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The ‘truth engine’ driving Africa’s digital future

07 Sep, 2018 - 00:09 0 Views

eBusiness Weekly

Liquid Telecom
Of all the emerging technologies making their mark across Africa at the moment, blockchain doesn’t initially seem the most revolutionary.

Blockchain is essentially a distributed ledger technology that allows information to be exchanged among several parties but not altered. It can create a shared system of record among network members, eliminating the need to reconcile disparate ledgers.

Compared to some of the weird and wonderful connected devices introduced as part of the trend towards Internet of Things (IoT) or the science-fiction-meets-reality potential for Artificial Intelligence (AI), it is no real surprise that blockchain hasn’t quite captured the general public’s imagination in the same way.

But scratch beneath the surface and what blockchain represents is so much more: it is a “truth engine”. The information inside a blockchain can’t be changed or modified. Like an elephant, it never forgets.

To the business community, blockchain represents a new opportunity to improve processes and drive efficiency. And its timing couldn’t have been better.

Consumer trust in online services and platforms has been shaken by years of fake news, major data breaches and serious misuse of personal data. Blockchain presents an opportunity to shine truth across the internet — placing digital records and transactions into a shared ledger and ensuring there is no single point of failure or no one organisation controlling that data.

In Africa, blockchain also presents another platform for digital empowerment.

In a region of fragmented data, complex supply chains and inefficient trade, the technology has the power to transform the way businesses share information, track assets and deliver their services.

It’s ability to deliver transparency across transactions and services also makes it an ideal fit for governments and their delivery of public services, which for too long have found themselves susceptible to fraud and corruption.

Yet blockchain’s earlier alliance with Bitcoin — the technology was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency Bitcoin —has led to some misconceptions in the market. Cryptocurrencies have become synonymous with get-quick-rich-schemes in some African countries, and a period of market education is required to demonstrate the full value of blockchain to African economies.

In this report, we take a look at some of the initial blockchains discussions being held by business leaders, start-ups, academics and government entities as they begin examining the potential use cases and applications for blockchain across the region.

What we discover is a real appetite for public and private organisations alike to seize the blockchain opportunity while it still is in its nascent stages.

There is much work to be done. There are no global standards or regulations in place for the technology, and new skills are required in the workforce to support its rise. One thing is for sure, as the global discussions around blockchain technology continue to grow – Africa will be part of it.

How does it work?
A blockchain comprises numerous nodes who join the network voluntarily, with some incentive to do so. The number of nodes varies, but the largest public network in the world, Ethereum, is reported to have achieved nearly 25 000 reachable nodes around the world within two years of launch.

In a major public network, anyone can download and start running a node and participate in the consensus process; and anyone can send and read transactions through the network, although the transactions are kept pseudonymous or anonymous.

In a federated or consortium blockchain, participation is restricted to pre-selected or approved nodes in which identities remain known to participants, such as legitimate financial institutions. The right to read the blockchain may be restricted or public, in line with a decision by the participants. Private blockchains are limited to specific groups or organisations. There is no central authority in this decentralised ledger, and it is ruled by consensus.

Who is interested in blockchain?
As keen interest emerges in the potential for blockchain, major vendors and multiple blockchain specialists are focusing on offering blockchain and broader distributed ledger technology (DLT) implementation and consulting services.

Thanks to lower bandwidth and storage costs and improved storage and computing capacity, blockchain seamlessly and cost-effectively connects the multiple nodes in the chain across multiple regions and has become a viable solution for pan-African systems of record.

Unlike cloud-based data storage, blockchain distributes data into nodes along the chain, making it harder —  or virtually impossible — for hackers to access.

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