Page 73 - Msingi Afrika Magazine Issue 14

Innovata Africa

culture they are very sensitive about payments there will be later no need reserves they have; that is how much
privacy. He created Bitcoin as a P2P for complaints or to check if there US dollars or Euro they have. Does
payment system that does not re- was a fraud, because everything is the Federal Reserve of the US do
quire a third party i.e., a middleman. digitally signed. In short, this is how the same thing? Does the Federal
P2P means there are only two par- cryptocurrencies work. Reserve every time it wants to print
ties, there is no third party, so when more money ask itself how much
you make a payment, you have the Why is it important for Afrika at Naira they have? Every Afrikan
payee in the transaction it is a direct this time? country has weak currencies, that’s
payment. It is very similar to when Firstly, you have to understand that where cryptocurrency is important.
you go to a shop you don’t go to an most Afrikan countries are coming Cryptocurrencies can help Afrikan
intermediary processing unit. With out of decades of colonization by central banks to have a reserve
the credit card payment, you need a most Western countries like France currency that is independent from
third party to process the credit card the UK and Portugal. These are very any other nation. Central banks, and
transaction. young countries and therefore the therefore Afrikan governments, can
countries are not strong enough. All make independent decisions that
In the Bitcoin world, banks don’t of the world currencies today are will benefit the local population. In-
exist. When you want to make a fiat currencies. A fiat currency is a stead of as they are doing now every
payment online, Bitcoin starts with a currency that is printed on paper, time making sure that the interest of
cheque with a value on it. With that and then backed by the government the nation the currency depends on
cheque you go to an online shop through a central bank. The cur- are not frustrated. That is the first
just like with the credit card system, rency in a fiat system depends very advantage of cryptocurrency for
but here you write a new cheque. tightly on the strength of the nation. Afrikan nations.
In this new check you indicate the In Afrika we have small countries
reference of the previous cheque that can’t back their own currencies. The second advantage is that
from which you are drawing the val- Take for example the case of Fran- cryptocurrencies can help with the
ue, you write the amount of money cophone countries, those that were reunification of Afrika. Currently
that you want to give to the payee, formerly colonized by France. I would say that we have about 30
you write the payee address and at currencies across that continent
the end of the cheque, you sign. It They decided that because they are that is a lot. If you want to go from
is not a paper cheque, it is a digital weak, they would authorize France Cameroon to Nigeria, which is
cheque and to complete the trans- to print the currency for them and about 100 miles away, you have to
action you hand that cheque to the they call that CFA Franc which is do so many transactions to change
payee i.e., the seller. just a fiat currency which is printed your currency. That means business
by France. So, you can see how far transactions are very difficult across
In a perfect world, the payee will the Afrikan countries can go in giv- borders. Cryptocurrencies can solve
just take the cheque and say thank ing up their dignity their sovereignty, this problem by giving the whole
you and give you the goods. Bit- their independence in order to get continent a single currency that they
coin still assumes that there will be some sort of financial stability. The can use from Nigeria to Congo to
crime, so Bitcoin invented a kind countries that were colonized by the Cameroon to Cote d’Ivoire to Ken-
of underground cheque processing English and others are no better. ya to South Afrika.
network. That processing network Take for example, Nigeria. Nigeria is
is called Blockchain. The payee, the coming out of a long civil war with Those are the main two advantages.
one receiving the cheque, will send hundreds of thousands of deaths
the new cheque to Blockchain for and since then they have established What’s to stop Europe or Amer-
validation. The Blockchain will val- a kind of stable financial system ica from hijacking an Afrikan
idate that the new cheque issued is under the Naira. But even the Naira cryptocurrency?
valid and return that new cheque to is not an independent currency. The
the payee to complete that transac- central bank of Nigeria, every time I would ask you the same question,
tion, when the payee receives that it has to decide on whatever finan- what will stop Europe or the US
final cheque from Blockchain he cial decisions, they have to make like from, for example, printing fake
or she knows with 100% certainty whether to lower or raise the main Naira? The US dollar bills are more
that the cheque is authentic, that interest rates they have to check advanced than the Naira bill. Why
there is no fraud. Unlike credit card how high is the stockpile of foreign do you think the US doesn’t print

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