- In 1991 Stuart Haber and W. Scott Storenta were the first to perceive blockchain technology.
- Bitcoin became the pioneer of blockchain technology in 2008 and the first cryptocurrency.
- Currently, the value of all existing cryptocurrencies is $804 billion, with around $320 billion attributed to Bitcoin, according to CoinnMarketcap.
The crypto economy within Africa is a vast growing franchise that has significantly contributed to the rapid Web3 adoption on a global scale. It was the first aspect that successfully implemented the concept of blockchain technology. However, blockchain technology has rapidly grown in Africa’s ecosystem. Today there are numerous blockchain applications in agriculture, hospitals, and education. Thus this begs the question is cryptocurrency genuinely detrimental to the long-term goals of blockchain? Or are the demerits of cryptocurrency simply dragging down the final dream of full adoption of web3 technology?
The first iteration of web3 adoption
Many might not know that the first ever step that Web3 occurred even before it got its name. In 1991 the first instance where Stuart Haber and W. Scott Storenta perceived blockchain technology. Their work mainly compromised on creating a cryptographically secured chain of blocks whereby no one could tamper with its details.
This later formed the fundamental concept of blockchain technology. In 1992 they upgraded their system to incorporate Merkie trees that enhance efficiency. This upgrade would later form blockchain technology’s scalable and efficient attributes today. It allowed a single block to accommodate numerous documents and information.
Also, Read Africa: A closer look into Web3’s evolutionary transition into the digital economy.
Satoshi Nakamoto later upgraded these fundamentals. He created cryptocurrency, the first iteration that would usher in the age of Web3 adoption in Africa and around the globe.
Bitcoin and Ethereum
Bitcoin became the first of many blockchain applications in 2008 and the first cryptocurrency. Satoshi Nakamoto released the first whitepaper containing all the intricate details of the first application of blockchain technology. Soon after, innovators and entrepreneurs took this idea and conceptualized it to create what we know today as the crypto Industry.
Bitcoin was the first to apply Web3 technology and soon acquired even more fame as its value continuously increased. It was only a matter of time before others saw the potential within the industry, and thus the Ethereum project commenced in 2013.Despite being the first, bitcoins expressed various demerits of crypto. Viltalik Buterin highlighted these demerits and thus later created Ethereum. Keep in mind Ethereum was never created to be a rival cryptocurrency. Instead, he created it to further enhance web3 adoption around the globe by improving Bitcoin’s system. Vilatik launched Ethereum blockchain in 2015. Although its native crypto coin Ether gained much fame, it stuck to its primary objectives and offered a controlled environment that would ensure the rapid growth of Web3 adoption in Africa and the globe.
After Bitcoin and Ethereum showcased that the initial concept of blockchain technology is achievable and has room for improvement, the Web3 community erupted. Crypto exchange platforms were popping up from various parts of the world, each presentin a new and improved version of the last. This rapidly increased the Web3 adoption rate, and everyone turned to Africa as a breeding ground for Web3.
Also, Read Nigeria: The future of Web3, crypto ahead of 2023 elections.
Is cryptocurrency dragging down Web2 adoption in Africa?
Cryptocurrency has proven helpful to the goals of Web3 over the years. Africa’s crypto ecosystem has played a vital role in its rapid adoption rate. Unfortunately, despite its many wins, we cannot deny that crypto has caused many users to question the practicability found within Web3 adoption. Over the years, legitimate and illegitimate users have pushed the limits and boundaries of the applications of blockchain technology found within cryptocurrency.Currently, the value of all existing cryptocurrencies is $804 billion, with around $320 billion attributed to Bitcoin, according to CoinnMarketcap. Unfortunately, the crypto industry has lost a significant amount of its gain. In 2022 alone, the crypto industry lost $3.9 billion through crypto hacks, scams or volatility. No matter what angle you may want to perceive but the concept of cryptocurrency has experienced as much damage as it is good.
One of the significant demerits of crypto is its crypto volatility. Because of its unstable nature, its adoption rate is below its expected number. Bitcoin alone fell from $65,000 and is now struggling to pass its $20,000 mark. The utilization of its blockchain technology is indeed revolutionary. Its incorporation within Africa’s crypto ecosystem led to the discovery of the fintech industry, but it also posed other problems. Blockchain security is still a new concept and a relatively progressing project. This means that despite its decentralized and immutable nature, it’s still highly susceptible to hacking.
Also, Read Crypto gaming: The multi-billion industry of 2023.
By highlighting all the escapades that transpired in 2022, we can vividly depict all the demerits of crypto. Thus this generally puts the main question to concern; is crypto a benefit to the inclining growth of Web3 adoption in Africa?
We may need crypto, but only for a short while
One of the significant aspects that contributed to the rapid growth of blockchain applications in Africa is its crypto trading volumes. Currently, Nigeria ranks in the top three countries in the globe to have the highest crypto addiction process. Using cryptocurrency was the perfect strategic move to usher Web3 adoption in Africa, but it can only do so much. It is more accurate to state that the application of cryptocurrency showcased the practical nature of blockchain technology.
In doing this, many African innovators stepped forward and were able to isolate the blockchain technology underneath and apply it in different sectors. The creation of Agritech has led to innovators building systems that can alert farmers of whether or not the climate will change or adhere as predicted. Blockchain in education enables schools to have efficient administration and certificate issuance systems. These are all but a few examples of blockchain application thriving in Africa.
Unfortunately, cryptocurrency only plays a role within the financial sector. This limits its capabilities and volatile nature, making it a much lesser option than CBDCs. The Web3 adoption rate in Africa owes cryptocurrency plenty. It was the perfect entry strategy, and Africa’s ecosystem served as an efficient environment to bring closer the goals of Web3.
Although when looking at it in the long term, the demerits of crypto may soon outweigh its overall benefits. There are currently numerous applications of blockchain technology, each gathering and solving the various demerits of crypto. In hindsight, cryptocurrency is holding web3 adoption back in Africa. The constant back-and-forth standard crypto has led to mixed feelings about its place in Africa’s ecosystem.