Blockchain Industrial Revolution in Africa

Published in

Coinmonks

6 min readFeb 23, 2019

(II)

There have been countless times my card was declined when trying to get some online transactions done. Times when I try to buy or pay for some goods, services among others and if this could happen to me, it would have happened to millions more. Unknowingly, these companies have put in place a system that limits their patronages and daily returns. But then, the good news is that there is a solution, a fast and competing payment option using digital transactions. Just like most banks do prefer to have series of confirmation messages sent to emails and mobile numbers of the card holder, we also have confirmation time for blockchain transactions to verify the legitimacy of the transaction and the actual balance in the transacting wallet. Considering the possible delays in mobile phone network service among others, I would say both options are equally considerable with blockchain transactions offering a whole lot more.

Among the many more other advantages are the transparent currency transactions without limitations. Some common issues with African banks revolve around having failed transactions which would be deducted from the sending account but won’t be remitted into the beneficiary’s account. Under these circumstances, both parties are unable to verify the exact location of the funds or able to do anything without the intervention of the banks. Counting on the banks to assist in this case takes between 24 hours to several months to have the issue rectified. Digital transactions using cryptocurrencies was the first boom for blockchain and its advantage was well enough but then was explored further which gave birth to many other uses. In this age, companies need to put their customers first to keep them by making options available such that will endeavor their patronage is carried out with ease.

Sonangol Group:

Just like we have Sonatrach for Algeria, Sonangol is the parastatal that oversees petroleum and natural resources in Angola. Being a state-owned company employed to manage the country’s supply of petroleum and natural gas, Sonangol employed the assistance of Algerian Sonatrach and Italian Eni. All was flourishing till a sitting government dissolved the entire board members to be replaced by a chairwoman, only to be rectified by the new government to uncover the funds mismanagement the whole plot was meant to serve and cover. The losses and embezzled funds were in millions of dollars. Among the missing funds which was never really explained was the 32 billion dollars transferred between 2007 and 2010 by the Angola government.

A whole lot of good deeds go unnoticed because of little transparency. A little bad deed can unequivocally annulled all deeds, good or not in the sight of the populace. Sometimes, when some government officials are found guilty of a certain corrupt practices, I find it difficult to blame them. It’s so easy to blame the system if you see where I’m coming from. The mind of every man is ordinarily corrupt or prone to being corrupted, this we all know. Then we brought forward of a system of secrecy and hidden operations. Did we not know the difficult temptation these will bring to the employees? A transparent system makes it easy for the good heart to avoid such temptations and will even serve as a valid excuse if a powerful undue influence attempts to connive anyone into the unjust act. This is where the blockchain comes in, a public blockchain.

A year back, there was a move towards a reform that focus on dismemberment of Sonangol. It was believed that it will help in making the country more attractive to international oil operators to work and invest in the country which is very important for the country as it needs to boost government revenues and also increase oil exploration activities. This reform poses a threat to the investors with increased middlemen having to face what was termed “power wars”. Sonangol, ANPG, and the new Ministry of Mineral Resources and Petroleum would become the new face and organization. One issue with too many middlemen is that it becomes difficult to get jobs done. This asides from the Idea 1 explained in the immediate past article is a real use case for the blockchain as the technology makes it easy to remove middlemen in instances where activities can be automated using Lightweight contracts (smart contracts). This way, the business transactions are done openly, and faster.

Food for thought

From barter to the roaring lion coin in 600BC in Lydia, to the first bank note in 1661 AD, and the first credit card in 1946 and then to digital currency in our age. This has been the major transformation in our financial system over time. Each with an advantage over the other but then, the previous forms aren’t all bad as they even had few advantages over their replacements. Barter most importantly have a lot of ways through which it was deemed very Important and perhaps even better than the paper currency. In my own view and analysis of how barter worked, I perceived each good to be treated as their own currency which is what a single paper currency can’t attain; not accurately while serving as a means of exchange for thousands of other products. The paper currency or the coins, not even the credit cards could serve this purpose but in recent times, the digital currencies have served it in a way perhaps unknown to many.

Stocks represent ownership interest in a corporation which entitles the holders to dividends which are a sort of distribution of the corporation’s profit to its owners. This is similar to the pattern now followed by the STOs. On the other hand, ICOs when carefully practiced represents a form of barter. Each company issues units of value for the products/services they planned on delivering and in the hope that it would be widely demanded after launch, which will lead to an increase in value/price, people buy/invest in the offering. When accurately observed with an example, say company A after discovering a how to produce stone that combines with water and starts a fire decided to go into production. He envisaged the capacity to produce one million quantity of such stones yearly so he decided to raise funds in advance of his production to set up the company. The analysis shows that each stone in the market would sell for at least a dollar each. So, he offered a token for a perhaps a dollar in his ICO which means a token would equate to a stone and people bought in advance, not solely because they want to resell, but because the wanted to be an end user. This same story was the story of how other thousands of companies, countries sold out products, resources in estimated value of their goods. It becomes easier to trade one for another. Three tokens of company A which means three fire stones can get exchanged for what you need, say five tokens of company Y which is equivalent to 5kg of chicken.

So, when next you trade a crypto for another on those exchanges, think of this. You are trading one product for another by barter exchange. At least should have been in my own opinion. And a single product should only require one token, not multiples. Farmers, manufacturers, oil companies and so on need not to store their goods but can be transferred to the point of exchanges, stores and pipelines where the buyer would exchange the tokens in return for their goods and services. Guess what, everything goes on the blockchain and made transparent. This perhaps calls for the attention of OPEC and other Oil exploration association to look into the possibility of having a single Oil token on one platform. So, from the food for thought, we now have our IDEA 3.

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Blockchain Industrial Revolution in Africa

Sonangol Group:

Written by Adedayo Adebajo