Bitcoin may have taken Kenya by storm, thrilling a generation of young tech-savvy entrepreneurs hungry for alternative investments but it is not just the currency side of the technology that is making waves in Africa. Financial intermediaries are afraid of it, they do not understand.
It is the same thing that happened when fintechs were becoming more successful. The fact we can move money borderless without fees scares them.
Bitcoin may make headlines when its value crashes or climbs, but the blockchain technology behind the controversial cryptocurrency could help Kenya overcome some of its economic growth challenges. Bonga points and supermarkets points are examples of cryptocurrency.
Blockchain could present new ways to help overcome challenges, which continue to stymy the county’s growth. Corruption and fraud are classic problems yet people are still looking at them through the lens of how we have always tried to solve them in the past. Blockchain offers a new approach to combatting corruption because of its ability to create and store encrypted records that can be verified, but not altered or deleted.
We need to fully embrace the way technology can offer new solutions to these age-old problems, to make tendering and procurement processes more efficient, the government should also embrace blockchain technology.
This could help rid the authorities of the losses that come from errors and fraud. Each layer of new data encrypted in a blockchain increases the integrity of the layers below it, so no single data set can be deleted or manipulated in any way. However, it is not just this layering process, which ensures that data stored on a blockchain is so secure.
The blockchain is also decentralised — which means it simultaneously stores data on a large number of computers instead of just one.
Blockchain makes use of a distributed ledger. A traditional ledger — that is a book or piece of software used to record transactions — only stores transactions in one place. Blockchain stores each transaction on a network of millions of computers around the world, which makes it virtually unhackable.
In Kenya, you can be having a title but the land does not belong to you, cartels are able to manipulate lands records. Through blockchain technology keeping records, which need to be protected from fraud and corruption is very easy. Property deeds, identity documents, hospital records and vehicle registration documents can all be securely stored using blockchain technology.
Imagine we could place public finances on a blockchain accounting system where each transaction is recorded and can be traced. This can greatly improve transparency through ensuring there is an inalienable record of every governmental transaction, which can be used to verify that funds are spent appropriately.
The decentralised nature of blockchain also means that this technology can be implemented without the need for large infrastructure upgrades.
All you need is a data-enabled mobile phone. A system can be built and housed anywhere in the world and still be accessed from Kenya.
Infrastructure does not need to provide the bridge that gives Kenya access to these technologies anymore, your smart device can now become that bridge.