Blockchain Revolution

Blockchain Revolution

Written by Anton Baumann and Mark Fitzjohn

When the average Joe hears about blockchain, he’ll be forgiven for thinking “cryptos,” but there’s a lot more to blockchain technology than the cryptocurrency market.

Besides “blockchain”, there is also a tendency for people to hear the terms “bitcoin” and “nonfungible Tokens (NFTs)” and associate them with cyber crooks or anyone who became rich overnight. All over the world, blockchain is not just creating Bitcoin millionaires, it is being used to unlock the future digital economy, decentralized financial services, smart contracts, service delivery bottlenecks and much more.

In South Africa there is an emerging technology ecosystem comprising of the blockchain community that is exploring and promoting the prospects of technology far beyond its use in the unregulated cryptocurrency market.

Is it possible for this community to have the vision and foresight to implement and develop the economy of the future where inclusion, privacy, security and cost-effectiveness are possible? We believe so.

“We believe the economy works best when it works for everyone, and this new platform is an engine for inclusion,” says Don Tapscott, a blockchain expert, consultant, and author.

Cyber ​​security expert Dr. Mashael Al-Sabah wrote in MIT Technology Review That “technologies like blockchain do not guarantee anonymity, but with the right understanding, they can provide privacy, security and even freedom.”

Why blockchain?

Web 3.0 refers to the third generation of the Internet, which is a decentralized online ecosystem based on the blockchain. The term was first used in 2014 by computer scientist Gavin Wood, co-founder of Ethereum, the decentralized blockchain platform behind the cryptocurrency Ether (ETH).

Web 3.0 is a new iteration of the World Wide Web that includes decentralization, blockchain technologies, and a token-based economy.

Blockchain is a digital ledger recording information that cannot be easily erased. Each change or modification to the ledger forms a new block in the chain, creating an immutable public record. The data stored on the blockchain is decentralized, it is not stored on a single computer or server but is scattered.

While the blockchain may be generally associated with bitcoin and cryptocurrencies, it has other permanent decentralized database applications that are used to improve service delivery. With blockchain technology, governments can safely store huge amounts of data they have access to — such as births, deaths, marriages, divorces, and many licenses and medical records. Imagine the red tape, corruption, and administrative hurdles that a blockchain can eliminate.

In their book, Blockchain revolution, Alex and Don Tapscott write about the benefits of using blockchain technology to support transactions. Blockchain technology can financially transform our world by improving how we store our money and do business to make it more fair, transparent and free of corruption.

Tapscotts’ book highlights the following benefits of blockchain:

  1. It is almost impossible to tamper.
  2. Blockchain technology makes everything related to finance faster, cheaper and more equal than current banking systems.
  3. Blockchain has many uses, including privacy and transparency.
  4. Blockchain can tangibly improve service delivery by enhancing transparency and ensuring decentralization.

Governments are changing their views on the uses of the blockchain

Until recently, central banks generally prohibited financial institutions from providing banking services to crypto companies. But things are changing.

according to Victoria Lemieux and Jim Diner from the World BankOver the past few years, governments in many countries have been experimenting with applying this new technology to a variety of jobs and services, including land registration, educational accreditation, health care, procurement, food supply chains, and identity management.

South African banks have previously said they are banning cryptocurrency exchanges. However, the prudential authority of the South African Reserve Bank (SARB) recently announced that South African banks will now be able to work with cryptocurrency exchanges in South Africa.

Work day It reported in July that SARB plans to put its rules on crypto assets into effect within the next 18-24 months, joining other central banks around the world and considering regulating the sector.

According to SARB Deputy Governor Kobin Naidoo, coded noise bears all the hallmarks of a Ponzi system or pyramid scheme. However, there is a real consideration for the technology and its possibilities in the field of payments.

The Reserve Bank of South Africa outlined its intention to regulate cryptocurrency in South Africa, namely:

  • Declare crypto assets as a financial product (therefore listing them within the Financial Intelligence Center).
  • Establish a regulatory framework for exchanges, for platforms, have the basics of know your customer [Know Your Customer]Comply with exchange control laws, tax laws, and other laws.
  • Make sure to provide a “health warning” that informs consumers that purchasing crypto assets can cause them to lose money and that it is not equivalent to a bank deposit.

The growing acceptance and demand for coding skills

According to Hannes Wessels, Head of Binance SA,The most significant impact of cryptocurrency going forward is likely to come from the steadily increasing acceptance of its function as a decentralized finance solution.

In Africa, cryptocurrency is used to make and receive daily payments for goods and services. A policy brief released in June by the United Nations Conference on Trade and Development showed that 7%-9% of people in South Africa, Kenya and Nigeria regularly use digital currencies to pay for goods and services.

While the Wall Street giants have mostly avoided the spot market for cryptocurrencies due to regulatory uncertainty and “know your customer” rules, they are now exploring broader avenues for blockchain in areas such as payments and supply chains.

Bloomberg Reports indicate that Citigroup, Goldman Sachs, and JPMorgan Chase are looking for employees with blockchain expertise as the technology that powers the cryptocurrency markets continues to attract the attention of bank clients and regulators.

For blockchain to realize its immense promise and enormous potential, developers must build trust in the technology and its applications, but this is likely to happen with increased regulatory frameworks implemented by governments and regulators. Either way, it will be the basis for the free market and democratic and prosperous economies of the future.

#Blockchain #Revolution

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