All entrepreneurs operating in Africa should consider the opportunities and implications of blockchain technology, according to Kreean Singh, partner at South African blockchain hub and incubator Blockstarters.
Despite the global hype surrounding blockchain and cryptocurrencies, the technology and its potential applications are still in their early days, says Singh. As such, the generation of young people currently in school will be the “real” users of blockchain.
“We believe the real blockchain users will be the next generation. We’re just experimenting with the tech, really,” Singh says.
There is a huge variety of possible applications of blockchain technology, and the technology is still very much evolving. All startups setting out in Africa today should bear this in mind, and consider how blockchain does and could relate to their business, Singh advises.
“The pace of development of this technology is very fast. So it’s well worth your time as an entrepreneur to figure out how this can fit into your business model.”
He believes this applies to all startups – everyone should be investigating the use-cases of blockchains within their business; although he concedes there may not be a guaranteed use.
“Blockchains do not solve every problem, contrary to what has been hyped in the past year. Remember that blockchains are a technology, and just like a bakery does not need the internet to produce cakes – the internet simply enhances the customer experience -, blockchains are also limited in applicability,” Singh says.
In particular, startups should be aware of cryptocurrencies, he says.
“Ultimately, money is why we are in business. Cryptocurrencies, in my opinion, are a stepping stone in the evolution of money, and will someday and in some form replace the current fiat system. It is therefore important for all startups to start considering accepting crypto as a form of payment.”
Cryptocurrencies can help African startups navigate their way in an environment where access to capital and formal banking can be constraining.
“Cryptocurrency also allows a startup to instantly begin interacting with the world, and is not limited to the currency of the country in which the startup operates in. As customers move towards a cryptocurrency-type ecosystem, a startup would need to include cryptocurrency as a form of payment to meet the needs of their customers,” Singh says.