A popular influencer insists that buying a particular token is the smartest financial move you will make this year.

Everywhere you look, someone is pointing you toward the next big crypto opportunity that may give more returns than Bitcoin. It feels exciting, fast, and full of promises. It also feels like everyone else is getting rich without you.

This feeling has a name. The fear of missing out, often called FOMO, has become a driving force in the world of cryptocurrency.

Many people today are drawn into digital assets by the hope that their money will rise quickly in value.

Phrases like going to the moon have become part of everyday conversations about crypto. But behind all the excitement, there is also a need for understanding.

Crypto can be rewarding, but it can also be confusing and risky. To make wise decisions, we need to look beyond the hype.

The Superbowl Effect and the Power of Influence

One moment that showed the cultural rise of crypto was Superbowl LVI. During one of the most watched events in America, several crypto companies paid for prime advertising time.

They wanted millions of viewers to see that crypto was the future and that they should join in. Coinbase, a crypto exchange, even displayed a simple QR code on the screen. This alone led to more than twenty million visits to their website in one minute.

But the hype had consequences. If a viewer invested one hundred dollars in Bitcoin on the Monday after the Superbowl, that investment would be worth about forty eight dollars by July of that same year. This means more than half the value disappeared. If all twenty million viewers had invested one hundred dollars each, their combined loss would be over one billion dollars.

This example reveals something important. Excitement can push people into quick decisions, but excitement does not erase risk. Crypto can rise fast, but it can also fall fast. Understanding it is essential for anyone thinking about investing.

What Exactly Are Crypto Assets?

Crypto assets are digital assets. They exist only in electronic form. While they were originally created as a way to make payments, many people today treat them as investment tools. The idea is simple. You buy a crypto asset like Bitcoin or Ethereum and hope its value increases.

But this hope comes with risk. A risk is the chance that your investment may lose value. This has happened many times in the crypto world.

Bitcoin, the first and most popular crypto asset, has experienced large rises and large declines. Even though it is considered one of the most stable coins, it has lost almost seventy percent of its value during some periods.

Crypto asset market capitalization refers to the total value of all units of a particular asset. In November 2021, all crypto assets combined reached a value of about $2.9 trillion dollars. By mid 2022, almost $2 trillion dollars of that value had vanished.

Some people, including well known investors like Bill Gates, question the idea of crypto as a strong investment. Gates argues that crypto value depends mainly on what someone else is willing to pay, rather than on a product or service that benefits society.

To understand crypto properly, it is helpful to look at where it comes from.

The Technology Behind Crypto

Distributed Ledger

Blockchain technology forms the heart of crypto assets. A blockchain is a digital ledger that records transactions. For example, when people buy or sell Bitcoin, the information is stored on one shared public ledger.

Every transaction must be verified before it becomes official. This is done by a network of powerful computers called miners. Miners solve complex math problems to confirm each transaction and are rewarded with new Bitcoin.

Once a group of transactions is verified, it is placed into a block. Each block connects to the one before it, creating a long chain. This is why it is called a blockchain.

Decentralized System

The blockchain is not stored in one place. It is spread across many computers around the world. This means no single government, company, or person controls it.

The creator of Bitcoin designed it this way to avoid control from any central authority. Unlike traditional digital payments like PayPal or bank transfers, Bitcoin allows people to transact directly with one another. This is known as peer to peer interaction.

Cryptographic Protection

The word crypto comes from a Greek word that means hidden. Cryptography protects information and ensures secure communication. With crypto transactions, special encryption keys act like digital signatures to confirm a user is the real sender. This creates trust without needing a central authority.

Why So Many Crypto Assets Exist

Once the world understood blockchain technology, developers began creating many different crypto assets. These assets are like different apps built on similar technology, each with a unique purpose.

Here are common types of crypto assets:

1. Cryptocurrencies like Bitcoin are used for payments, storage of value, and trading.
   
2. Stablecoins like Tether are designed to keep a stable price by matching the value of another asset such as the dollar.
   
3. Meme coins like Dogecoin are inspired by internet humour and often have no clear use.
   
4. Non fungible tokens often called NFTs represent ownership of unique digital objects.
   
5. Utility tokens like MANA allow users to participate in specific digital platforms.
   

The variety shows both creativity and speculation in the crypto world.

The Dark Side of Popularity

Crypto has become a target for scams. The Federal Trade Commission reported that scammers stole more than one billion dollars in crypto from forty six thousand people since 2021. Young adults between 20 and 49 years old are most affected. Almost half of these scams began with a message or advertisement on social media. Many scams promise huge profits but end in complete loss. Once you send your crypto, there is no way to reverse the transaction.

Regulation and Protection

Authorities are paying closer attention to crypto. The United States Securities and Exchange Commission, also known as the SEC, has increased its efforts to supervise crypto activity. In 2022, the agency doubled the size of its crypto enforcement team.

At the time, President Biden also issued an executive order to address both risks and benefits of crypto.

Despite these efforts, crypto is still not monitored as closely as traditional investments.

Smart Choices Before You Invest

If you ever choose to invest in crypto, consider these points:

1. Only use money you can afford to lose.
   
2. Be cautious of celebrity endorsements. Many are paid promotions and may not reflect real financial wisdom.
   
3. Do your own research before trusting online suggestions.
   
4. Protect yourself from scams by avoiding offers that promise guaranteed profits.
   

Celebrities and influencers may also invest in the assets they promote, which means they benefit from price increases. Their priority may not be what is best for you.

Learning Crypto the Easy Way with MEXC

You can learn about crypto in a simple and confident way by using MEXC. The platform provides clear learning materials, practical guides, and beginner friendly explanations that help you understand how crypto works without confusion.

MEXC Learn offers lessons on key topics such as blockchain, trading, and risk management, while the MEXC app gives you real time market updates that help you learn by observing real activity.

Through its live sessions, community discussions, and helpful support team, MEXC makes it easy for anyone to grow from a curious beginner into an informed crypto user.

Conclusion

Cryptocurrency began as an innovative way to make payments. Over time, it became a global investment trend. Blockchain technology changed how we record transactions and opened the door for thousands of digital assets. Yet crypto remains unpredictable. It has created wealth, but it has also caused significant losses.

To navigate the crypto world safely, knowledge is essential. Look beyond the hype. Study the risks. Be aware of scams. Never invest more than you can handle losing. Crypto is fascinating and full of potential, but it demands careful understanding.

That understanding begins with asking the right questions and not letting excitement make decisions for you.

Risk Disclaimer: The information provided in this article regarding cryptocurrencies does not constitute investment advice. Given the highly volatile nature of the cryptocurrency market, investors are encouraged to carefully assess market fluctuations, the fundamentals of projects, and potential financial risks before making any trading decisions.

Rume Ophi, widely known as the “Cryptopreacher” for his pioneering work in crypto education across Africa, did not mince words in his scathing critique of the $Davido meme token.

The coin, launched May 29th on the Solana blockchain, saw a meteoric rise soon after its release, with its market capitalization surging past $10 million within 24 hours as Davido’s 15 million social media followers piled in.

However, in the 8 hours that followed, over 80% of that value had been wiped out, with the meme coin’s market cap plummeting to just $2.1 million amidst a massive selloff.

According to crypto data outlet DailyCoin, records show that Davido himself extracted a staggering $474,000 from the token during this period before cutting ties entirely.

According to Lookonchain, Davido created the token on May 29 using the popular memecoin launchpad Pump.fun. The singer received 7.5 SOL ($1,275) as start-up capital and spent 7 SOL ($1,190) to buy 203 million DAVIDO (20.3% of the total supply.) 11 hours after creating the memecoin and promoting it on his X social account with 15.3 million followers, Davido offloaded 121.88 million DAVIDO for 2,791 SOL, generating about $474,400 from the sale.

“If you bought the $DAVIDO meme coin expecting to cash out profits, I’m here to tell you that you were outright scammed by Davido himself. This is textbook behavior for a crypto rug pull scam,” Rume who is also an analyst on Channel TV and other media platforms warns.

Ophi argues that Davido’s quick exit from his own token launch, pocketing over $140,000 while leaving his fanbase holding the bag, constitutes a brazen iteration of this scheme.

“One of the earliest, brightest red flags of any crypto scam is when the creators themselves are the first ones running for the exit after briefly pumping the price,” Ophi cautioned.

“It’s a predatory cycle as old as snake oil – use hype to arouse investor FOMO, cash out huge while replacing fundamentals with empty promises, then leave the buyers holding a worthless asset.”

Beyond the financial damage to those who bought in, the Cryptopreacher expressed grave concerns about the potential reputational fallout that Davido’s actions could have on Nigeria’s crypto landscape. With the nation angling to become a continental leader in blockchain innovation, high-profile debacles like this could sow further distrust and regulatory hurdles.

“If it’s discovered that U.S. investors were impacted by this blatant attempt to issue unregistered securities, you can be certain the SEC’s crosshairs will be zeroing in on Davido,” Ophi warned. “And any resulting crackdown will create huge stress for the many legitimate businesses and startups operating in good faith across our crypto markets.”

He also criticized the Nigerian Securities and Exchange Commission directly for failing to proactively protect citizens from such schemes, urging the regulator to establish clear policies and licensing for cryptocurrency projects looking to solicit investment from the public.

Rather than pursuing ill-conceived meme coins that Ophi derides as essentially ponzi schemes, the crypto educator implored Davido to realign his ambitions and leverage his stardom in more sustainable blockchain verticals like NFTs.

This, Ophi argues, could drive real utility and value creation instead of inflicting widespread financial harm on legions of poorly-educated retail investors.

“With 15 million followers, many of whom have zero understanding of crypto basics, Davido’s actions are poised to result in very real, widespread financial damage,” stated Ophi solemnly.

“He should be partnering with the SEC and our crypto community to focus on developing legitimate NFT products and services that contribute positively to this industry’s growth rather than detract from it.”

Yes, there was confusion over who issued the directive. Some reports claimed it came from the Office of the National Security Adviser [ONSA], others said the Central Bank of Nigeria [CBN], issued the directive.

However, the CBN Act of 2007 of the Federal Republic of Nigeria charges the apex Bank with the overall control and administration of the monetary and financial sector policies of the Federal Government. So, there is no smoke without fire.

Another confusion: What prompted the ‘order’? Yet, some sections of the media reported that the FinTechs were affected in the ongoing clamp down on ‘cryptocurrency economy of Nigeria’ that has even negatively impacted the nation’s currency – the naira.

On the other hands, words from the grapevine connected that the order for these FinTechs to temporarily halt their customer onboarding processes was linked to an ongoing audit of their Know-Your-Customer [KYC] in line with the ONSA’s scrutiny in recent months, over concerns around money laundering and terrorism financing in the country.

Heads of FinTech companies and [in banks] were summoned to Abuja to discuss issues around KYC.

Although, the CBN is yet publicly commented on the directive to the fintech firms, sources from three major FinTechs, who requested not to be mentioned as they were not permitted to speak, confirmed they have halted new account creation on their platform.

However, the source denied the directive of having anything to do with KYC.

“It’s just a regulation from the CBN, and we’ve complied. The real question is, why are FinTechs companies always targeted,” the source argued. “It has nothing to do with KYC; I am aware that the CBN communicated, but this particular issue dwells on accounts related to cryptocurrency transactions.”

The source argued that FinTechs have played significant roles in deepening financial inclusion in the country.

“We have deployed robust and reliable digital payment infrastructure that has facilitated an average monthly transaction value of $12bn for about 1.6 million businesses, just last year”, the source told our correspondent.

Also, a source at PalmPay, confirmed there was a CBN directive to FinTechs to reassess their KYC processes. This is causing a temporary pause in onboarding new customers.

She clarified that the KYC review, was a collaborative effort with the CBN, and FinTechs were awaiting further instructions without a specified timeline for resolution.

Another source at OPay, who also declined to be named, said they were following the CBN’s directive and could not comment further. “We don’t really have anything to say. It’s just a directive that we are following. The CBN has issued their directive. FinTech companies have faced increased regulatory scrutiny over their account opening processes.

The market for digital payments is huge as it includes digital trade transactions, mobile point-of-sale payments, and digital transfers.

Digital investments in the FinTech space include robo-advisors and neobrokers while digital capital raising such as crowdfunding, crowd investing, crowd lending, and marketplace lending, have been deployed to increase financial inclusion in the country.

The market for digital assets like cryptocurrencies, NFTs, and DeFi, and the neobanking segment are part of the focus areas in the digital banking space.

Nigeria plays host to a strong and growing FinTech ecosystem, a feat largely driven by an increasing smartphone penetration, and a massive unbanked population.

It is also the leader in Africa FinTech startups and mainstream banks, providing innovative digital solutions and offerings ranging from banking services, alternative lending and digital credit, public revenue collection, electronic payments, investments and financial management, blockchain, digital currency, crowdfunding and alternative financing, to foreign exchange, remittance transactions among others.

However, the EFinA Access to Finance (A2F) survey report, indicated that formal financial inclusion in Nigeria, has grown significantly from 56% in 2022 to 64% in 2023.

The 2023 results show that 26% of Nigerian are financially excluded, down from 32% in 2020, demonstrating clear progress towards the Nigeria Financial Inclusion.

It must be noted that fundamentally, achieving the financial inclusion quest of Nigeria cannot be possible without the FinTechs. Ask the ordinary man in the street of his experience during the naira scarcity saga.

Reacting, Uju Ogubunka, the president of the Bank Customers Association of Nigeria, backed the CBN’s move to suspend new account opening on the affected platforms.

“Anything that can disrupt the system should not be permitted. If the platforms are being used for things that are against the regulations, I think the CBN decision is ok. I don’t see anything wrong with that. It behoves on the companies now to get their KYC right.

“Let them do what they are supposed to do. KYC applies to banks and other financial institutions that deposit money. It should also apply to them so that the regulators can understand what is going on and hold them accountable.”

Meanwhile, the main regulatory bodies of the FinTech sector in Nigeria include the CBN, the Nigerian Deposit Insurance Corporation (“NDIC”), the SEC, the Nigerian Communications Commission (“NCC”), the National Information Technology Agency (“NITDA”).

Others are; the National Insurance Commission (“NAICOM”), the Federal Competition and Consumer Protection Commission (“FCCPC”), the Corporate Affairs Commission (“CAC”), the Federal Inland Revenue Service (“FIRS”), the Nigeria Data Protection Commission (“NDPC”) and the National Office for Technology Acquisition and Promotion (“NOTAP”).

Yet, they the FinTech are not over-regulated?

Well, the extent of each regulator{s}’ supervisions will mostly depend on the transactions or services which the FinTech company is engaging in.

With the new order, the target may be affected, as the company processes about 100 new accounts every day.

It is thus, yet unclear, with the recent move of the apex bank, if its ambitious target to increase overall financial inclusion to 95 per cent of the adult population by 2024 will be achieved.

Time will tell.

The Lagos-based Web3 startup specializes in next-level smart security infrastructure and key management systems.

Developed within the Hyperspace Technologies Limited’ research and development (R&D) division, “cipherCHIP tap2verify” system presents a novel approach to product authentication by integrating Near Field Communication (NFC) tags, Non-Fungible Tokens (NFTs), and blockchain technology.

Dr. Oluseyi Akindeinde, the lead inventor of the MFA that is poised to enhance a security system that requires more than one method of authentication from independent categories of credentials to verify the user’s identity.

Hyperspace Technologies Limited had in August this year secured patent for cipherKEY tap2sign MFA (Multi-Factor Authentication), a next-generation security system designed to leverage the decentralized nature of blockchain, the robustness of public/ private key cryptography, and the convenience of NFC (Near Field Communication) technology to provide an unprecedented level of security against identity theft, phishing, and social engineering attacks.

Meanwhile, the cipherCHIP tap2verify’s patent certificate from the Industrial Property Office Registry, Commercial Law Department, Federal Ministry of Trade and Investment, was granted on December 14, 2023 and signed by Stella Ozo Ezenduka, the Chief Registrar on behalf of President Bola Tinubu.

On the other hand, the Trademark for cipherCHIP tap2verify was granted on October 20, 2023 under the Class of Scientific, nautical, surveying, electric, photographic, cinematographic optical, weighing, measuring, signaling, checking (Supervision), life-saving and teaching apparatus and instruments; apparatus for recording transmission in reproduction of sound or images; magnetic data carriers recording disc; automatic vending machines and mechanism for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; free-extinguishing apparatus.

It will be published in the trademark journal.

Commenting on the journey to securing the patent and trademark, the intricate workings of cipherCHIP tap2verify, Dr. Akindeinde highlighted its potential to revolutionize product provenance and authentication.

“In an era where counterfeiting has become increasingly sophisticated, ensuring product authenticity is paramount. cipherCHIP tap2verify addresses this challenge by combining the unique identification capabilities of NFC tags with the immutable nature of blockchain technology, further enhanced by the uniqueness of NFTs”.

He added that cipherCHIP tap2verify offers a groundbreaking solution to product authentication challenges.

By seamlessly integrating NFC tags, NFTs, and blockchain, it provides an unbreakable chain of trust from manufacturers to consumers.

• NFTs: Once disruptive in the tech world, captivated global attention by promising to revolutionise digital art, ownership, and authenticity.
• Lessons from NFTs decline: Explore the factors that contributed to the decline of NFTs, revealing valuable insights for the future of AI. 
• Drawing parallels: We delve into the parallels between NFTs and AI, questioning whether AI is destined to follow a similar trajectory.
• Future implications: Discover the lessons we’ve learned from NFTs’ journey, and how we can navigate the AI landscape differently. 

In 2021, NFTs were all we could talk about. Whether that be with optimism or skepticism. They were disruptive and intriguing, a phenomena we couldn’t quite wrap our heads around.

And as time went on and the waters turned less murky, we gradually began meddling into the world of cryptographics.

If you still don’t know – what is an NFT? 

An NFT (Non Fungible Token) is a token that is a unique digital identifier which is integrated on the blockchain. Much like their crypto counterparts, NFTs are bought and sold online. They promised to revolutionise the world of digital art, ownership, and authenticity. 

NFTs come in many forms, including trading cards, virtual worlds, domain names, music, and art pieces. In 2022 they became the focus of our attention, taking over the art world and making new millionaires and “richest living artists” overnight. 

With NFTs topping our headlines for the most part of 2021 and 2022, many were sure they’d lead the forefront of our digital world. Over time, this has proven not to be the case. 

When domain and hosting providers Fasthosts released their State Of The Web Report, which examined the rise and fall of the .nft domain trend, it led us to question if NFTs are just another fad. Are they another one of those “here today and gone tomorrow”s? Are the circulating trends of 2023 such as AI going to succumb to the same fate? 

The rise of NFTs

In January of 2021, the popularity for the search term “.nft” went up by 138% more than average as it started to dominate the headlines.

Comparatively, the Fasthosts The State of The Web Report reveals that the top-level domain name .nft was the second most popular domain name globally for 10 months out of 12 in 2022, amongst other popular choices such as .eth, .coin, and .crypto. 

Unsurprisingly, in August of that year, the domain name .nfts.com sold for an incredible 15 million dollars, making it one of the largest public domain name deals ever. 

At that time, the global NFT market was valued at $11.3 billion, encompassing a variety of collections such as art, metaverse tokens, and gaming collectibles, among others. We saw artists flock to the new medium, attracted by the potential to sell their digital art directly to their buyers.

Different social media platforms and businesses started to embrace them, large brands, and sports figures such as Christiano Ronaldo signed deals, and we even saw Donald Trump expand his NFT collection. But with so much prospect, by November 2022 the paradigm shifted. NFTs flatlined, and the buzz died down. 

Falls and fails 

According to the NonFungible Report, the 3rd quarter of 2022 saw a 77% fall in traded dollars, and a net quarterly loss of $450 million was recorded for the first time ever.

What happened? 

As NFTs gained traction, they also gained criticism, which led to a drop in their demand. There were a few factors at play here, such as their environmental impact on the blockchain, low-quality content, pricing, and the circulation of scams.

People started to question the true value of digital assets. As the crash commenced, bad press took over – Mark Zuckerberg said NFTs were done with, a Frida Kahlo drawing was destroyed to make NFTs, companies pushed back, and the British government dropped plans to mint them. 

The crash was described as a “crypto winter”, but like each winter, spring is never too late to follow.  

They haven’t died – just evolved 

In 2023, NFTs are still showing signs of life. Although they have received criticism, a few lessons were learned. Large sales continue to take place, and the future of NFTs looks bright despite the downturn. Creators realised the importance of value in their content, platforms and marketplaces started to implement stricter regulations, and buyers learnt to exercise caution before investing. 

High value businesses are still turning to NFTs, such as the Premier League in early 2023, alongside big brands like Louis Vuitton, Sony, and McDonalds. NFTs are also expanding into other ventures such as financial loans where tokens can be used as collateral. For example, Air travel providers Flybondi recently partnered with TravelX to start offering bought tickets as NFTs. 

The future of NFTs and new trends? 

Looking at the journey of what once was described as a‘revolution in technology’, how can we apply what we know now to future developments? In a world full of micro trends, can we ever be really sure about what will come, what will go, and what will stay? 

One topic we can’t get enough of in 2023 is AI (artificial intelligence). Similar to NFTs in 2021, AI is dominating our headlines and thoughts. Although it’s been around for longer than its predecessor, its recognition has been growing exponentially, and is being adopted across various industries. 

But with trends such as Zuckerberg’s Metaverse losing traction the same way as NFTs did, is AI headed down the same road? 

In the same way NFTs are not dead, when the AI hype gets under control, it will continue to operate in the background. For that matter, AI has been in our lives long before we became aware, or more so obsessed with it. Think Youtube and Netflix video recommendations, predictive text in our emails or phones, and smart home devices. The only thing that has changed between then and now is the hype, and how it continues to dominate our headlines. And much like NFTs, AI might see market share price drops, revenue loss, and negative press; however, like everything, it will continue to exist no matter where we shift our attention to. 

What we can take from this is that the decline of NFTs didn’t signify their demise, it actually instigated a time of recalibration and maturation for the industry. In the same way, it is crucial to approach AI with a similar balanced perspective. As AI continues to find its place in our world, it is our human response which will mitigate its market dynamics and challenges.

The new “Genesis” NFT Collection from the company will include 3D and animated depictions of the legendary athletes who have appeared on Sports Illustrated covers throughout the years.

According to eBay, its first-ever collaboration in the NFT field is the result of the boom in the collectibles industry.

Hockey superstar Wayne Gretzky from Canada will be featured in the first NFT collection, which goes on sale today. There are 13 limited-edition digital collectibles in the collection, available as green, gold, platinum, and diamond-tier NFTs.

The NFTs, which start at $10, features an animation or 3D representation of Gretzky performing one of his trademark moves on the ice. eBay plans to drop additional collections featuring more athletes throughout the year.

“Through our partnership with OneOf, eBay is now making coveted NFTs more accessible to a new generation of collectors everywhere,” said Dawn Block, the vice president of collectibles, electronics, and home at eBay, in a statement. “This builds upon our commitment to deliver high-passion, high-value items to the eBay community of buyers and sellers.”

Today’s launch isn’t exactly a surprise, as eBay revealed last year that it was going to embrace NFTs and add new capabilities that bring blockchain-driven collectibles to its platform.

eBay has a significant presence in online shopping, but the company will have its work cut out for it competing with dozens of crypto-native NFT marketplaces already out there.

eBay now joins a growing number of companies looking to incorporate NFTs into their platforms. Instagram recently announced that it will start testing NFTs with select creators in the United States. In addition, Spotify confirmed last week that it’s testing a new feature that allows artists to promote their NFTs on their profiles.

However, as popular as it has become, there is still uncertainty as to what it is, what the purpose is, what value it holds and why there’s such a surge of NFT art.

As a type of smart contract, an NFT has qualities that make it particularly useful for the storing of ownership information of assets, albeit digital or physical. More or less, what it means is that this NFT can act as an ownership certificate for the said asset, but only that specific asset. And through blockchain technology, the ownership of this can be immutably verified.

An NFT is also completely unique, hence the naming Non-Fungible Token, there can only be one of each. This is opposed to fungible tokens, which means that all the tokens that exist are exactly the same and can be traded typically for the same value. An example of this would be Ethereum or Bitcoin.

Another non-blockchain example of something fungible is the South African Rand. The R100 in my wallet is exactly the same value as the R100 in another and I would have no problem swapping the two notes as the value remains the same.

Now when it comes to Non-fungible items, I might not be that keen on a similar swap. A non-digital example of something non-fungible is a painting by world-renowned artist, Portchie. A piece of artwork created by Portchie that I own might be rarer and hence more expensive than another and as such, I would be reluctant to trade it one for one. I could however be keen to sell my non-fungible painting for something fungible (like Rands). 

Not only does the physical world have a use for fungible and non-fungible stores of value, but it is also essential for commerce.

Think about title deeds of properties or car registration papers or tickets to events, they are all non-fungible. It would be hard for the world to function without non-fungible records. Now imagine we could have these immutable records or elements in a digital world. And hence the birth and excitement around NFT by those that understand the long-term, real-world benefit, that this will bring about.

When trading non-fungible items in the real world, one of the biggest problems has always been the transaction between two non-trusting parties. To help facilitate these transactions, lawyers are typically introduced, sometimes on both sides of the transaction, to facilitate the transfer of the non-fungible element in exchange for the fungible item (money in most cases) via escrow and trusted parties (lawyers typically).

Whilst this process has become somewhat efficient for certain types of transactions, the cost involving a lawyer (or other trusted party) has always been prohibitive.

This is where the power of NFTs, fungible tokens (such as stable coins) together with smart contracts and blockchain technology, opens up the door for inexpensive and efficient transfers of non-fungible tokens. Now if we let these tokens (or smart contracts) represent ownership of a real-world item, such as art or property, and suddenly you open up the capability to trade with unknown parties in a safe and secure way, without the need to involve trusted parties.

Whilst NFTs have been around for some time, we are yet to see more real-world applications. Stellenbosch-headquartered, Fanfire has built some innovative solutions, piloting the tokenisation of wine.

By buying an NFT that proves ownership of a bottle of wine, the purchaser buys the right to redeem the wine at a designated storage facility. That means that for some time, the wine will remain at the perfect temperature, in a wine cellar and once the owner is ready to consume the bottle, he/she can claim the bottle by exchanging the NFT for the physical bottle. Should the owner of this NFT no longer want the wine, they can sell this NFT on a marketplace which will give the new owner the right to claim the bottle. And given that premium wine prices increase between 9-11% per annum, this is a very interesting alternative investment class that is now accessible to a wider audience and in an environment where it’s easier to create liquidity for the asset through online marketplaces.

But isn’t an NFT a picture on the internet?

An NFT is simply a type of smart contract (typically ERC-721 or ERC-1155 token standard) that in its simplest form, assigns ownership to a specific wallet and has metadata (additional information that is stored on the blockchain). Most of the better known NFT project’s smart contracts point to an image file in IPFS (InterPlanetary File System) or in some cases such as with CryptoPunks, the image is stored on-chain (in the metadata) hence the reason for the low quality of those images. What’s more, each image is then typically used by its owner as a profile pic (PFP) in many of their online engagements with others. This serves as a form of viral marketing for the project. If you see someone you respect on Twitter flashing a picture of a specific NFT project, you might want to join that project as well. And whilst this might sound strange, it’s not a new concept. Brands have been doing this for years: Tiger Woods wears Nike while playing resulting in golfers around the world who love him to do the same.

Now whilst the image is but one part of the NFT primarily used for marketing, many early creators understood that NFTs can function well as membership cards to digital communities. Bored Ape Yacht Club (BAYC) is a great example of this. The project generated 10 000 unique apes that give owners access to a community of bustling creatives, artists and builders. All working together to create more value for their owners. Owning one of these NFTs has become the online world equivalent of owning and wearing a Rolex.

Trying to replicate the success of BAYC, thousands of other projects popped up overnight, most of which launched at prices and eventually lost close to all of their value. This misunderstanding of what NFTs are and what it is one is buying has led to a lot of people losing substantial amounts of money. But as with any new industry, the dust will settle and then the real utility will come to the fore.

What about NFT art?

Another interesting use case for NFTs is NFT art. NFT art is simply a digital creation that can be owned. The most common question to this statement is “Can’t I just save the image to my device?”. Well, you can, and you can also make a print of the Mona Lisa in your house, it might look pretty, but it isn’t the real thing, and it doesn’t make you the owner. And that’s the point of digital NFT art. We are moving to a world that is becoming more and more online and digital art and collectables are going to play a role in it.

With Facebook’s pivot towards the Metaverse, even renaming their company to Meta in the process, it is foreseen that digital collectables will be one of the backbones on which the Metaverse will be built. Think about the clothes you wear, the paintings in your house, etc. In a digital world, these will all be digital collectables.

Now for artists, musicians, and digital creators alike, the utilisation of NFTs means that it eliminates the middleman that usually comes in the form of curators, record labels, galleries, and art dealers who decide what artists and their work are worth.

Technically, anyone can create an NFT. Artists, gamers, brands, and musicians all have an opportunity to create NFTs and offer them for sale ensuring that a larger part of the revenue share ends up with the creator. It is opening up an entirely new economy!

Moreover, due to the smart contracts on Ethereum being turing complete (meaning it can run complex computational logic on the contract itself), it opens up an array of creative revenue sharing and fund distribution mechanisms. One of which is royalties — a percentage of every sale of their art — the smart contract can have coded into it, a requirement to pay a fee every time an NFT is transferred from wallet to wallet. The smart contract automatically collects this fee and sends it off to the creator’s wallet.

Over and above these new mechanisms to trade enabled by blockchain technology, NFT art also offers artists the capability to create within a new medium of art, never before possible. Like South African artist, Portchie, who recently launched a collection of generative canvas art through NFTs called ‘Cycling by the Riverside.’ Portchie is well-known in the art community and has created a reputable name and has sold more than 18,000 original artworks. In his first NFT project, Portchie hand-painted several individual elements that were made available to an algorithm to choose from by means of weighted random selection, to create a unique scene for each person minting. This gives the collection the option to literally create trillions of unique NFTs each featuring different cyclists, chickens, trees and flowers or a unique combination of them. For his first NFT collection, Portchie created 1000 such NFTs, giving each owner a unique scene. What’s more, to add to utility, each “minter” (that is someone who participated in the launch) will receive a complimentary print of his/her purchased art.

A word of caution

As the popularity of NFTs soars, like anything else, it also brings opportunities for fraudsters and scammers alike. For the most part, victims fall prey when they are clueless or lack adequate knowledge.

To avoid this, it’s important to first get a thorough understanding of NFTs. Once you have sufficient knowledge of the ins and outs, it is then imperative for buyers to determine reputable marketplaces to buy from. Some of the more popular marketplaces include OpenSea, LooksRare, SuperRare and Rarible.

Among other factors, buyers should look at the number of transactions, community size, whether the publisher is authentic, the floor price, and aspirational value. It is also necessary to conduct due diligence on the creators, theme, or market potential, with a high return possibility in mind.

Creators who are open about their identity are known as “doxxed” and this is normally a positive sign, whereas identities that are concealed or use pseudonyms carry with them a certain level of risk.

Once you own a piece of NFT art, how do you enjoy it?

As this is a digital asset, you cannot touch it, but there are several ways to enjoy the art you have just purchased. If the image is of high resolution, such as Portchie’s, an old-school way of enjoying it would be to have it printed. More currently, you would find all major screen manufacturers are either working on or have released mechanisms to display NFT art and as such one can use a digital screen to display art. Instagram and Facebook have both launched features to post original NFT art with a special marker highlighting the authenticity of a piece of art.

And the most exciting way to enjoy it in the metaverse is by viewing it in virtual galleries in the many virtual lands like Decentraland and South Africa’s very own Africarare.

Future opportunities

The world of crypto art is growing tenfold ⁵ and whilst the current bear market conditions have seen trading activity decrease substantially, it does provide not only new opportunities for both artists and collectors but fresh ways to think about producing, purchasing, and auctioning art.

NFT art hit mainstream news over the last year, with several high-profile sales garnering millions of dollars. For example, in 2021, Everydays: The First 5000 Days was sold for $69.3 million.⁶

According to research from Finder.com, 8.3%⁷ of South African internet users currently own an NFT and this is set to double sooner than expected by bringing the traditional art world to the NFT space.

About Renier Kriel

After spending 12 years as an entrepreneur, Renier Kriel is currently a strategy consultant. His passion for what new technology can accomplish lead him to start the smartphone app development agency in South Africa back in 2009. Here he played a key role in building the first mobile apps of Checkers, Takealot and MTN and many more. Having seen the rise, adoption and impact smartphones had on the world, Renier is passionate about new emerging technologies (such as blockchain) and the opportunities it can bring about and consults  for startups, scale ups and medium sized, tech enabled or empowered businesses.

We at Patricia believe that a critical utility of Blockchain lies in its ability to solve inherent, Africa-specific problems to democratize the financial landscape. As a company, we have tackled some of those problems for 900,000 Users and Merchants. In doing so, we have contributed to financial inclusivity, job creation, the development of a talent-based economy, and the creation of new wealth amongst young Africans.

Being different makes you stand out, and taking the path less traveled is crucial to greatness and impact, a trait the typical African youth possesses. I write this memo, ‘The state of Blockchain in Africa, that I might pay forward some of the knowledge I have garnered with other brilliant, disruptive, “typical” young Africans, who also might want to do the most.

African problems, particularly problems in African finance, require ingenious solutions for real change. In most instances, change in the ecosystem often requires large degrees of disruption; the more disruptive you are, the more reward there appears to be. For substantial advancement to be made on the continent, we must drive innovative and disruptive solutions that allow for leap-frogging and transformation. It is this transformative power that blockchain technology possesses. We have seen some level of this disruption in the eastern African finance ecosystem with notable successes around MPESA (mobile money).

Aside from transparency and accountability, the Blockchain can provide high levels of financial inclusion and accessibility that is not currently available on the continent and could be applied in other systems. In a few weeks, I will turn 27 years old.

Over the past 27 years, most African nations have suffered from high inflation rates, corruption, poverty, resource misappropriation, unemployment, and many more afflictions that rob citizens of wealth and purchasing power. Currently, the Sustainable Development Goals for 2030 goals seem unrealizable due to the constant depletion of infrastructure and human development on the continent.

Super high inflation rates across Africa have historically been much higher than the global average. Extreme examples such as Zimbabwe’s hyperinflation.

Currently, the Nigerian Naira is taking a beating, mirroring the effects of inflation. So many African countries suffer from depreciating and volatile national currencies; currencies such as the Nigerian naira (NGN), Egyptian pound (EGP), Algerian dinar (DZD), Ethiopian birr (ETB), and Ghanaian cedi (GHS) have seen similar situations. Bitcoin and other cryptocurrencies with limited supplies, disinflationary monetary models, and decentralized governance offer protection against such downturns.

Blockchain is so unique that it combines the wealth preservation properties of hard assets, such as gold and land, with the portability of a digital currency.

Take all of that and mash it up with the doggedness, strong will, and tenacity of Africans; you get the start of the African Financial Revolution. If there is an innovation that can save and unite Africa, I predict it is Blockchain technology.

If I were to describe the entire Blockchain space in Africa, I would describe the space as YOUNG and DISRUPTIVE.

What is Web3?

Web3: Web 3, simply put, is the third generation of the evolution of web technologies, similar to how we have new iPhone models every year. Web3 is the most recent version of the internet.

Before we delve into web 3, we have to touch base on its predecessor, Web1 and web2.

Web1: This is the earliest version of the internet; it is read-only for the web; it mostly offered users the ability to read and research, with hardly any way to interact with what they were reading. Think of it like reading a printed magazine; you can only read it.

Web2: This defines the current state of the internet, Where users can read and also write. The critical difference is writing. Here you can interact with the internet, user-generated content (uploading a video on youtube), Making an order online(Purchasing from Jumia). Web 2 provides users to create content as opposed to just viewing it.

Web3: Read, Write and Own. Ownership is one of the key differentiators between the web2 and the web3, where users would have ownership over Personal Data, money, and virtual assets. In this world, NFTs will give true ownership of digital assets online; wallets will replace bank accounts. In a nutshell, decentralization begins here.

The State of Crypto: Analyzing the landscape

Peer-to-Peer: Africa accounts for a much larger share of the P2P trading market globally. In 2021, we saw a massive spike in P2P when the Nigerian Government banned Crypto in Nigeria and sent us all a love letter on the 5th of February 2021. P2P had blown up since then and has not locked back. Informal P2P trading is huge in Nigeria.

Trades on WhatsApp and Telegram are the order of the day. I have seen young people and Business owners in these groups carry out transactions for several millions of dollars within their small circles.

As of April 2022, cryptocurrency exchange Kucoin reported that 33.4 million Nigerians trade or own crypto assets despite restrictions on cryptocurrency transactions by the CBN, using peer-to-peer networks. While Binance is the undisputed leader in P2P in Africa, Paxful, Localbitcoins and Remitano are doing pretty well in this space. Whoever thought of the escrow system, we owe you one.

Political Instability: The instability of national politics and unstable government systems has also been a challenge confronting the progression of the continent. Political instability directly impacts inflation and currency volatility and has far more significant effects, such as forced migration, GDP collapse, and wealth confiscation. Wealth confiscation has been particularly thriving in African Nations.

Blockchain can help mitigate or reduce the level of these challenges by offering transparency in government processes through the open system it offers. We can have transparency in voting processes, validation of records and government data, and accountability back in the system. This will increase the confidence of the citizens and foster peace and development.

Unbanked Citizens: Aside from economic and political instability, traditional financial services underserved most of Africa, having a high number of unbanked indigenes.

The number of commercial banks per 100,000 adults is 61% lower across Sub-Saharan Africa than the global average. As of 2018, 66% of those living in Sub-Saharan Africa have no access to a traditional bank account.

Although, I do not believe Blockchain would Bank the unbanked immediately, as I believe that will be many years of transition from banking the lady who sells groceries in the Kazi (South African term for corner store).

However, if any technology stands a chance, a handshake between Blockchain and traditional finance stands a chance. As a critical innovation, crypto wallets can serve as safe storage for assets and are more secure and accessible than a traditional bank account to re-bank the banked.

Remittances and cross-border payments: The cost of cross-border payment and the lack of infrastructure to facilitate it is both a financial worry and an economic problem.

Currently, remittances below $200 to Sub-Saharan countries cost an average of about 9% compared to the global average of 6.8%, while payments between countries are even more expensive. For example, according to the World Bank, sending money from South Africa to Zambia costs 18%.

These overburdensome costs are due to a combination of inefficient policies from the central banks, an uncompetitive banking market, and a reliance on legacy financial communications systems such as SWIFT.

Cryptocurrencies are a possible solution to these problems, especially the solutions that prioritize lower fee payments, one of the reasons why the Tron Blockchain is used mainly in Africa. Regardless of the high costs, remittances are hugely important in Africa and key to state revenue. Unlike other regions, most African countries have leapfrogged traditional finance entirely, going straight to mobile banking and now Neo-banking. This trend is also ideally suited to cryptocurrency adoption, which is suited to mobile devices. Mobile payment is already significant. Yet cross-border payment is still a huge pain point; for a few, Cryptocurrencies are the answer, and stablecoins are the choice tokens.

Stable Coins: Stablecoins are cryptocurrency stabilizers and, definitely Africa’s favorite tokens, are Loved by Crypto bros and Crypto traders. From hedging against Ravaging inflation rates, Cross border payments stablecoins are the type of crypto asset that aims to provide stability for users.

Tether was the first Stablecoin, launched in 2014, and it remains the model for those that have followed it. Tether remains the most popular type of Stablecoin, with Tron being the most popular Blockchain for Stablecoins.

From the Chinese community using Stablecoins for Arbitrage, The Foreign Exchange Traders using Stablecoins as an alternate source for US dollar, and Africans who struggle to send or receive money across national borders; Stablecoin has had an enormous impact on the African space.

Mining: Mining activity in Africa is almost non-existent; I do not see that increasing, especially now that most Crypto protocols are moving away from Proof of work protocol which directly impacts electricity usage, the climate, and high gas fees are becoming more of an issue than ever before. Now we see the Proof of state slowly becoming the most preferred protocol, as we see with the Ethereum blockchain successfully migrating over.

Funding: The Blockchain industry in Africa is not slowing down; mega crypto deals rock the continent. Metaverse Magna (MVM), a blockchain gaming platform, has raised a $3.2 million seed sale token round, and Mara, a pan-African crypto exchange platform, raised $23 million. In contrast, Jambo, a Congo-based startup, raised $30 million; most recently, Yellow Card raised $40 million. Despite the continued investment in the crypto ecosystem in Africa, the continent accounted for just 0.5% of total global blockchain funding, offering plenty more upside to potential investors.

Although Africa’s blockchain and cryptocurrency funding numbers are still small compared to other regions, they are doing the most and are not slowing down.

NFTS: Non-fungible tokens, aka NFTs, are digital currencies that can be traded and transferred just like real currency. They are bought, sold, and transferred from one person to the other, and ownership of these items, such as art, music, and real estate, can be transferred securely and recorded on the Blockchain.

The Degen craze was not as active in Africa as in other parts of the world. However, we did have our fair share of celebrities jumping on the craze; Nigeria’s foremost Music executive Don Jazzy jumped on the Bored app and was an evangelist for NFTs.

A few notable collections have come out of Africa, with Owo Anietie — a Nigerian digital Afrofuturism artist rising to fame with his work Afrodriods.

Afrodroids had 12,117 digital collectibles that got sold out quickly to 3500+ holders. What is most interesting about this project is that 20% of all profits went to charity, and he built a free art and dance academy in Ikorodu, Lagos, Nigeria. Talk about Impact.

Unfortunately, The Market has since plummeted alongside the cryptocurrency market capitalization, following the worldwide trend. According to data from Dune Analytics, NFTs and collectibles recorded on blockchains — have tumbled 97% from a record high in January this year.

Open Sea remains the most popular spot to trade NFTs in Africa.

Government Exploration of Cryptocurrencies: Recently, the Government has made efforts to understand the cryptocurrency and, predominantly, the blockchain sector to develop projects that are part of the digital economy. However, these efforts have not yielded desired results yet; because the Government, instead of supporting existing frameworks, has decided to go on a sole voyage and has not been practical in approach.

For instance, CBDCs were built to the specifications and ideas of the Government and not to suit their users’ use case and pain points. In a nutshell, it does not give value to its users, so it is not counter-productive.

The launch of the E-Naira raised hopes and anticipation of a digital currency for all, but due to mismanagement and no practical roadmap, the adoption and use of the E-Naira are non-existent. Recently, I saw the Nigerian Government via the Central bank hosting a hackathon themed “Got what it takes to move the eNaira forward.” While that is a sound initiative, It could have been avoided altogether; real sustainability can only occur if there is a handshake between the private sector and the government part starters

The Government must understand that they cannot shut down the stable door after the horse has bolted.

Blockchain is the future, and any effort to ban them or even excessively intervene in its operations; would be futile. Moreover, restricting cryptocurrencies at the moment, when they are facilitating innovations and brimming with potential, would undermine the financing of critical sectors. Blockchain will play a critical role if Africa is to meet its Sustainable Development Goals by 2023.

While decentralized finance and blockchain technology is scalable and operationalized in other countries and regions, African policymakers have struggled to reconcile cryptocurrencies with their existing monetary system. Many countries in Africa have overlooked this financial innovation, and some even went as far as criminalizing it.

Competition: The future is moving very quickly in the blockchain community in Africa. Locally owned exchanges like Patricia, Buycoins, Quidax, and Tradfada are growing fast. Internationally owned exchanges Yellowcard, Binance, and Paxful, have a solid presence in the space. Blockchain technologies are proving to be effective for a multitude of uses. Hence competition is getting a lot stiffer. The Battle for supremacy in the African market is for the deep-pocketed and, simultaneously, for the brave. The international community flooding into Africa does not make it a more accessible landscape for local players to compete in.

However, this dexterity of the local players in the space exhibit may tip the curve. Patricia, Quidax, and Tradefada are examples of locally owned exchanges redefining the face of Crypto in Africa. The race will get tougher; rumors of 9-digit deals linked to Global Crypto exchange flocks around town. I believe as adoption gets deeper, so will competition too.

My Vision

I have a dream ‘In Martin Luther King’s voice’.

I have a dream where Africa becomes the HQ for Blockchain globally, where we OWN and dominate the industry, and we rule with no fear. I believe this is possible because we are already doing so with little or no infrastructure and government regulation. Nigeria is the fourth country with the most use for crypto today, with 22million users.

Africans can do this, but first, we must choose to do that; as you know, flowers never pick themselves. We need to take this seriously; I mean Government and privately owned firms here. I put the Government first because most of the issues we face are real policy issues; many startups are only in Business because their solutions are walking around inefficient government policies.

The Government has to choose to tackle infrastructure. We cannot flourish when we still have to deal with the infrastructural deficit; I dream of an Africa where Internet connectivity, the High cost of internet Data, and electricity are not at the forefront of challenges. I envision innovation hubs and free trade zones carved out to address technology.

I have a Vision where Africa does not depend on fossil fuels or resources from the ground. However, we depend on the intellectual prowess of Africans and tenacity to conceive an idea and execute it to the highest possible standards.

I wrote this memo and intentionally did not turn it into a sales pitch for Patricia. Why? Because I want to focus on increasing the share size of the African Pie, as opposed to who has the largest piece of pie. Africa is jam-packed with some of the world’s biggest things, the largest desert in the world, the Sahara Desert, The longest river in the world, the Nile River, and many more. Africa can be known as the continent with the largest number of blockchain Unicorns in the world. This is the Africa I want to help create and be a part of.

The future is changing, and so are we. It will not happen overnight, but Blockchain will unlock new opportunities for African communities in Africa and globally over time.
I have a vision for Africa, where we create the products and not buy the products.

PREDICTIONS

I think we are in the middle of the fifth revolution; when the fourth revolution was underway, it faced similar criticism Blockchain, and crypto currently faces today. Companies like Paypal and Amazon were seen as facades, but they ruled the world many years later. Today almost everything has changed except money.

As Elon musk and Jeff Bezos race to conquer outer space, it becomes more evident to me where we are going. I believe at some point, humans will become a multi-planetary species. When that time comes, what would we spend on Mars, South African Rands, Dollars, Chinese Yuan, Euro, or Naira? I do not think so; I believe we would go digital. We would spend crypto. These are a few predictions I foresee happening within Africa and the entire Blockchain space within the next years and decades.

Ethereum to become a Market leader: Judging by Ethereum moving to the Proof of Stake Consensus Mechanism, the Ethereum network has addressed a lot of the bias’s on Green energy, also based on the utility that Ethereum provides, I predict Ethereum to become a market leader and surpass Bitcoin. There is an excess of over 50 million active Ethereum users today, and I do not see it slowing down anytime soon.

Crypto Regulation: I get it; Crypto is volatile, you cannot control it, it can be exploited, etc. My granddad always says you should not throw the baby and the bath water out. Crypto has been struggling for legitimacy in Africa. However, Africa is going to have Crypto regulations. Ultimately, Africa must look to curtail the spread of scams while also developing regulations that promote the fair use of digital assets. It is inevitable; I also foresee more traditional players getting into the space, verticals like Neo banks, payment processors, and switches offering crypto infrastructure.

Stablecoins: While the pros and cons of stablecoins may be debatable, their rise is not. So far, More than $113 billion in coins have already been issued. Stablecoins provide a simple solution for a complex solution; as long as users seek stability, the rise and rise of stablecoins in Africa are almost a given.

The Tron blockchain would continue to scale because of the cheap fees it offers its users. There are over 113,000,000 wallet addresses, and I predict its continual growth.

Crypto Payments: These will rise, especially once favorable regulations begin to fall in place. Right now, Businesses are scared of infringing on their respective Central Bank’s stance on crypto. The advantages of crypto payments outweigh the downsides; no chargebacks or PCI compliance to worry about. Accepting crypto payments gives businesses, whether small or big, access to a global market and reach; in addition, it could attract Business from crypto enthusiasts. I foresee the rise. Patricia has also positioned itself rightly with Patricia Business to lead on this frontier.

Crypto for Content Creators & Content Creation: I predict a massive shift in this space. Why? Numbers. The take rates of web2 giants are extortionate; web3 platforms offer fairer economic terms. Suppose we compare Meta’s nearly 100% take rates across Facebook and Instagram to NFT marketplace OpenSea’s 2.50%. The difference is quite clear. If we delve deeper into Apple store’s 30% fee across the ecosystem, we will begin to see that the web 3 space offers higher value to content creators. Over time they would begin to notice this, which would spur more web 3 projects to emanate. Web3 is tiny but mighty.

FUNDING: What I find most interesting in this ecosystem is that most startups kick off without funding and, surprisingly, move to success. It is such an African thing. Startups like Patricia and Jet pay by Blord group are clear examples of this. The sheer tenacity of Africans to succeed and excel does most of the work.

However, to compete and become dominant, funding is necessary. Funding is a crucial enabler and necessary catalyst for startups to supercharge and experience hyper-growth.

Funding will flow into the African space; daily international investors are seeing the relevance and intrinsic value in the continent.

I also predict more and more acquisitions of local companies as larger and more established international firms would want an inroad to Africa, as was the case with Stripe and Paystack.

Gaming & Gaming Guilds: Gaming has never been more interesting as it has been in recent times. Gaming Guilds are gaming groups, or a community that connects gamers, investors to games and Gamefi projects. Where gamers get scholarships to play games by renting out NFTs with the promise of splitting profits when players earn. Gamers build a community and stay in touch with themselves while playing games. The more important thing is the reward system that the introduction of Blockchain provides to gamers.

Games adapted to the crypto space have allowed gamers to connect directly with other players, stream games, earn and trade in-game items even more transparently. The catch here is to earn. Based on Statista numbers, Africa has over a 650million population 17 years and younger. Gaming guilds will present a massive shift in wealth creation as the African population is young and ready to take on new wealth creation schemes.

With the launch of guilds like African Gaming Guild. Key players are already seeing this opportunity and

Decentralized Finance: Decentralized Exchanges are still very novel to the African community, as only a few persons would even know of Metamask or Uniswap. However, I believe this has the most use case and poses the real opportunity to get loose of the current choke held by traditional finance.

A quick intro to Decentralized exchanges (abbreviated DEXs), Decentralized exchanges are alternative payment systems that do not rely on banks, or brokers, to name a few, but use smart contracts on the Blockchain. DEXs are not huge now, but when they do take off, there will be no stopping them.
Gambling: Blockchain in gambling is another industry shaker and potential game changer. Crypto Casinos, Traditional Betting companies, adopting crypto as a means of on-ramping & off-ramping, anonymity, Dapps, and gambling have existed since the beginning of human history. However, the wave about to come would be unlike anything else.

With Blockchain technology, traditional Betting companies would be able to payout wins and accept payment from anybody in the world with a crypto wallet. New concepts like no-risk betting would emanate; utilizing Defi technology, people can place bets without the fear of losing a dime but still with the upside of a large pot win. The African industry has been slow to accept this primarily because of the regulatory bottlenecks, but this area is up-and-coming, and I see it flourishing.

Metaverse: Virtual lands, NFTs, and Meta, formerly Facebook, are the usual suspects when the Metaverse comes to mind. Africa is still very, very much behind in creating and building this immersive, universal virtual world. The Metaverse would be massive for brands and Marketers, African and international brands; simultaneously, the possibility of reaching over 10 million people at a go is quite juicy.

I envision Metaverse concerts and virtual meetings moving to the Metaverse (watch out, Zoom). I suspect Africa would trail behind in this for a while because of the skill set, technical know-how, and capital needed to build a thriving virtual reality world.

Can Africa enter the Metaverse? Meta predicts that $40billion could be added to Africa’s economy via the Metaverse. If this is true, then best believe Africans would be hopping on this train. I like to think about the Metaverse as a continuous evolution and journey.

Thus, the continent and its people would figure out how we will participate in this evolution. Simply put, the Metaverse will give us a new way of being.

Crypto in real estate: Fractionalized/tokenized ownership. One of the most exciting developments in real estate is the idea that properties can be sold and managed in a blockchain-based marketplace.

Already it is a concept I hear whispers of here and there in the land. This concept can help create more liquidity in property and reduce barriers of entry and ownership by creating digital tokens that represent fractional ownership of real estate assets.

We have seen marketplaces like Canadian-based Liquid collectibles by Logan Paul launched internationally, which is built around this concept.

Cryptocurrency and Blockchain would become more visible players in the real estate sector. It is not only the technology that makes this concept so unique but the concept of giving the regular low/middle-class earner access to an investment they would ordinarily not have ever found an entry point into.

Blockchain in real estate can revolutionize the industry through advanced fast, intuitive, and secure transactions. With smart contracts, consumers can buy or sell real estate quickly and easily through Blockchain.

Crypto inclusions in traditional trading asset classes: There has already been a breakthrough on this front, with the first Bitcoin ETF making its debut on the New York Stock Exchange. The development represents a new and more conventional way to invest in crypto. The Bitcoin ETF allows investors to buy in on cryptocurrency directly from traditional investment brokerages they may already have accounts; this is but the beginning.

Once this concept gets introduced into the African space, I see large conglomerates like GTbank co and investment houses emulating this.

Crypto Pricing & Bull run: My final prediction is this, we would see Bitcoin crossing over the $500,000 threshold in this lifetime.

Bitcoin is a good indicator of the crypto market because it is the largest cryptocurrency by market cap and the rest of the market tends to follow its trends. Hene other cryptocurrencies would follow.

Key Takeaways

Crypto, Blockchain, and web3 are still in their infancy in Africa.

Web3 gives people property rights: the ability to own a piece of the internet. The Fifth revolution, as I like to call it. Read, Write and Own.

Blockchain is growing faster than the internet did. Since the official release of Bitcoin in January 2009, the growth of this technology has been exponential, growing at a much faster rate than the internet did back in the early 80s.

• There is a huge market opportunity at the intersection of web3 and gaming.
• Bitcoin is a good indicator of the crypto market because it is the largest cryptocurrency by market cap and the rest of the market tends to follow its trends.
• A gaming guild (play-to-earn) allows gamers to start playing crypto games without investments. Gamers, or managers, give scholarships to new members, essentially renting out their NFTs for gamers to use in the game.
• Peer to Peer trading is King in Africa.
• Crypto is traceable.

Africa has a young population and is ready to lead Blockchain adoption.

Conclusion

Africa has the potential to become a leading player in the Blockchain by investing in her talent, education, leading crypto and blockchain adoptions, and making tight regulations that have the effect of encouraging people to get into the space.

While no one can predict the future of cryptocurrencies, I know that the novelty requires an equally nontraditional regulatory approach — one as invested in the virtues of experimentation and entrepreneurship as the practices it aspires to oversee.

There is a chance to position Africa as the bedrock of crypto in the world, and this is the future I am banking on.

Stay doing the most of my best as always.

Notes from Fejiro Hanu Agbodje

The ever-innovating BNUG maximises the acceleration of technology to make the world a better place for all, and through its most recent programme, ‘Lagos Blockchain & FutureTech Conference/Exhibition’, the group has come up with ways to impact and support the Nigerian political ecosystem through blockchain technology.

Through the use of Non-Fungible Token (NFT), an aspect of blockchain comprising cryptographic assets with unique identification codes and metadata, BNUG is creating political awareness.

“While the existing metaverse industry has been described as ‘basic and weird’ due to nascent technology and adoption, it’s expected to have a profound impact on gaming, social interaction, education, and arts. The marriage between metaverses and NFTs is inevitable since the metaverse NFTs will power the next growth cycle in digital collectibles on the internet.

We have also seen huge investments by bigtechs like Microsoft, Meta, NVIDIA, HTC, and Apple into VR, AR, and other kinds of XR hardware, pointing to a huge potential in the Virtual worlds. Moreover, over 5 million people currently log in to the metaverse and virtual world creating and participating in the metaverse economy valued at over $825 Billion!”

What makes the 2022 Lagos Blockchain & FutureTech Conference/Exhibition unique?

First, participants will be able to mint special access NFTs for different aspects of the event and also support their preferred 2023 presidential candidates via blockchain technology;

• Conference goodie bags NFT
• Networking & Boat Cruise NFT
• Metaverse Experience Room NFT
• BNUG Exclusive events NFT

Asides experiencing the Metaverse in VR, participants will be able to:

• Lay the first stone with NFTs and learn precisely what they are and what you can do with them;
• Learn how to become an NFT buyer or seller;
• Get insights and tips from the industry’s top professionals;
• Enjoy informal networking.

Follow the link to find out more about the conference and register to attend.

While traditional banks still have a lot of ground to cover on how to solve the problem of financial inclusion, Africa is increasingly relying on digital and mobile services.

At the latest Monetary Policy Committee (MPC) retreat held in Lagos, Godwin Emefiele, the governor of the Central Bank of Nigeria emphasized the need to rethink financial sys­tem regulation, supervision and monetary policy imple­mentation in the country.  

He added that while post-COVID growth recovery in Nigeria can be adjudged to be moderate and stable, “we have seen a ma­jor change in the key sectoral drivers of that stable growth phenomenon, including the services sector, modernized agriculture, and manufactur­ing, suggesting that technolo­gy and innovation are playing a major role in output growth and economic development in Nigeria”.

This is important because it reiterates the regulator’s position on the importance of the regulation of the fintech sector, especially emerging frontiers like digital assets and cryptocurrencies.

In 2017, the CBN had earlier warned that cryptocurrencies were not legal tender and that investors were unprotected. In a circular dated February 5, 2021 (the “CBN letter”), the CBN had directed all regulated operators to desist from transacting in and with entities dealing in cryptocurrency.

In October of the same year, The Central Bank then went on to launch a digital currency with officials of the apex bank saying it would allow for financial inclusion and fiscal benefits to boost the economy.

The eNaira was therefore launched as part of the CBN’s cashless policy to improve cross-border trade, expand access to financial services, increase remittances from a large diaspora base and ultimately boost the country’s economy.

With emerging new asset classes such as Non-Fungible Tokens (NFTs) and Decentralized Finance (DeFi) built on Blockchain technology, it is clear that digital currencies are the next evolution of the financial technology ecosystem.

How can this impact the evolution of fintech in Nigeria? What are the benefits of building a structured and regulated ecosystem that’s open for innovation and collaboration between traditional institutions and new operators?

Regulatory Frameworks Will Ensure Certainty and Consistency In Policy Development

The Nigerian payment system has evolved significantly over the last decade, leapfrogging many of its counterparts in emerging, frontier and developing economies propelled by some key reforms by the different regulatory bodies.

The regulatory developments for the Nigerian fintech market have contributed to the ecosystem’s growth as they have demonstrated a commitment to creating an enabling environment that will support innovation in financial services, without compromising stability within the overall financial system.

Nigeria is also spearheading the adoption of CBDCs in Africa with the launch of the eNaira while the Securities and Exchange Commission also issued new digital asset regulations in May 2022.

In April, The Nigerian Communications Commission held a workshop in collaboration with the Bureau of Public Service Reforms (BPSR) and stakeholders, where it was concluded that Blockchain could be a bedrock of economic innovation and growth through effective implementation of policies and regulations.

Although we can still expect some policy harmonization as to how regulated entities will engage, it is clear that Nigeria is taking advantage of digital economy frameworks and regulatory initiatives that enables emerging technologies in the country. This is important because a regulatory environment clear about its goals will ensure that policymakers are always in alignment.

Driving Inclusion By Encouraging Innovation

The advent of blockchain technology has enabled digital records to be stored in a form that is even more permanent than physical records.

Blockchain technology stores numerous copies of the same records across multiple computer systems in a manner that is completely tamper-proof. This makes records on the blockchain less likely to be destroyed than physical ones.

This has created a situation where digital records are increasingly being more trusted and reliable than physical equivalents.

As the evolution of the financial system continues, the topic of decentralization will go hand in hand with it. It is inevitable because the conversation about how to ensure built-in transparency & accountability in the relationship between companies and citizens isn’t stopping anytime soon. Blockchain technologies are the future and will play a role in strengthening both the public and private sectors.

The application of blockchain technology in the Nigerian financial services industry is gradually gaining traction as industry players are now utilizing it in their service delivery. 

Notably, in 2021, Appzone, a Nigerian fintech software company, announced the launch of Zone, Africa’s first blockchain platform for payment processing that facilitates local and intra-African payments in fiat and digital currencies (we understand that a number of commercial banks in Nigeria are currently utilizing the company’s Zone product in processing the transactions of their customers).

HouseAfrica is another example of the revolutionary way through which blockchain technology is being applied to solve important challenges.

The company aims to develop intelligent and affordable homes while giving its investors maximum security of funds through the blockchain. In 2020, the company signed a partnership agreement with Nigeria Mortgage Refinance Company (NMRC) to deploy a digital/land property title authentication and verification system.

The system will make it possible for individuals and organizations – including financial institutions – to authenticate, validate or confirm the value of any property or land across Nigeria and ultimately improve the amount of mortgage financing transactions in Nigeria.

While blockchain technology is still generally unregulated in the Nigerian financial services industry, the adoption of blockchain technology via crypto-assets is now being regulated in certain respects. Pursuant to the 2020 SEC Statement on Crypto-Assets, crypto-assets are, by default, classified as securities unless proven otherwise. Consequently, the SEC also regulates crypto-token or crypto-coin investments when it is qualified as securities transactions. Well-defined regulatory policies like this will be key to further driving expansion and global adoption of digital assets while encouraging innovation in Africa.

Cross-Continental Economic Impact

Despite the rise of operators and stakeholders pushing for inclusive finance, the digital payment ecosystem across the continent – and indeed within most countries and regions – “is highly fragmented, without an overarching regulatory framework that can tie all the payment solutions together”.

Cross-border payments are often both costly and slow. This is due to a combination of conflicted regulatory coordination in many regions, and private sector actors in the instant payments landscape constantly pursuing short-term profits and market share over longer-term regional growth and inclusion agendas.

Coordination of regulation will mean greater interoperability of instant payments systems and would help promote peer-to-peer (P2P) interactions, small-scale trade, and cross-border e-commerce between African countries.

Conclusion

While no one can predict the future of fintech in Africa, what we do know is it requires a nontraditional regulatory approach—one as invested in the importance of experimentation and entrepreneurship as the practices it oversees.