Category Archives: kenya

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Digital Currency Ecosystem in Africa Grows, But More Connectivity Needed

A new report by the International Telecommunications Union (ITU) has outlined that Africa will need to invest more in internet connectivity in order to maintain the continent’s current pace of cryptocurrency adoption.

The popularity of Bitcoin in Africa continues to grow as a result of the presence of cryptocurrency exchange platforms. There are benefits to cryptocurrency ownership that are unique to the African continent, many devolving from the widespread unstable economic conditions.

Owning and trading in cryptocurrencies is a trend on the rise in countries across the globe. The markets in the USA and Asia have typically gained media traction, while the phenomena in Africa is left largely uncovered. Moreover, a large number of recognized exchanges don’t offer services in Africa, whereas, some recognize the significant marketplace that includes many Africans who do not have access to formal bank accounts.

If Africa is to be the next boom as many experts are currently predicting, it will need to make major changes to its telecommunications infrastructure across the continent, as indicated by the ITU report. The report shows that to connect the majority of Africans to the internet will cost as much as $450 billion.

Currently, governments on the continent spend significantly less than the global average with most countries spending three times as much on connectivity. Low education levels and the high cost of internet capable devices have been cited as contributing factors to the current slow uptake of the internet in many areas of the continent.

The uptake of digital currency has been prolific in Africa over the past two years, with many countries taking on the advantages that currencies such as Bitcoin offer over local fiat currencies. Kenya, Ghana, Uganda, Nigeria, South Africa, and Zimbabwe have all shown a significant increase in crypto adoption.

Coindirect co-founder Stephen Young says that Africa has unique problems and these must be considered in any startup plan for cryptocurrency adoption on the continent. He feels that current exchanges don’t take these into consideration. In terms of African fiat currencies, Young identifies their systemic volatility, insecurity and lack of governance as factors that the crypto space need to take on board: He argues:

“If Africans are to benefit from the cryptocurrency revolution we need make it easier to buy, store and trade cryptocurrencies. As Africans, it is our responsibility to help build the infrastructure and we need to be a part of the revolution.”

It is clear that this “infrastructure” depends on connectivity. ITU reveals that out of the 52 percent of the world’s population who remain unconnected to the internet, the majority of these live on the African continent.

One country is attempting to address this disparity. Rwanda has managed to achieve a 90 percent broadband spread with its nationwide rollout of optical fiber throughout a larger part of the country. The project began in 2009 in order to boost broadband services and attract foreign business investment.

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Kenya Enlists Blockchain to Fight Allegations of Electoral Corruption

Kenya’s electoral agency plans to utilize a blockchain voting system in its reform efforts to promote transparency.

The blockchain system in the works would be used to offer real-time voting results to avoid any perceptions of misconduct including tampering with the results. A statement from the Independent Electoral and Boundaries Commission Chairman Wafula Chebukati detailed the potential blockchain solution as providing security for all presidential candidates and allowing them to access and verify the results themselves.

The northeast African nation of Kenya has suffered claims of election rigging in nearly every election since the institution of multi-party democracy in 1991. The leader of the opposition party Raila Odinga just last year rejected two of the presidential polls; the first was annulled by the Supreme Court on the grounds of substantial electoral irregularities.

In 2007, chaos ensued after the disputed election results, leaving approximately  1,100 people dead, as well as displacing around 600,000 before a coalition government was finally agreed upon.

A blockchain-backed voting system could be a valuable tool in promoting a peaceful democracy in Kenya, bringing an end to any lingering doubts about the legitimacy of results.

Blockchain solutions in elections

Ukraine has also been testing the benefits of utilizing blockchain in its voting procedure. The Central Election Commission of Ukraine has been experimenting with the NEM blockchain, with the commission commending the immutability of hosting elections on the blockchain, as well as the improved security benefits of the decentrally-hosted data.

While it remains in the trial stages, the head of the country’s voter registry at the commission Oleksandr Stelmakh has been providing much positive feedback on his social media pages.

An Australian start-up also has plans to institute blockchain voting technology in countries such as Indonesia that are struggling to preserve the sanctity of elections in their emerging democracies.

The platform designer Jamie Skella said: “If you utilize blockchain to submit a vote in the same way that a Bitcoin transaction can’t be reversed, it can’t be changed, it’s a trustworthy process based on a system, which is not owned by any one entity, not by an organization, or a government or an individual.”

 

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Live At The Kasbah: Richard Branston Hosts Marrakesh Blockchain Summit

British business entrepreneur and founder of Virgin is now to host a major blockchain summit at his home in Marrakesh, writes Forbes.

The summit is normally held at Branston’s personal offshore home on Necker Island in the British Virgin Islands. However, it was devastated by last year’s Category Five storms which tore through the island, destroying numerous private residences.

In view of this, an alternative location needed to be found for the high-profile conference, which was responsible for the forming of the Blockchain Alliance which now includes 36 government agencies and the Global Blockchain Business Council, with members from 35 countries.

This year, the founder of the annual event, investor Bill Tai, announced that the event would be held at Branston’s Kasbah Tamadot in Marrakesh, Morocco, with eminent guests Google co-founder Sergey Brin and Kenya cabinet secretary Joseph Mucheru, along with 30 speakers. Building blockchain in Africa is reported to be the central focus of this year’s conference.

Tai commented:

“The whole continent is a bit of an unknown to a lot of folks because they just don’t get much exposure to it, I think getting a lot of people together that are knowledgeable, with reach, and high profile, that collectively can form a view about what are the opportunities at hand can both serve philanthropic and commercial interests.”

Blockchain in Africa is developing slowly but surely. Ghana-based Bitland and Kenya-based Land Layby are working to use blockchain to create formally-recognized infrastructures for proving land ownership, and the technology is increasingly being used in logistics to track goods from growth to table. Many small businesses are getting much-needed support from NGOs and private companies integrating blockchain projects into a range of sectors across the continent.

Tai has his own project in mind which he says he is due to announce, called Barking Dog. The project is reportedly designed to help governments without land titling in place to use blockchain to assure citizens and governments of their rights to land and, once established, to tokenize the assets.

The World Economic Forum estimates that 90% of Africa’s land is “completely” undocumented and Tia maintains blockchain could become a major factor in effecting the necessary changes to the status quo.

 

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IBM, Global System set Blockchain Developers Humanitarian Aid Challenge

Global tech giant IBM, through a partnership with anti-poverty campaign movement Global Citizen, is challenging blockchain developers to create a donation tracking program, reports Fortune.

IBM’s aim for the project is to encourage philanthropy by tracking the path of donations, from where the money originated to what it was spent on, and who finally received the funds. It is not the first of such projects promoting support for underdeveloped nations and struggling communities. The Multinational recently launched a pilot blockchain-based project to support small businesses throughout Africa with a Kenyan logistics company.

The two-month competition called “Challenge Accepted” was inspired by the United Nations’ Envision 2030 initiative, which aims to improve the lives of impoverished and at-risk people. It is s open for all comers starting on May 15 and will offer rewards to participating developers, including tickets to the Global Citizen music festival in New York in September.

Simon Moss, a co-founder of Global Citizen, suggests that the technology has the potential to change the face of humanitarian aid, claiming that blockchain can provide the much-needed transparency to donations provided for humanitarian aid:

“Blockchain can provide clarity on not only who is donating, but how money and supplies flow through organizations that provide aid – such as tracking a gallon of water purchased by an organization to the location where it was delivered,” he wrote.

Blockchain solutions to these types of donations have a clear benefit in the light of numerous recent scandals connected with humanitarian overseas aid. The most recent media focus on allegations of 26 claims of sexual misconduct against Oxfam workers in Haiti is a case in point. Potential donors are often concerned about the final destination of their donation. Also, fake charity approaches occur all year round and often take the form of a response to real disasters or emergencies, such as floods, cyclones, earthquakes, and bushfires.

Along with IBM, both the UN and the World Food Programme have also been proactive using blockchain to record transactions.  IBM project manager Kathryn Harrison commented that IBM is looking to become involved in projects that can make some social impact, involving the company in, “opportunities to use this technology in areas that we can do some pretty substantial social good.”

As for the project, IBM has a fairly open requirement for the “Challenge Accepted” competition: “We’re focused on so many different types of use cases. We look at food safety, we look at microfinance, we look things like the environment and carbon credits and energy savings,” Harrison explained.

There’s been a significant rise in recent years in charities which are now supported by cryptocurrency donations. Some of these have joined a growing establishment of charities accepting Bitcoin donations such as Electronic Frontier Foundation, Multidisciplinary Association for Psychedelic Studies, WikiLeaks, Antiwar.com, Watsi, Water Project, Code to Inspire, Bitgive and Epic Change.

Charities trialing Bitcoin donations are on the rise. More familiar High Street names include such well-known organizations as the Red Cross and Save the Children.

 

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Solar Power Could Be Africa’s Answer to Pushing Blockchain Forward

Last month, the 2018 Blockchain Africa Conference was held in Johannesburg to discuss blockchain and cryptocurrency development on the African continent.

The conference brought together local and international speakers to discuss the fintech regulatory environment, technology hurdles and opportunities in innovation, in terms of how these areas affect the promotion of the new technology in Africa.

Africa is rarely in the front pages of the news in terms of fintech development, but the continent is an emerging blockchain center. The recent task force set up by the Kenyan government to look into the technology, and growing interest in DLT in countries such as Nigeria, Sudan, Algeria, and Sudan represent a forward-thinking approach by some African governments.

Nabyl Charania, chairman and CEO of Rokk3r, suggests that one of Africa’s major technological hurdles is the problems surrounding crypto mining, due to the continent’s extreme climate not being ideally suited for its development.

Ethiopia’s average temperature is 93 degrees F, plus about 600 million people living in sub-Saharan Africa have no access to electricity at all. It is estimated that by 2040, 530 million people will still not have access to electricity due to population growth. What Africa does have in abundance, though, is the sun.

Bitcoin mining is booming in Cairo is due to its much lower electricity prices. Other countries are less fortunate, but see solar power as a solution. According to Reuters, Morocco’s 800MW Noor Midelt solar complex costing USD 2.4 billion has support from the African Development Bank, the World Bank, the EU and the European Investment Bank.

Seychelles has plans to install Africa’s first floating solar project, along with giant solar farms in South Africa, Uganda, Kenya, Morocco and Burkina Faso.

In an article on Greentech Media, author Tam Hunt suggests: “It can make good financial sense to use solar power to mine Bitcoin. Solar plants can provide power that is cheaper than grid power in areas with good insulation and low construction costs. The price of power is also known with some certainty over time because there are no fuel costs and thus no volatility.”

Such investments in energy infrastructure could bring Africa into the global crypto blockchain fold and also overcome the world’s major problem in this field: the unsustainability of crypto mining.

 

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IBM Pilots Blockchain Loans in Africa

Multinational giant IBM has launched a pilot blockchain-based project to support small businesses throughout Africa with a Kenyan logistics company.

The company, Kenyan-based Twiga foods, has used mobile technology to develop its supply chain for farmers and traders. To expand and offer microloans to its African clients, the company has joined IBM to employ blockchain technology to improve its current business model and deliver a more efficient and transparent service.

Skeptics have argued that it has been lenders who have historically benefited from such microloans, due to non-restrictive or in some instances a complete lack of barriers, which often translate to high-interest rates. The application of blockchain-based solutions to these loans is increasingly being cited by business as a way of addressing other microloan issues such as large overheads, slow delivery and corruption. The reason for using blockchain is that it is secure and transparent in nature. No individual or single entity can alter entries on the distributed ledger.

The IBM pilot project, developed at the IBM Lab in Nairobi, uses Hyperledger Fabric, a blockchain framework implementation that acts as a bedrock for developing applications and solutions.

The project simply requires African users to own a mobile and need capital to grow their business. The IBM blockchain program aims to fill the finance gap so small ventures can flourish on the African continent.

Isaac Markus, IBM researcher on the project, commented:

“After analyzing purchase records from a mobile device, we used machine learning algorithms to predict creditworthiness, in turn giving lenders the confidence they need to provide microloans to small businesses. Once the credit score is determined, we used a blockchain, based on the Hyperledger Fabric, to manage the entire lending process from application to receiving offers to accepting the terms of repayment.”

So far, the technology, which underwent an 8-week pilot, has processed 220 loans with a distributed average of KES 3,000 Kenyan shillings (KES), approximately USD 30, for recipients. These loans were disbursed with a repayment period of four or eight days that attracted a 1% and 2% interest respectively.

Andrew Kinai, the lead researcher at IBM research, suggested that the aim of the program was to offer the opportunity for small businesses to participate in an interdependent ecosystem based on SMS. Users, some with limited IT literacy would be better positioned to access financing for their orders.

As a result of the pilot, Twiga has benefited both from a boost in business and earned interest. Twiga, which started its business as a logistics company for bananas, has since expanded its operations to include more farm produce for distribution.

IMB now intends to spread the program throughout Africa.

 

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Africa and the Middle East: Crypto and Blockchain News Roundup, 13th to 19th April 2018

Africa and the Middle East

Welcome to our weekly roundup of all important blockchain and cryptocurrency news from around the world. Follow the latest developments in the cryptocurrency space continent by continent, country by country.

 

South Africa

Tax authority may be wrong about crypto: Tax Authority in South Africa, SARS, has announced that cryptocurrencies cannot be considered as currency for tax purposes but will be taxed on assumption that they are “intangible assets”. The move is not welcomed by cryptocurrency traders as intangible assets are subject to “capital gains” taxes and “currencies” are not subject to capital gains at all.

Startup UBU targets poverty: A South African cryptocurrency payment project called Project UBU is aiming to get as many users as possible. The project aims to provide participants with 100 UBU coins per day (equivalent to a few dollars) to individuals living below the poverty line. This program will thus create the world’s first welfare cryptocurrency that is transparent enough for those at the bottom of the economic pyramid.

 

Kenya

Central bank warns against cryptocurrency: The Central bank of Kenya (CBK), through its governor, has once again warned against trading in cryptocurrencies. Its governor, Patrick Njoroge, appeared before a parliamentary committee on finance and gave statements in response to a question from one of the lawmakers.

He said that it was not the first time that the CBK has warned against trading in cryptocurrencies. Back in December 2015, the bank also gave out stern warnings against virtual cryptocurrencies like Bitcoin. However, the governor is at the same time interested in trying out blockchain as a technology.

IBM deploys blockchain-based microfinancing service for food kiosk owners: IBM announced on 18 April that its researchers will soon roll out a new blockchain-based microfinance solution in Kenya later this week in partnership with Twiga foods. Twiga Foods is a B2B coordination platform for kiosks and food stalls in Africa and had previously expressed interest in using innovative financial service offerings to its customers.

According to IBM researcher Isaac Marcus:

“We analyzed purchase records from a mobile device and then apply machine learning algorithms to predict creditworthiness, in turn giving lenders the confidence they need to provide microloans to small businesses. Once the credit score is determined, we used a blockchain, based on the Hyperledger Fabric, to manage the entire lending process from application to receiving offers to accepting the terms of repayment.”

 

Zimbabwe

Bitcoin trading gains ground with new crypto exchange and ATM: Cryptocurrency trading is becoming a popular trading option in Zimbabwe with the addition of a new exchange and ATM in the country. Exchange Golix was already operating in the country for some time and now the competition has increased with Styx24 also accepting applications for cryptocurrency trading.

The cryptocurrency scene is a welcome respite for Zimbabweans that are facing hyperinflation with the government recently printing 100 trillion dollar bills that can only buy basic items. It is a widely held consensus that the fiat system has destroyed the economy and people are now looking at cryptocurrencies to help quell this hyperinflation.

 

Israel

Tightening crypto regulation: The Israeli financial watchdog Israel Securities Authority (ISA) is tightening control over cryptocurrency asset companies registered in the capital Tel Aviv’s stock exchange.

The companies have been given documents that are seen as tightening of crypto-related developments in the country. According to the government agency, the move was done to protect investors from the volatility and risk that comes with investment in cryptocurrencies. As of now, all cryptocurrency setups that deal, hold, invest or mine are being told to keep away from the public.

 

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Emily Spaven – Kipochi Links Bitcoin With M-PESA

Emily Spaven – Kipochi Links Bitcoin With M-PESA:

Finance author Emily Spaven (@EmilySpaven) describes the launch of Kipochi (@KipochiPay), a Bitcoin wallet that provides interchange to and from M-PESA.  Excerpts:

“Kipochi has launched a product that allows people in Africa to send and receive bitcoins, plus convert them to and from the Kenyan currency M-Pesa.”

“Kipochi works on all mobile phones as it has SMS, USSD and HTML5 frontends, so there is no requirement for users to have the most up-to-date handsets.”

“Pelle Braendgaard, co-founder of Kipochi [said that] M-Pesa has been around in Kenya for years now, so mobile money is a part of everyday life in the country, which means it will be easy for Kenyans to accept digital currency as the choice for international payments.”

“Kipochi’s goal is to make it easier for people in these [communities of expatriates from Kenya and foreigners living and working in Kenya] to send and receive funds through the bitcoin network.”

“LocalBitcoins.com has also recently turned its attention to M-Pesa, making this option available to traders in Kenya and Tanzania.”

“‘The [tens of thousands of] M-Pesa agents are the target market of LocalBitcoins.com as well,’” [explained  founder Jeremias Kangas].”

 – http://bit.ly/15bcWnr
 – http://www.Kipochi.com
 – http://bit.ly/132zNi5 (Further discussion of Kipochi)

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