Mario Egie Follow Feb 14
· 6 min read This is the last of three series of articles on cryptocurrencies, NFTs, Metaverse, and an evolving Africa.
See Part 1 , Part 2
Africa, Then and Now Earlier I mentioned how revolutions usually take time to get to all regions of the world, in some cases, such as the industrial revolution, the lag could be about a century (See part 1).New inventions sometimes rely on previous ones and lags may be carried over into newer revolutions.
The digital revolution, also known as the third industrial revolution consists of several periods and inventions, such as the invention of the internet and home computers (1969–1989), the invention of the worldwide web, web 1.0 (1989–2005), web 2.0, social media, smartphones, digital TV (2005 — present).With the rise of cryptocurrencies and blockchain technology, a new version of the web is being invented called; web 3.0 where DApps (decentralized applications) will dominate the worldwide web.
Source: Wikipedia, List of countries by number of internet users In 2005, just 2% of Africa’s population were internet users, compared to Americas’ 36% and Europe’s 46%.In 2019, Africa’s internet users grew to 28.2% a relatively low number compared to Europe’s 82.5% and Americas’ 77.2%.Africa‘s smartphone penetration is amongst the lowest by regions globally, and mobile adoption is still higher when compared to smartphones.
Cryptocurrency in Africa
According to new research by Chainanalysis, Africa has the smallest crypto economy, however, it is one of the fastest-growing markets for cryptocurrency adoption.
Major factors highlighted by the research as key trends in Africa’s 1,200% crypto market growth in a 12-month period are; grassroots adoption, increasing popularity of peer-to-peer (P2P) platforms, crypto-based remittance and crypto as wealth preservation.
Grassroots adoption was analyzed using retail-sized transactions, and comparing the percentage of this to the global average which is 5.5% of the region’s transaction, for Africa this was estimated to be 7%.
P2P growth comes from the challenges crypto exchanges face from some African governments, like the case of Nigeria, where the Central Bank of Nigeria passed a memo to all regulated financial institutions to stop doing business with crypto companies.With such an embargo in place, crypto users turn to p2p as an alternative for crypto on-ramp and liquidation.
Similarly, Africans have been using crypto to leapfrog traditional finance as it applies to remittance and cross-border payments.The Central Bank of Nigeria has pegged dollars to ₦416 as of the time of writing, but with the shortage of dollars in the market, Nigerians are forced to buy dollars at parallel markets which sell around ₦570 per dollar.
Nigerians have thus resulted to using crypto to remit and make cross-border payments.According to Chainanalysis, Africa received $48 billion as remittance via crypto in 2019, with 50% going to Nigeria.
The expensive nature of remittance in Sub-Saharan Africa is also a major factor, Africans have resulted to using crypto for lower fees and speed.
Devaluation is the fourth trend that explains the surge of crypto adoption and usage in Africa.With countries like Nigeria and Zimbabwe facing currency devaluation, Africans have turned to crypto as a means of wealth preservation and a viable solution to avoid devaluation.
NFTs, Metaverse in Africa
It’s still relatively early to speak much on NFTs, metaverse and how they will be adopted in Africa, however, we can try to make guesses with what we know about cryptocurrencies and the adoption of the digital age.
NFTs or Non-Fungible Tokens are non-interchangeable items/assets with digital representation on the blockchain, for security and immutability.
NFTs take several forms, which include digital artworks, jpegs, music, videos, etc.The use cases for NFTs are currently limited but this could change rapidly as the metaverse may find a good way to incorporate them into its experience.
A metaverse party that uses the NFTs’ form of ticketing would be a good example.
Metaverse, on the other hand, is a virtual representation of our world on the internet, thus allowing us limitless possibilities, such as virtual workspaces with a shared space experience, giving us that physical feel.Virtual hangouts with friends, virtual homes, parties, the list go on.
These virtual worlds are either accessed via avatars or with special devices created to facilitate their experience.A good example of such devices is Meta’s Oculus and Microsoft’s Hololens.
The problem Africans may face with adopting NFTs will most likely come from its limited use cases.A lot of Africans still struggle to attain financial well-being, with about 80% of the African population living under $5.5 per day.With an estimated 490 million people living under extreme poverty as of 2021, food is a major competitor to most products and services.
As the trends for the growing adoption of crypto has shown, Africans use crypto to solve several problems that plague their financial well-being and consequently their survival.
In such a market, NFTs will not be easily adopted for the sake of just trading or as collectibles.Africans may demand a means to an end with NFTs before a growing adoption becomes evident.
The metaverse will be met with some challenges.People simply want to survive, and only projects that provide them with a better life not just collaboration or social bondings will be greatly adopted.For example, the penetration rate of smartphones compared to mobile phones; the former is more expensive and prior to the arrival of Infinix and Techno in Africa, which brought affordable smartphones to the market, as oppose to expensive smartphones like iPhones which a lot of Africans could not afford.
The case of affordability will greatly determine the adoption of a metaverse in Africa, an Infinix or Techno-like product may be needed for VR/AR headsets to speed up adoption.
Conclusion Africa has lagged in previous industrial revolutions, and while there is still lower adoption of smartphones, and the internet compared to other parts of the world, these gaps are nothing compared to previous revolutions.
Blessed with a youthful population, Africans are adopting modern technologies like crypto at a neck-breaking pace.With projects dedicated to improving the well-being of Africans, it is sure that Africans will speedily embrace such projects to solve their current problems and thus keep the pace with the rest of the world.
References/Further reading Cryptocurrency — Wikipedia A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a… en.wikipedia.org
The First NFT Billionaires: OpenSea Founders Each Worth Billions After New Fundraising The NFT craze has minted its first billionaires.The founders of buzzy blockchain startup OpenSea have joined the… www.forbes.com
Dot-com bubble — Wikipedia The dot-com bubble, also known as the dot-com boom, the tech bubble, and the Internet bubble, was a stock market bubble… en.wikipedia.org
Introducing Microsoft Mesh | Here can be anywhere.Connect and collaborate with a feeling of presence through personalized avatars and immersive spaces.
Spark creativity… www.microsoft.com
Welcome to Meta | Meta The metaverse is the next evolution of social connection.Our company’s vision is to help bring the metaverse to life… about.facebook.com
The 2021 Global Crypto Adoption Index: Worldwide Adoption Jumps Over 880% With P2P Platforms… This blog is a preview of our 2021 Geography of Cryptocurrency report.
Sign up here to download the whole thing! We’re… blog.chainalysis.com
How DeFi is helping Africa leapfrog traditional banking With six African countries in the top ten fastest-growing economies in the world and the continent being… nairametrics.com
Facts and Figures | UNCTAD Inclusive growth is growth that reduces poverty and inequality Poverty levels declined in most African countries: On… unctad.org.
