a form of crowdfunding on the blockchain. ICOs a medium whereby financial inclusion and capital raising can be achieved from almost any corner of the world. With an ICO, a teenager (or grandfather, if you will) can raise millions of dollars in digital assets (e.g. Bitcoin and Ethereum) for a project they are passionate about. Typically, these projects are based on blockchain empowered solutions for the problems of the world. You may consider ICOs as a way that blockchain entrepreneurs and developers raise funds for their ventures. It can also be considered as an informal means of raising funds.

A typical ICO may require a pre-announcement where the team behind the ICO project share their project idea with communities online. This may be a blockchain-focused website or other social media websites where potential investors and fund raisers are likely to be present on. The pre-announcement stage is important not only for letting potential investors know of the project but also for getting feedback on whether the project fills important gaps in the market. You could think of it as an episode of Dragon’s Den except it’s a very long episode with about a 100 times more questions and feedback from investors.

The next step in preparation for an ICO involves the creation of a whitepaper. This may be carried out using precedent of previous whitepapers as a guide. The whitepaper is a document which goes into depth about the project’s goals, experience of team members, funds to be raised, roadmap, and the cryptocurrency the project will use or create.

Following the creation of a whitepaper, an ICO project may launch their website. Some projects launch before they even have a whitepaper. The fundraising exercise may be carried out on the website. Many projects decide to carry out the ICO in multiple stages. Thus, a typical ICO includes an ICO pre-sale (usually with lower fundraising targets) which starts before a crowdsale. The pre-sale may target larger or private investors. Participants in a pre-sale may benefit from discounts on the cryptocurrencies they attain, a bonus card or free access to features of the service or products that is created through the ICO project. The pre-sale can act as a guide for how the crowdsale will be carried out.

Anyone can participate in a crowdsale (unless your region is restricted from doing so). Participants in a crowd sale receive tokens (cryptocurrencies) which they can sell at a later day, after an agreed period of time. A successful pre-sale and crowdsale can be an indicator that the companies have a good marketing team, strong cyber security, and a finished product that investors can use. This, however, is not always the case.

Issues at Hand

Having carried out due diligence exercises on dozens of ICOs, I have come to one of several conclusions. The world was ready for ICOs but ICOs were not ready for the world. Despite the infancy of ICOs, billions of dollars were invested into the industry. The world was ready to embrace ICOs but many ICO projects were not ready to take on the responsibility necessary to provide sustainable value for themselves and the world. Currently, there are over 2,000 cryptocurrencies and counting, many of which were funded by ICOs. There is no doubt that most of these cryptocurrencies will be worthless in 2019. This is alarming, to say the least.

There are several reasons why most ICOs are bound to fail. These reasons stem from issues relating to regulatory uncertainties, cyber security risks, lack of technical competencies, human resource management deficiencies, inadequate transparency, and dangerous penchants for short term gains.

It is ironic that despite the transparency which the internet has allowed us to have, there is still a sense of mystery around many ICO projects. From an investor’s perspective, this is very irresponsible and worrying. Many ICO projects often fail to provide the necessary information needed to adequately assess their suitability for the markets. Often times, they are a simply a shell of ideas rather than practical implementations of intelligent innovation. A lack of insight on the regulatory environment and adherence to it for example, is a great impediment to the viability of an ICO project.

Source: https://medium.com/swlh/the-story-of-the-dao-its-history-and-consequences-71e6a8a551ee

One of the most popular ICOs in history, The Dao, raised $168 million in 2016. Investors really believed the project would enable decentralised business decision making to blockchain projects. However, a major hack after the ICO led to a loss of 3.6 million ETH, one-third of the project funding. Such breaches can have lasting effects on stakeholders of the ICO. The blockchain network which The Dao ran on had to be split into two networks as a result of the hack. Now, Ethereum Classic exists almost as an offshoot of Ethereum. This is just one of many examples of the increasing need to ensure that a risk management framework for ICOs is effectively communicated within an organization that plans to raise capital via an ICO. It only takes one weak link to destroy a reputation and a business. A proactive approach to the management of cyber security risks in ICO projects is of utmost importance and will continue to be so in 2019 as cryptocurrencies become more popular, thus attracting more people, both good and “bad”. An adequate understanding of smart contracts and the concept of decentralised networks is important in the design of risk management frameworks for ICOs. This requires technical competencies , whether external or internal.

Technically competent team members in the blockchain space can be rare and expensive. The infancy of the growing space means that the pool of talent for many projects is relatively small. Other industries also find it difficult to recruit technically proficient programmers, blockchain architects, and cyber security professionals. This, in effect, has meant that many ICO projects have had to outsource a significant proportion of their technical tasks to external agencies and individuals. In a sense, this gets the job done but internal development of staff may prove to be more beneficial for the long-term viability of ICO projects. This may require creative steps by human resource management in cultivating talent internally through apprenticeship schemes. Many universities are filled with young minds (some with programming experience) who are excited about the future of technology and ready to add a lot of value to ICO projects, if given the opportunity and the guidance.

An overemphasis on short-term goals in the management of an ICO project can ruin the viability of the ICO project. Many ICO projects have taken a lax approach to regulation of their industry. In some cases, this has resulted in hasty and inadequately informed regulations by government agencies who chose a “wait and see” approach to regulations of cryptocurrencies and ICOs. It is important that ICOs are more proactive in their approaches to the different facets of their operations. Self-regulation, for example, could have provided many government agencies with more practical understanding of how to approach the regulation of ICOs. Self-regulation can be as easy as ensuring that the blockchain network an ICO project operates on is in fact, decentralised. Decentralisation allows for more transparent business transactions and exchange of value. Many ICO projects are not decentralised as they claim to be and as a result are as good as the problems which existed before blockchain was created.

As regulations of ICOs become more prevalent, more ICO projects will find that they have significantly higher legal and compliance costs which cut into fund allocation. The opportunity cost of regulatory compliance is necessary but without a doubt, a result of regulations that are in many cases, brash. ICO projects would do well to create internal policies and regulatory frameworks that best align their actions in 2019 with the better good of the communities in which they operate. Regulations can serve as great protection for stakeholders, both internal and external to an ICO project. A proactive approach to self-regulation can set the tone for more socially responsible ICOs.

Moving Forward

With the above mentioned in mind, it is important to consider that not everyone is passionate about the intrinsic value of blockchain and the greater good it can provide for humanity. This is where many of the issues in the space stem from as some participants look to make quick profits with little personal sacrifice. As a result, their whitepapers are shrouded in many promises and ideas but little evidence of practical steps that can be taken for the achievement of their high goals.

Founder of Etherum, Vitalik Butrin, suggested a fresh approach to fundraising on the blockchain, which could in practise be a means by which there are more socially responsible ICO in 2019. A DAICO is a hybrid between an ICO and DAO . A DAICO is published by a single development team which wishes to raise funds for a project. The DAICO contract starts off in contribution mode, with an agreed mechanism by which anyone can contribute digital assets (ETH) to the contract, and receive tokens in exchange. The tokens become traceable after the end of the contribution period. The key feature of the DAICO is that there is a tap which determines the amount of funds that the development team can take out of the contract. Investors, can by a majority vote, increase how much can be taken out of the tap or withdraw their funds from the project. This can all be made possible by smart contracts. The importance of blockchain fundamentals in approaching fundraising on the blockchain is imperative for more socially responsible raising of funds and use of funds in the blockchain space in 2019.

Enter STOs

Volumes of investment raised in 2018 suggest that ICOs are not dead but they are evolving as demand by investors increase for better whitepapers, better brand names, and more regulatory certainty. Security tokens have been touted as an alternative to ICOs for investors. Security tokens are tradable financial assets. Security tokens serve as cryptographic tokens that pay dividends. Some suggest that the intended use of STOs will be primarily for investment rather than for utility or promotion of blockchain technology. Utility tokens made possible by ICOs have less compelling use cases than the potential investment benefits of security tokens. With government regulated security tokens, greater certainty could achieved. This, however, should not be cause to neglect the fact that the banking system was also regulated before 2008.

On this day, the third of January, ten years ago, the world was given a gift that would change the course of history forever. The world was given the first genesis block of Bitcoin.

This genesis block was the first and only block to ever exist in the history of mankind. This genesis block was the beginning of a revolution that would positively impact the reality of mankind forever.

At 1:15:05 p.m, the revolution began. Following this date, the first ever recorded trading price of Bitcoin would be $0.003. A measly price which since then has skyrocketed as well as sea sawed between highs and lows.

The hexadecimal code of the genesis block was embedded with a referee to the the bailout of the United Kingdom’s banks. This was a classic mark of brilliance by the ever mysterious creator, Satoshi Nakamoto.

We thank you, Satoshi.

Introduction

What is Finance? Finance may be defined as the management of large amounts of money, especially by governments or large companies. Finance includes activities like investing, borrowing, lending, budgeting, saving, and forecasting. There are three main types of finance: (1) personal, (2) corporate, and (3) public/government. As investments in the blockchain sphere grow, the world may find a fourth type of finance present itself to its economies. This fourth type of finance is likely to intersect with the 3 other types of finance. It is decentralised finance.

Cryptosolution

Cryptocurrencies have served where fiat has failed. Cryptocurrencies have provided faster, cheaper, and more secure modes of value transfer for individuals and organisations alike. A mother in Uganda may receive remittance payments from her son in Chicago, USA in mere seconds at historically low fees. A man in Zimbabwe could ensure his life savings were not corroded by record breaking inflationary pressure. His family will eat tonight. His daughter will have her school fees paid . Cryptocurrencies have saved lives, remodelled systems, and redefined humanity in ways the world will never forget.

Bitcoin has provided frontier economies with the opportunity to utilise an alternative system which enables them to make cross-boarder payments at remarkably lower fees. The blockchain network on which Bitcoin is supported, allows for transfers that significantly reduce the time required to wait for cross-boarder payments to be executed.

The security of a blockchain network is such that it is extremely difficult, if not impossible for the transactions to be manipulated in such a way that a transfer of value to another region may be lost to a fraudulent scheme. Traceability on the network allows for greater proficiency in ascertaining an audit trail for monitoring purposes.

An audit trail of a cryptocurrency on a blockchain network provides the user/investor greater confidence of their transactions. They may approach their investments or finance activities on a blockchain with confidence that they will not be misled by incorrect information on their transactions.

A detailed look at history shows that in many regions of the world, traditional financial institutions have lost more than they have gained. Consider that a bank can simply shut down its operations, leaving its customers with no solution for their lost bank deposits. Many traditional financial institutions have socialised the significantly high historic losses of tax payers money and depositors money as though it was a natural cycle of the markets. Trillions in lost equity and wealth, as was exhibited by the 2008 crisis, is not natural. Despite similarly disastrous losses happening in history before 2008, society should not accept such events as natural. Bitcoin showed that it does not have to be accepted as natural.

It is incumbent on societies, households, and individuals to realise that they can be set free from the “cyclical” whims of centralised financial systems. With cryptocurrencies, individuals can have access to modes of economic activity that even the greatest economist never perceived.

Enter Decentralised Finance

The Dharma Protocol by Nadav Hollander and his team of trailblazers, is a permissionless, generic protocol for issuing, underwriting, and administering debt agreements as traceable cryptographic tokens. Dharma Protocol has set the tone for a future filled with blockchain based credit markets which allow for the following:

• Censorship resistance
• Trustlessness
• Transparency
• Programability

Anyone can access decentralised finance networks with an internet connection. This allows for increased access to finance on a global level. Whats more, some projects are working towards making such networks available with minimal data consumption or if they are offline. Such a decentralised network can be programmed to carry out functionalities which ensure advanced credit risk ratings as well as analysis of new financial products that may be built on a blockchain. The possibilities are endless. In the future, artificial intelligence may allow for advanced financial engineering on such a blockchain network.

Conclusion

The future is decentralised. History shows the race to the bottom which fiat currency experiences. Civilisations in history have experienced the deterioration of their economies by similar “races”. It is not all doom and gloom. A solution is here. The race to the moon has already begun. Reach for the stars.

Happy Birthday

The year is 2018. President Trump is still making headlines, however that shouldn’t distract you from the fact that African music is on the rise in popularity with talents like Wiz Kid and Davido leading the way for a melting pot of music stars but that’s not the story. It is the year 2018 and Bitcion has finally reached a decade since its inception by the infamous yet mysterious Satoshi Nakimoto. It may come as a surprise to many that the birthday of the apex cryptocurrency was celebrated just as much in Nigeria as it was in other blockchain communities around the world.

In France, Bitcoin’s 10th birthday was celebrated with an art exhibit, a contrast to the year before where Bitcoin’s 9th birthday was celebrated in style in an exclusive Russian Night Club, Fantomas. In Nigeria, cryptocurrency exchanges celebrated the 10th birthday of Bitcoin with giveaways to new users.

Early Days

It is indeed early days for blockchain technology and it may sound somehwat naive to state that Nigeria has a growing love for blockchain, however, it is important to note that waves of great change often start with ripples of motion, often unidentified by the majority at first.

There are several reasons to believe that Nigeria has a growing love for blockchain technology. It has provided an avenue for many Nigerians to gain or retain financial independence and hedge against the risks of an often turbulent Nigerian market. Some believe the growing interests of Nigerians in cryptocurrencies was spurred by the 2016 financial crisis in Nigeria which limited international trading due to the insufficiency of foreign currency in Nigeria. Entrepreneurs and consumers alike faced significant foreign exchange risks which inevitably compounded in the form of other business risks. Like it was for Zimbabwe, Bitcoin was a saving grace for many Nigerians. In both cases, the positive effects of Bitcoin in those nations have not been celebrated enough.

One Nation With Many Solutions

For the average Nigerian, finding a job is not an easy task. Self-employment and the shadow economy are often cited as the most viable ways of earning a living as a youth in Nigeria as there are millions of unemployed youth in the heart of Africa. A growing number of tech-savvy youth are finding themselves working with international blockchain projects in different functions, including community leadership, bounty campaigns, arbitrage, and software development.

Further to the above mentioned, the access to credit facilities is a benefit of blockchain technology which Nigerians may gain as infrastructural developments are made to enable scalable blockchain enabled lending solutions in Nigeria. Innovative solutions such as Settle Finance could enable greater access to finance for the Nigerian market, where traditional financial institutions (if they agree to lend) charge consumers lending rates as high as 17.5% .

Settle Finance aims to build the future of finance on a decentralised platform with self-contained, customisable financial hubs that allow for the following :

• Design of custom chat widgets that meet chat hub owner needs or create an entirely new market structure.
• Sharing of Settle apps with members and earning referral fees.
• Executing token lending deals with members.
• Trading OTC (Over The Counter) with immediate access to real-time quote boards.

Decentralised finance allows for tokenised funding which fuels entrepreneurship in ways that are not conceivable using traditional financial systems. Tokenized debt allows for smarter lending as the programmable currencies differentiate between the nuances of the transactions for which they are to be transferred.

Conclusion

Blockchain technology is inevitably the future of the working world and the living world. A reality where data and internet connectivity can be enhanced for human development and freedom of rights is one where not only Nigerians but the rest of the world will come to appreciate the audacity of hope in the power of technology to change the world. Happy birthday Bitcoin. To the moon.

Surplus Energy Trade

In recent times, news surfaced of a partnership between the university of Tokyo, IT company, Japan Unisys, electric utility Kansai Electric Power, and Mitsubishi UFJ Bank, the largest in Japan. The partnership will see researchers carry out deeper study into the viability of a platform powered by blockchain that manages direct trading of electricity.

The research will address, among other things, the growing use of renewable energy and its effects on the future of traded electricity. A distributed ledger technology could allow for the participation of several industries (energy management, and financial sector) in the trade of energy.

If such a platform is successful, surplus electricity generated with solar power equipment at consumers’ houses could be used to determine prices for energy before they are traded between consumers.

The Catch 22 of Energy on Blockchain

The impact of energy for blockchain community and other users of energy cannot be understated. From studies, it is clear that blockchain technology and Bitcoin consume a significant amount of energy. This may be considered as a contradicting feature of such a revolutionary technology.

Thankfully, for better or for worse, Bithub Africa has begun research on the use of solar power in cryptocurrency mining. Progress made with respect to this research could be phenomenal not only for other African nations with electrical deficits but also for the blockchain community and its users who face the challenges of electricity costs and high usage on account of the high electricity consumption rate of blockchain technology.

In its research, Bithub Africa considered the use of a standard solar panel to power a small network node that runs the blockchain software. They laid out a series of interconnected cables in a small mining facility in Nairobi and connected an inverter to a controller linked to a 200-watt solar panel. In a demonstration video, it was shown that the nuc computing device could be integrated to the controller to generate tokens on the protocol.

This is only the beginning as the blockchain accelerator, Bithub Africa, moves towards leveraging on peer-to-peer solutions suited to the African environment. Getting real with the energy challenges of blockchain technology is an important step that needs to be appreciated more by the blockchain community in order to ensure the advancement of the technology and mainstream adoption.

The Road Ahead

Virtual reality pioneer, Jaron Lanier, when asked about blockchain technology, stated that “The way blockchain works is about being explicitly inefficient as possible.” He expressed the negative impact that such an inefficiency could have on the climate. He believed that if blockchain is really scaled up at the scale of computation needed, significant developments would have to be made to facilitate such scales of computing.

Conclusion

From an idea, we went on the moon. From an idea, we saw planets from light years away. From an idea, we listened to sounds through an electronic device made of plastic and metal. From an idea, we created moving pieces of metal that we call cars. From an idea, we dared to believe that such moving pieces of metal could be better for the environment. We dared to believe that they could drive us, autonomously and with electric power. From an idea, we dared to believe that a different reality, virtual reality, was possible.

The words of legendary virtual reality pioneer, Jaron Lanier cannot be ignored. Infact, more of the blockchain community need to learn of the challenges so that appropriate solutions are made. There is, however, great hope and great potential for us to turn our ideas for blockchain into a reality that is beneficial for the environment, beneficial for the blockchain community, and beneficial for mankind. To the moon!

Japan’s commitment to provide $30 billion worth of investments in Africa’s healthcare, infrastructure, and security, naturally grabbed the headlines in what could be perceived as a significant leap in its trading relationship with Africa.

Japan has taken considerable steps to strengthen the foundations for a prosperous relationship with Africa as its economies show potential of high rates of growth and significant profit margins for investors. In 1988, Africa benefited from $4.6 billion foreign direct investment from Japan. Now, in 2018, Japan’s long and fruitful relationship with Africa could be bolstered by the power of blockchain.

Recent news of Japanese money transfer giant, collaborating with Africa-focused blockchain settlement platform, BitPesa, shows the ways in which blockchain technology may be used to make costly and complex settlement systems much more simple and effective.

Less Middle Men and Less Costs

Typically, a Japanese organization, in carrying out financial transactions with African entities may have to rely on a significant banks and middlemen to move Yen into U.S. Dollars or Euros and then out into African currencies such as the Kenyan Shilling or the Nigerian Naira. This usually results in accruing fees at each step of the transaction which serves as a deterrent to more frequent business transactions. The World Bank suggests that the average remittance fee for business transactions of this nature as much as 7% of the amount moved. Blockchain solutions which remove the need for correspondent banks and secondary currency exchanges can lower the costs to 3%.

The use of cryptocurrencies to hedge currency risks and other attendant risks of international transactions, need not be carried out in isolation to other methods. Blockchain solutions may be utilized in a hybrid solution which also involves settlements using cyrptocurrencies. The fact remains that there are times when settlement via fiat currencies may prove to be as useful as the use of blockchain. Further, there are still countries in Africa where limitations on the use of cryptocurrencies remain significant. The option to settle in fiat currencies, in such situations, is important.

The average time to complete a conventional cross-border transaction is 3–5 business days. This usually includes the final transfer via a domestic payment network. This presents opportunity costs related to time which businesses must face under usual circumstances. Compounding the issue is the lack of transparency in such systems. It is usually difficult for senders and receivers to track their payments, especially when problems arise.

How it Works

On a granular level, a blockchain settlement exercise can take place as follows:

1. Transaction is posted at Bank A which will entail debit of the customer/originator of the payment and credit of the settlement account for Bank B as maintained in Bank A.

2. Transaction posted on blockchain which entails debit of ledger account of Bank A (which is exposed to the network). A common account for Bank A will act as a mirror account for the settlement account maintained for the banks. The ledger account of Bank B (which is exposed to the network) is credited. A common account for Bank B will act as a mirror account for the settlement account maintained by the banks.

3. Transaction is posted at Bank A which entails debit of the settlement account for Bank A as maintained in Bank B and the credit of the beneficiary customers account.

Implementation of such a method with big data leaves room for potential improvements in the effectiveness of a blockchain settlement system. The challenges of such a system in Africa stems from the relative scarcity of data collection in certain regions of the continent. Further efforts to improve laws in relation data collection and blockchain may allow for more widespread adoption of such platforms in Africa’s economies. Nevertheless, BitPesa has proved that it is possible to create strong confidence in the potential of an African state to utilize blockchain for not only its benefit but for the benefit of its trading partners, namely, Japan and the world.

From the outside looking in, it is clear that Japan has welcomed blockchain technology with open arms and a golden smile. Some have gone as far as describing the meeting of Japan and blockchain technology as a match made in heaven. This may come as no surprise as the land of the rising sun is no stranger to testing the waters of innovation.

The Japanese government has taken proactive steps to ensure the benefits of blockchain technology are reaped by Japan. In 2016, Bills were approved which would allow for the recognition of digital currencies as money. Other blockchain friendly laws have been made by the government to promote cautiously optimistic sentiments in the blockchain space. The importance of an appropriate risk appetite in relation to blockchain is paramount for success of many industries.

Reinvention of Innovation

By embracing blockchain technology, Japan may find some of its industries reinvented in ways that they have never been before. Of course, Japan is no stranger to reinvention. From the playful Nintendo, to the singing Walkman, inventions from Japan have glistened with emotional appeal. What is indeed ironic is that such inventions which have changed the world will find themselves reinvented by blockchain technology. This is good.

As an island with a history of positive export activities, international trade can serve as an advantage due to its geographical proximity to water. By using blockchain technology to complete trade transactions, labour costs can be reduced through document digitization while also increasing transparency. This allows for greater levels of trust with organizations form nations that may be considered to have significant fraud risks. Trade-related processes such as the issuance of a letter of credit and the delivery of all trade documents can be completed entirely on the blockchain allowing for all parties to have the most accurate view they have ever had of a transaction, whether some of the parties are in Africa, Europe, or the moon.

Challenges of Adoption

Ensuring widespread adoption may be a challenge which must be achieved with respect to blockchain technology for trade transactions. Unfortunately, the rate of adoption of the technology in some nations is not as high as in Japan. This means that the use of a blockchian platform to facilitate a trade transaction may seem incredibly foreign to a party which a Japanese organization aims to collaborate with.

Overcoming the Challenges

Nedo, a Japanese government-controlled organization, serves as a great example of the potential use cases of blockchain technology for international trade in Japan. The organization has partnered with IT organization, NTT Data to build a blockchain trade platform. Issues related to manual entry of information and data correction can be rectified with the implementation of blockchain technology in trading activities.

The significant number of stakeholders that are likely to be involved in one trading transaction usually increases the risks of errors and unforeseen circumstances taking place. With the use of blockchain technology, an audit trail exists to ensure that activities made with respect to a trade may be monitored. Additionally, blockchain allows for consensus/voting to take place with respect to the action of participants in the blockchain trade. For parties to a blockchain network, this may mean that they do not have to worry about a decision being made on a trade transaction without their approval. The blockchain, through smart contracts can ensure that there are rules that limit the risks of a party to the trade transaction making a decision about the payment instructions or other aspects of the trade that are not in line with the objectives of the other parties.

The financial sector in Japan has exuded growing confidence in blockchain technology. The Mitsubishi UFJ Financial Banking Unit collaborated with the Japanese blockchain consortium and Singapore’s National Trade Platform to work on integrating their trading platforms.

Conclusion

There is no doubt that blockchain will be a fabric of the majority of societies reality. It is inevitable. The only question is when. The steps and leaps taken by countries in Asia towards the progression has shed light on what can result from optimistic approaches to a technology in its infancy. Without much confidence, the technology cannot grow to its full potential.Without widespread adoption, there may be challenges that will exist to allow for more efficient means of trade settlements. It is indeed fortunate that Japan has embraced the hope that blockchain brings for the world’s economies. The world’s perceptions of trust will change as blockchain technology is adopted in the future. This in turn will significantly impact economies, from Japan to Nigeria to England. The world will never be the same and for that, we say, thank you Satoshi. Thank you. Arigatou gozaimazu.