Addis Ababa — The expert group meeting on blockchain technologies ended in Addis Ababa with participants having learnt more about the technology and possible benefits for the African continent.
Speaking at the end of meeting, Kasirim Nwuke, Chief of the New Technologies and Innovation Section at the Economic Commission for Africa (ECA), said; "We have learned that BC is an emerging technology with a breakthrough potential. We have learned harnessing this technology will require huge investments and that careful evaluation by member States and firms is needed not only to determine the suitability of the technology to help mitigate identified needs but also return on investment."
He said discussions during the week have shown that there are many areas of application of blockchain technology, for example in the supply chain, shipping logistics, food production, luxury manufacturing, pharmaceuticals.
A lot of discussion focused on bitcoin, the cryptocurrency, which first rose to prominence in advanced industrial nations like the United States, and remains most widely used within such countries.
From Zimbabwe and South Africa, participants learnt that the bitcoin, cryptocurrency, has value even in the context of poor developing African countries. And this, in spite of serious still-to-be-overcome technical and systems security issues.
From Kenya they learnt that bitcoin and blockchain technology can play an important role in building social and solidarity finance, in promoting financial inclusion and bottom-of-the-pyramid business efforts. From the Netherlands, they learnt how blockchain technology can help with identity registration and civil registration.
They also heard a number of narratives about why the cryptocurrency, bitcoin, may be empowering for people in less developed countries. Reasons for this include:
Bitcoin as a means to facilitate low-cost remittances for those seeking to transfer small amounts of money internationally
Bitcoin as a means for an otherwise excluded individual to have a decentralized global bank account, accessible simply by downloading an open source wallet from the internet, rather than having to set up with a formal financial institution
Bitcoin--or the technology that underpins it--subsequently providing the basis for a richer set of financial services remittances and small-scale international trade. Bitcoin has the potential to be used as an intermediary currency between other, more dominant, currencies, and thus may be useful for remittances.
"We acknowledged that the technological environment for blockchain adoption in Africa remains challenging. Implementing blockchain requires a change in the record systems of transacting parties to evolve a common data structure," said Mr. Nwuke.
"Put differently, blockchain solutions require significant changes to existing systems. This is an effort that is not only technically demand but also complicated and expensive. Further, we have to replace our current ways, notably, Near Field Communications, of linking physical products with digitization."
Control, security and privacy remain serious concerns, he said, adding cybersecurity concerns have to be addressed before blockchain can be fully embraced. And cultural issues too.
Participants also acknowledged that there are some areas of blockchain implementation that are highly contingent upon supporting legislation and or regulation. These include mobile bitcoin, property records, legal contracts, and dis-intermediation of financial institutions