South Africans develop new blockchain protocol
DéMars is developing a mobile money platform and blockchain protocol to create a new crypto-currency targeting the African market.
The crypto-currency, DéMars' (DMC) beta version, will be revealed by the end of Q2 2019.
This comes as many crypto-currencies targeting the African market are being developed. Earlier this year, Trapeace Holdings said it was developing an African-focused crypto-currency that it hopes will take on established players like Bitcoin.
However, Shaun Burrow, co-founder of DMC, says there are currently a number of blockchain projects coming out of the African continent calling themselves "Africa's first crypto-currency".
"We are huge supporters of all blockchain projects, but it's important that the community uses the correct terminology. If you have created an ERC-20 token, it is not a new crypto-currency. Using incorrect terminology makes it hard for newcomers to the sector to understand the offering.
"Let's discuss crypto-currencies and why it matters if you are buying into a crypto 'currency' versus a crypto 'token'. This is particularly relevant if the only utility of the token is to make a payment."
According to Burrow, Bitcoin is the most famous crypto-currency. "It has its own blockchain, a public transaction ledger, where users can only utilise Bitcoins as the unit of value in the blockchain. Ethereum is another famous crypto-currency."
He explains that crypto tokens, on the other hand, serve as transaction units on top of an existing blockchain. Ethereum ERC-20 tokens are the most famous, as they are smart contracts that are relatively easy to create.
"With DéMars, we recently designed and deployed what we'd like to call a DMC Altcoin, using elements of a couple of other blockchains. We created this altcoin to prove that we could use a Distributed Hash Table to speed up and scale blockchain transactions.
"With this proof of concept under our belts, we are currently building a new, unique, upgraded crypto-currency: DMC. The point we want to drive home is that we are an infrastructure solution with a unique protocol. We've taken a bottom-up approach and are building unique network infrastructure for a continent with a number of physical infrastructure challenges," says Burrow.
The company notes although the infrastructure (and its native currency, DMC) can be used for any number of financial transactions, it originally set out to build the network for a specific task: inter-African remittances and, more specifically, informal remittances from SA to Zimbabwe.
"It's a $1 billion-a-year market and the charges are astronomical, especially for small sums of money. The situation in Zimbabwe is extremely tenuous too, as a number of virtual currencies currently co-exist. They are all denominated in USD, but trade at different prices (eco-cash, bond notes, nostros, etc). It's the perfect market for crypto-currencies to disrupt," says Burrow.
Burrow, a banker by profession, states: "I started researching the entry-level market, and I was simply blown away to learn that 1.7 billion adults don't have access to basic financial services and to learn that in the remittance space, families are paying about $45 billion a year in fees on the funds they are sending home. This is money being diverted from the poorest of the poor."
He points out the cost of payments to sub-Saharan Africa and within sub-Saharan Africa is the highest in the world, ranging from 10% to 20% of the money being sent home. It's simply an unjust tax on ordinary, hardworking people, he adds.
DéMars says it has worked out a more efficient way (versus other protocols like Bitcoin and Ethereum) to transfer data and validate transactions. It points out the key innovation is a novel blockchain protocol that leverages a hypercube distributed hash table (similar technology to that used in file-sharing, which speeds up the network and allows it to scale efficiently).
Only 10 billion DMC, the crypto-currency, will ever be issued, so there is a limited supply.
The project is currently pre-selling 8 billion coins to raise funds for further development, with an initial selling price of EUR10 (R170) for 1 000 coins. The price will increase by 10% for each round of 500 million coins sold.