It’s the largest deal of its kind in history. Leading cryptocurrency Cardano and the Ethiopian government struck a deal this spring that will see the first-ever blockchain-based ID system deployed in Africa.The system will involve five million students in 3,500 schools across the country benefitting from secure records that store their qualifications and monitor progress.
While only Ethiopia has signed up to the plan so far, the company behind Cardano, IOHK, see it as the first stage of wholescale blockchain integration in Africa. Here’s how the technology promises to benefit the continent in years to come.
Blockchain in the developed world
Before the creation of cryptocurrencies and blockchain, people indeveloped nations benefited from secure centralized systems for day-to-day tasks. Think of a simple bank transfer: the money is normally guaranteed to go from one centralized entity to another i.e. from bank to bank.
The arrival of blockchain took this to another level: being decentralized, it isn’t held back by borders or transaction costs. It’s also impossible to hack blockchain – the only person that can access it is you, as you’re the only person who has the private key.
It’s led to people using blockchain for many different things. As well as user-to-user payments, people can also book flights and deposit money into crypto-friendly online casinos. In the art world, NFTs are big news as they allow an artist to fully secure the patent to their album or painting. It has the potential to completely change the way we use money – in fact, it’s already doing so.
The next decade or so will see further uses as new technologies such as 5G and AI become more integrated in society. Analysts predict blockchain spending to hit $23 billion annually by 2023, with a wide range of industries, from insurance to legal cannabis, benefitting from it.
Cardano in Ethiopia
Ethiopia might seem like a strange choice for the first Cardano Africa project. Serious civil unrest has made many parts of the country extremely dangerous to visit and it’s one of Africa’s poorest nations.
All the more reason to start there, according to IOHK. Their philosophy is that they want to go where the technology can make the most difference – besides, if it can succeed in the hardest places, then it can succeed anywhere.
Blockchain’s decentralised nature means that it doesn’t need the same strong local infrastructure as previous systems. The ID-based system is a prime example: the process of storing student data on a public record is something that currently takes a long time to complete, if it’s even attempted at all. The blockchain in this case skips all the red tape by offering them direct access to an app on their mobile device and it’s also available for teachers and potential employers to see.
The project will operate through Cardano’s Atala PRISM solution and is expected to launch in January 2022. A separate deal with Chinese manufacturers will provide the tablets needed for students to use the tech and the authorities will fund the building of internet facilities in schools that don’t have access.
Advance into Africa
The Cardano deal with the Ethiopian authorities might be a type of trial run, but it’s easy to see why Africa holds so much Blockchain potential. The continent is home to almost 1.3 billion people, many of whom don’t have access to simple centralised systems that have been commonplace in other parts of the world for many years.
Should it go well, then it will just the start for the project in Africa and will reach far beyond the education system.
Tasks that people in developed countries take for granted could quickly become available to Africans in the continent’s most disadvantaged nations. It’s impossible for many Africans to open a bank accountdue to not having official ID, for example.Itmeans they have no access to financial instruments and, in turn, hinders their social mobility. Blockchain technology would change this as it allows banks to verify people’s identityin exchange for financial services.
It also promises to revolutionise the health industry. Patient records would be easily accessible to hospitals, and it would also provide a basis for track and trace systems when it comes to sickness and disease.
In trade, supply chains could be dramatically improved. The current system is comprised of a series of complex business relationships that are open to fraud and errors. Blockchain would provide a simple way to guarantee the authenticity of the product and track its journey, thus massively reducing handling errors and fraud – it would also improve efficiency.
Beyond Ethiopia, major African nations such as Nigeria could be the next on the list for similar blockchain projects in the future. Solving systemic issues across the continent has the potential to unlock billions of dollars of dormant capital that could improve the standard of living in many countries.