Blockchain holds the key to radically evolving African industries
Blockchain technology presents the opportunity for Africa to leapfrog not only payments but land records, financial services, insurance and supply chain management.
So said programme director for faculty affairs at Singularity University, Nathana Sharma, speaking at the SingularityU South Africa Summit in Johannesburg yesterday.
Sharma, also a partner in a fund that invests in blockchain technology and crypto-currencies, believes blockchain technology has tremendous potential, particularly for the African continent.
Gartner research predicts the blockchain business value will be $3.1 trillion or more by 2030, she noted.
"In much of the developed world, the financial institutions and public infrastructure is good enough, it works. It doesn't mean blockchain technology can't make it better, but here in Africa there are some problems that blockchain in particular can help to solve."
Securing land ownership
First, she stated, blockchain technology can help solve problems around land ownership on the African continent.
Referencing The Economist, Sharma said more than two-thirds of land ownership in Africa is insecure. That problem is probably much better in SA than in other parts of the continent, but it is still a tremendous problem, she commented.
"When property ownership is insecure or you can't prove that you own your land, it gets really hard to borrow money based on that land. But, if you can prove you own your land, borrowing money based on the land means you can go ahead and buy capital needed to improve your farm, for example. This is a key aspect of taking people out of poverty.
"Blockchain technology creates a decentralised database and this enables the ability to share and store information in a decentralised way. Instead of one person having control and access to information, every single person can have their own copy of the information. This is important because with the blockchain-based database, information can't just be deleted."
Sharma used the example of start-up BitLand as one of the use cases of blockchain technology in regards to securing land ownership records in Africa.
BitLand sends surveyors into town in Ghana to get to know the local communities, works with local government and chiefs, and puts land records onto a blockchain database, she said.
"This is really important because once the land records are on a blockchain database, when new people come to power they can't just change or alter the database. The blockchain records are secure.
"If you live in a country where the government is corrupt, or the wrong person is named the chief in a community and then decides to change an entry in a database to say your land belongs to their friend, your land ownership is not secure.
"But with a blockchain-based database, if that chief or government official wanted to change the record, the fact that they changed it will be time-stamped. It will be addressed with their signature that they changed it."
Fake medicine is not only a problem in Africa and the rest of the developing world, but is also a challenge for the developed world.
"It's really tragic when you go into a store and try to buy medicine for your child, husband or wife only to find it is fake medicine."
According to Sharma, the World Health Organisation estimates fake medicine kills 100 000 or more people in Africa per year.
Up to one in 10 drugs sold in the developing world are fake and this is a huge problem.
Sharma suggests blockchain as one of the ways to solve the fake medicine challenges on the continent. "Blockchain is not a silver bullet, but some of the largest pharmaceutical companies are developing a blockchain-based solution to track pharmaceuticals.
"Distributors such as Pfizer and Genentech are involved in a project that aims to develop real-time tracking systems for pharmaceuticals. This means creating a much better system to tell which medicines are fake and which are real in order to save lives."
Financial services headache
Sharma pointed out that financial service systems are one of the major challenges for the African continent as millions of transactions take place in the form of micro-payments.
"People that are sending micro-payments are sending under one US dollar a day. The costs for these transactions create an enormous amount of pressure on the network. However, using dollar tokens or a digital asset blockchain -based network can support transactions and payments among poor people."
Blockchain is hyped not just because of the volatile prices of crypto-currencies but because the world has incredibly challenging problems, she concluded. "This technology gives us the hope of starting to solve those problems."