What is blockchain?
It is a transparent, secure and tamper-proof method of storing data. It can also be updated as new transactions are added. Bitcoin has become the most recognised user of blockchain. For a fuller explanation of the concept watch “What is blockchain?” on YouTube.
Why is blockchain technology so powerful?
Think how many people in Africa send remittances back to their families in different countries or the complications of importing and paying for goods. In these types of transactions banks play an intermediary role as the various parties need certainty that the transactions will be completed on an arm’s length basis.
Blockchain takes out the necessity of having a third party intermediary as it allows the two parties to interact and deal directly with each other. This will make these transactions less administratively burdensome, much faster and cheaper. With the blockchain, you will be able to view all transactions and the cryptography used makes them accurate and valid.
Large banks are now racing against each other to be the first to make the blockchain work for their clients – Standard Bank is testing the technology. Shipping companies are also designing blockchain technology and the venture capital market is awash with start-ups specialising in blockchain technology.
We often read of how behind Africa is in technology. But also think how parts of Africa have used technology to close this gap – the use of cell phones in East Africa to do online banking is an example. Embracing blockchain could help us to further “leap-frog” into becoming more globally competitive.
Think about whether there are any creative ways your business might be able to use it.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)