Africa's Crypto Assets: Simple and Pure

A few months ago, I once again set foot on the hot land of Africa. The pickup truck drove through the raised yellow dust, and the afterglow of the setting sun outlined the unfamiliar yet familiar contours of the African continent. Being an outsider provides enough space to think about our roles as "global citizens" and the relationship between the Crypto Assets industry and this world.

Upon further observation, it is found that Crypto Assets can provide underdeveloped countries in Africa with an opportunity to synchronize with the world. The belief and determination of these countries in Crypto Assets indicate that they are no longer satisfied with compromising with the old systems and frameworks. Instead of struggling in adversity, they should fully embrace Crypto Assets and move towards a bright future.

During a certain conference, I had the opportunity to chat with an industry insider about her unwavering belief since entering Africa and diving into the Crypto Assets field. She will continue her entrepreneurial journey, delving deeper into Africa, following a belief that may be little understood but is simple and unpretentious in a complex society.

At the end of a certain Crypto Assets conference, after deep exchanges with peers over the past few days and the prevailing negative emotions, the discussion about whether the "Crypto Assets industry has already come to an end" reminds me of a small incident from a few weeks ago:

I have been living in Paris for two years now. One day, I was working remotely at a small café near my home when I suddenly received a call from Uganda. After a mix of surprise, delight, and confusion in our greetings, I realized that it has been 7 years since I left the traditional industries in Africa to dive into Crypto Assets.

The caller was a senior advisor to the Ugandan government, accompanying the president on a visit to China. During my years rooted in Africa, I worked for central enterprises and the United Nations International Development System, dedicated to promoting Africa's industrialization process and inclusive finance. With his help, we collaborated on projects such as investment promotion between China and Uganda, and the promotion of women's handicrafts in Uganda, establishing a friendship.

I can talk for a long time about my experiences living in Africa for those few years. There were high-end experiences, such as having a deep conversation with the President of Senegal at his home; and there were perilous moments, like when a friend’s boyfriend tragically lost his life in a terrorist attack in the shopping district we often visited in Kenya’s capital. I had changed my flight at the last minute, thus avoiding the worst aviation disaster in Ethiopian Airlines' history, but several acquaintances, including my high school classmate and a friend’s colleague, unfortunately perished. However, deciding to leave Africa was a resolute and decisive choice.

This has to start from the chance encounter with Crypto Assets. Interestingly, seven years have passed, and every time I chat with new and old friends from the Crypto Assets circle in a café, stories about Africa are always a topic of interest, as if it is a utopia that escapes the realities of困境, a psychological solace that romanticizes exotic adventures.

However, I believe that the deep questions and answers regarding the application value of Crypto Assets are actually contained within those seemingly ethereal stories.

Transfer of Value: Where is the Money Flowing? How is it Used? Where is it Used?

As we all know, a certain trading platform has a loud vision: to increase the freedom of capital flow. So, when we think about whether the Crypto Assets industry has already come to an end with such deep-seated questions, we might as well first examine from a macro perspective how several global value chain shifts have occurred in history, what stage of historical development we are currently in, and why this trading platform has such a slogan.

Let's start with the old "narrative". There have been three global industrial revolutions in history. The "steam revolution" originated from the invention of the steam engine in the UK, which significantly enhanced productivity, allowing small-scale handicraft textile workshops to achieve large-scale industrial production. During the "electricity revolution," breakthroughs were made in electricity, chemical industry, and heavy industry in the UK, the US, Germany, and France, leading to the development and perfection of the European industrial system. The third revolution is the "information revolution" we are familiar with. The development of information technology, computers, electronics, and automation industries propelled countries like the US and Japan to become important forces in the world economy. Meanwhile, the "Four Asian Tigers" (South Korea, Taiwan, Singapore, Hong Kong) also underwent rapid industrialization in the latter half of the 20th century, developing advanced manufacturing and financial industries, and integrating into the global value chain system.

It can be seen that each round of industrial revolution has brought about changes in production relations due to changes in productivity, thereby promoting some countries to participate in the global value distribution system using their "comparative advantages". China has benefited from the reform and opening up that began in 1978, learning from the advantages of the rise of the Four Asian Tigers such as Singapore. By building special economic zones and industrial parks in the developed coastal areas, utilizing China's low labor costs, large labor base, and hardworking "comparative advantages," along with opening up markets and attracting foreign investment, it developed an export-oriented manufacturing industry from the coastal areas, becoming the "world's factory" and establishing and consolidating its indispensable position in the global value chain distribution at that time.

The details of several grand industrial revolutions spanning over a century could fill volumes, but that is not the focus here. It is worth mentioning that each industrial revolution is also a process of wealth redistribution. Africa, due to its long-standing colonial history and various complex industrial policies and international political factors, has been unable to partake in this "cake-sharing" process.

So is Africa really poor? Lagos, the capital of Nigeria, has the highest density of private jets at any airport in the world. After a trading platform launched local payment channels in Africa, the per capita trading volume in Africa far exceeded that of European and Asian countries. The wealth level of Africa's rich surpasses our general understanding and imagination. Due to Africa's rich resources, especially oil and agricultural resources, the upper class can live comfortably for generations relying on the primary industry that directly exports raw materials; ordinary people can only get a small share and basic sustenance in the tertiary industry - the service sector. The entire continent lacks manufacturing, and the financial industry is monopolized. Due to the lack of infrastructure, the cost of financial services is extremely high, making it impossible for ordinary people to have bank accounts or pay bank transfer fees. The severe and almost absurd wealth gap is the most common social reality in Africa.

During an international organization’s research project back then, the Djibouti government arranged for us to stay at the Kempinski Hotel, the most luxurious hotel in this barren East African small country, with a price of 300 dollars per night, equivalent to half a year’s income for many locals. I still remember an image: on a beach chair by the Red Sea at the hotel, a white businessman was talking loudly while smoking a cigar, and in front of him, a black waiter held a tray, standing upright, the white shirt and red vest contrasting sharply with his black skin. He gazed into the mist over the Red Sea in the distance, his eyes filled with numbness and confusion.

Our work at that time involved a group of young elites with degrees in economics, finance, sociology, and other fields from top global universities, tasked with designing how international organizations should allocate aid funds to Africa and ensure that these funds would be effective. Among us was a British girl who had just graduated from Oxford University. Upon hearing that we were going to stay in a luxury hotel costing $300 a night, she tearfully refused to check in, feeling that it was a mockery of her topic. However, when she saw the living conditions of ordinary people, with tin-covered houses creaking under the scorching heat of 50 degrees, she silently withdrew her insistence.

It was at that time that I decided to give up that job. Although what we were doing seemed full of compassion, we talked grandly about industrial transfer, discussing how to develop manufacturing in Africa, integrate into the value chain, and allow ordinary people to enter factories to learn from China's and Southeast Asia's experiences in garment and shoe making. I personally stayed in a Chinese factory in Senegal for a month, interviewing female workers and observing their production of low-end sports pants for export to Europe and America. But this process was too slow. In the entire traditional "aid" system, the ones who benefited the most were probably not those African female workers who were "taught to fish," but rather the senior clerks sitting in London offices writing reports and auditing projects, as well as us international organization elites who stayed in $300 hotels on business trips. The data also shows that as much as 70% of the funds in the entire chain were consumed in "proving how this money was used, where it was used, generating audit reports and impact reports."

I started paying attention to blockchain, focusing on Crypto Assets, and the fourth revolution led by blockchain technology and artificial intelligence, which has become an opportunity to change currency, change Africa, and change the fate of the vast impoverished population.

True Decentralization at the Kampala Market

The son of the Prime Minister of Uganda founded a Crypto Assets organization a few years ago, bringing together several "second-generation officials" studying in the UK and the US, along with tech enthusiasts, to work on a few small projects related to Crypto Assets. For example, they developed a way to transfer Crypto Assets peer-to-peer using non-smartphones in areas completely devoid of 3G networks. Africans understand Africans better; most locals are using those non-smartphones that can only make calls and send texts. Since many Africans do not have bank accounts and are unwilling to travel across the city to find a remittance service point or one of the few banks for transfers and remittances, the locals' remittance method is simple and direct: mobile phones based on USSD technology can send money directly to friends via text messages, with each person's phone number serving as their "wallet"/account, and their phone balance representing their account balance.

I personally experienced a smooth "registration, identity verification, and transfer" process through a friend of this organization: I bought a $50 phone at a telecom provider next to the Kampala food market. After waiting in line, the counter staff skillfully conducted the identity verification process, which took 3 minutes in total. The staff helped me recharge my "phone bill" with cash. In the village, there are numerous official and unofficial service points, and when you want to "cash out", you look for the "village representative" on duty at the service point, send him a text for the transfer, and he gives you cash. "Recharging" is the opposite process. The entire experience was smooth, and it was completely point-to-point, with no third-party involvement, and no trust issues at all. This product and process are not only available in the capital but have also been widely rolled out in rural areas.

Later, I joined a trading platform, and the first year was about responding to the platform founder's vision of "mass adoption" by establishing a truly blockchain and Crypto Assets-based network in Africa, starting with the most basic charity projects. The charity department of the platform was born, and on the world's first fully "transparent" peer-to-peer donation platform, due to the characteristics of blockchain, every internet user can supervise each Crypto Assets donation reaching the wallets of Ugandan villagers directly without going through any third party. The villagers then used Crypto Assets to purchase potatoes and cabbage from farmers who accept Crypto Assets, with no involvement of fiat currency throughout the process. When farmers need fiat currency, they regularly exchange Crypto Assets for local fiat currency through local exchanges or over-the-counter transactions.

Later, we also issued the world's first (and possibly the only one to date) "value stablecoin" on a certain public chain: Pink Coin. Unlike other stablecoins, Pink Coin is not pegged to the "price" of any fiat currency but is linked to the value of goods: each Pink Coin is associated with the "value" of one girl's sanitary pads used for a year in Uganda.