Cryptocurrencies like bitcoin are the new rave. Blockchain and cryptographic technology enabled the creation of a secure digital unit (call it currency, token or asset). This digital unit is not just the new rave but potentially the future of money. It is basically allows the holder to exchange goods and services in a way similar to barter trading but by using electronic units. It is similar to barter trading in the sense that no third-party such as banks or government regulate it or forcefully determine the value of each unit and exchange.
In the real world use, if i have a cryptocurrency wallet, while I am in Ghana and you are in China, I can pay you for a service you have rendered me directly by sending the agreed cryptocurrency amount to your cryptocurrency wallet. At the moment, you may choose to spend your cryptocurrency directly by exchanging for goods and services from anyone who accepts it as payment or you may exchange it back to the local currency that is commonly accepted in the city you are in.
Bitcoin and other cryptocurrencies are quickly being adopted globally. They are however currently very unstable, changing in value quickly as a result of demand and supply but particularly as a result of speculation by people attempting to sell and buy to make profit. This buying and selling is known as trading
Cryptocurrencies have also become a means of raising money by a lot of companies, some of them shady and fraudulent in a manner known as initial coin offering (ico), initial exchange offering (IEO) and a host of other names where a token is handed out to people in exchange for they investing in or giving money to the company to fund their project. The shady individuals or organization may setup a business and promise heaven only to disappear with people's contributions. Legitimate companies may however make people rich as their project, product or services gain value over time. The value of the token may rise due to trading or because the company that deployed the token has become more valuable. This is similar to buying shares except it does not imply some part ownership of the company as we see with shares.
Follow this link for a description of how a cryptocurrency such as bitcoin works. How cryptocurrencies work.
What cryptocurrencies like bitcoin might accomplish include:
- decentralizing currencies and banking.
- facilitating border-less or cross-border commerce.
- common global currencies
- correction of the faulty banking system.
- lower cost of financial transactions globally.
- easier ways of transfering money.
- giving people more control of their money.
- easier means of raising funds.
A side effect of the introduction of bitcoin is the discovery of the blockchain which is the structure on which crytocurrencies operate. It is handy for other uses beyond being a digital currency. The immutability (not easy to hack) nature of the blockchain makes it useful for other applications such as storing land-title records and certificates as well as for verifying the authenticity of an item, product or a transaction. A handy article on the blockchain can be found here. Blockchain Explained.
FUTURE DEVELOPMENTS
We may develop USSD based gateways to connect the blockchain and mobile money which another major innovation in our time growing rapidly and empowering the unbanked and under-served. This will allow the average individual without internet connection but with a basic feature phone to access and benefit from the emerging blockchain technology. Our expertise in web and mobile application development and our keen interest in cryptocurrency puts us at a major advantage in building blockchain powered solutions.
Currently challenges with existing systems including trading platforms are that they are internet driven and have major KYC demands that are not functional and practical for the use of individuals with mobile phone that do not have internet connection e.g. in our villages. If cryptocurrency is to grow, it needs to be usable to the average person (including the handicapped, illiterate, technophobe and unconnected). That is our mission at DigiGhana.
DigiGhana.com is dedicated to helping Africans understand new technologies and benefit from them including cryptocurrencies, the blockchain, artificial intelligence and other emerging technologies. You are invited to join the conversation on Blockchain Africa News via whatsapp or telegram
You can sell and buy some major cryptocurrencies using mobile money on this website. If you want to use credit or debit cards to purchase from Ghana you can buy on this website. Please beware that cryptocurrencies are an unregulated asset and highly volatile. You may lose money getting involved with cryptocurrency.