Chris Bates is the Chief Security Officer of Bitland, a company that is putting in the grueling legwork of applying blockchain to real-world problems. His message is clear: you can’t escape the middleman, and you can’t ignore the massive hurdles that still need to be overcome.
A search for blockchain in Africa yields ambiguous results. “Emerging markets” is a term steeped in clashing stereotypes. This is the land of the underserved, the unbanked, and the unlimited opportunities presented by systems that fail. When Zimbabwe’s military seized power last year, the price of Bitcoin on local exchanges soared to 165% of the global price at the time. Kenya hosts a fast-growing crop of crypto miners and according to Citigroup, Nigeria now holds the world’s third largest bitcoin holdings as a percentage of GDP - just behind Russia and New Zealand.
Make no mistake: this is a wave that everyone wants to catch. The question is, can blockchain move beyond its investment potential for the few and dramatically improve the ease of doing business across the continent? Can it truly usher in the freedom it promises for marginalized people?
Talking and doing
Chris Bates approaches the subject with reserve. According to him, discussions on potential use cases of blockchain are still swathed in layers of illusion and misplaced ambition.
“People seem to be more interested in talking about blockchain use cases in emerging markets, than actually implementing them.”
In Ghana, 71% of land is still unregistered. Bitland was founded by Narigamba Mwinsuubo, who wanted to transform land ownership in his home country where corruption, nepotism and the slow-grinding wheels of bureaucracy have entangled people in land disputes for decades. Bitland’s vision is to record title deeds onto the Bitshares Blockchain – a fully fledged utilities exchange system that supports value tokens (such as BitUSD or BitGold) tied to real-life assets. Bitland’s model relies on key partnerships and a strong community presence to try to move land ownership from the morass of red tape and shady deals in which it is currently mired to a system that is just and open.
Understanding the market
Bates says that creating valuable blockchain implementations involves far more than getting the technology in place. Execution is the tip of the iceberg. First comes understanding the complexities of the market in which you hope to work, and familiarity with the challenges faced by the people who will ultimately make use of your product.
“We have to sift through a lot of misinformation,” says Bates. “Chain of custody is the only real use case of blockchain technology. It doesn't matter what the ‘property’ is – you could be talking about money, land or information. But you can’t just solve chain of custody by putting a system on the blockchain – you have to trust who’s putting the information there in the first place.”
Less hype, more listening
Bates argues that in many countries, systems already exist that have built the foundations for rethinking financial services. We’re not doing enough to learn from them and improve the existing infrastructure with new technology.
He points to the example of Mpesa, a mobile money transfer and microfinancing platform that already serves over 30 million users in ten countries and three continents.
“There are many people who say that blockchain will fundamentally change systems and serve those who have traditionally been excluded. We’ve turned Bitcoin into a messianic symbol, as the only mechanism to bring anyone in Africa out of poverty. But this is an argument that has lost touch with people on the ground. Pointing to hypothetical examples is not good enough.”
An engine of neocolonialism?
Chris is firmly skeptical about just how transformative blockchain can be, given our current approach.
“There are a lot of sloppy rushes to attach blockchain to any process without understanding the grand implications of the product, much less the people who are meant to use it. If we want blockchain to be successful all over the world, not just in Silicon Valley, we have to address this.”
Chris believes we’re building a machine for an economic bubble – it may not “burst” in the sense that critics predict, but in emerging markets particularly, it is in danger of becoming insular very quickly, and of reflecting the hierarchy and centralization that plague traditional systems. In the current environment, where ICOs raise millions of dollars in a matter of seconds, regulation is still muddied waters, and most “users” are pump-and-dumpers or die-hard HODLers, it would appear that we are very far from the disrupted future that crypto-evangelists envision.
Companies like Bitland are showing that to put this technology in service of marginalized people, you have to address the hurdles of reality on the ground. In many places, basic infrastructure is still an issue. Furthermore, you need to combine strong technology with an even stronger range of soft skills - political, economic, social, and psychological, not to mention a huge amount of stamina and determination.
There is still a middleman
The biggest challenge facing Bitland is getting enough people to see the potential in their project and raising funds. This is likely to be the challenge for all entrepreneurs trying to link traditional, inefficient and often failing systems to a new chain of custody. Inevitably, bridging these two worlds involves making use – if only temporarily – of middlemen. And middlemen involve political affiliations.
“We have to be wary of politics. If we become too close to one government, when the power changes, we get thrown out, too. Good policy can easily be dissolved simply because it is associated with the previous government. This is a problem all over the world – just look at what is happening to Obamacare!”
“Our challenge is to engage academia and government, while remaining in the middle and staying true to our vision. The only reason we’re still around is that we have the support of people who would actually benefit from this project. Community response has been the least of our problems.”
On being brown in crypto
The distrust that traditionally greets people of color in all fields is never far from the daily reality faced by startups like Bitland. The blockchain community is still in its infancy, but diversity is an issue that is already glaringly obvious.
“There is so much venture capital floating around crypto. We haven’t gotten any of it because we’re brown. Brown people don’t get business loans, they don’t get venture capital, and they don’t get angel investment. It comes down to how honest people want to be about it – black people simply don’t get support.”
“Nobody wants to say it because they’re afraid of not getting any money, and nobody wants to hear it because they’ve been not giving money to people who look like us for so long.”
Warriors for wealth inequality
Bitland sees its role as more than blockchain pioneering – it is engaged in a far older battle for land rights, an issue that is at the center of wealth inequality in Africa.
“You could look at Bitland as a blockchain project, but you’d really be missing the bigger picture. We’re fighting neocolonialism. We’re a Trojan horse for fighting wealth inequality, and the only way to fight wealth inequality is through ownership of property and land. So long as you have foreigners controlling the land and the economies that function on it, you cannot have economic independence.”
Revolutionary systems are only as revolutionary as the people behind them. The market volatility of early 2018 has been a sobering reminder that blockchain is still in its infancy, and the questions we ask now will help shape the attitudes of governments and institutions that remain skeptical.
Will the triad of banks and fintech startups, telecommunications companies, and electricity suppliers collaborate sufficiently to open this market to the masses? What is holding back the establishment of crypto infrastructure in Africa, in the form of exchanges and wallets, that might enable more people to switch over to the technology of the future?
African realities make these questions critical. For the most part, Africans will have to answer them - but we might well disrupt our own confidence just a little, and challenge some of our own cherished assumptions.
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