The adoption of cryptocurrency transactions in Africa is rapidly growing. A continent that is already well up to date when it comes to digital transactions, Africa has already embraced mobile money and other online payment methods such as Paypal and Skrill. Africa has also contributed to the cryptocurrency world positively by launching successful projects, such as the Lead token. STX is a native cryptocurrency of the Stacks blockchain. This write-up was written by me (David Rusenza) and Talent Muzha. This article will detail what is the Stacks blockchain and how it can make an influence Africa.
What then is the Stacks blockchain?
Formerly known as Blockstack, Stacks is a layer 1 blockchain that is connected to the Bitcoin network in such a way that it runs on top of the Bitcoin blockchain using the security and capital prowess of the Bitcoin blockchain. Stacks make the Bitcoin blockchain scalable and has brought decentralized applications and smart contracts to the Bitcoin blockchain. Stacks blockchain has its native token called STX and uses a consensus mechanism known as proof of transfer. Proof of transfer allows holders of STX to earn BTC through stacking.
Possible use cases of STX in Africa
1. Source of income
Africa is well-positioned to benefit from STX since it holds a growing generation of young individuals that can be entrepreneurs in the future. Africa has high unemployment rates as claimed by (United Nations, 2020) that countries like South Africa at 28.5%, Lesotho at 22.8%, and Eswatini 22% range in the top ten of countries with high unemployment rates worldwide. People in Africa are already exploring new ways of making money. STX offers such an opportunity through participating in stacking pools whereby STX holders receive Bitcoin rewards for temporarily locking their STX tokens. In a nutshell, STX can empower people in Africa to make a living for themselves.
2. Avoid currency instability
African countries have in recent years endured problems that come from the use of unreliable local currencies. In 2008, Zimbabwe recorded the second-highest hyperinflation in the whole world. (Corporate Finance Institute) reported the hyperinflation to be at approximately 79.6 billion percentage. Stacks is working towards having a stable currency of its own through Arkadiko. Once fully out, individuals in Africa can start storing their wealth in the Stacks stable coin and avoid losing their wealth through inflation that may arise.
3. A win for remittances
Africans in the diaspora have usually found it difficult to send money back to their loved ones due to charges that exist in transferring funds and paperwork required in the process. WesternUnion is one of the most used platforms in remitting money to Africa and charges a minimum of $10 to send $100 to Africa (WesternUnion, 2021). The same $100 can be sent for less than $1 in charges using Stacks. STX can be used to remit money to Africa as it is cheap and very soon micro blocks will be available on the Stacks blockchain, thus it will take no time to transfer funds from one wallet to another.
Benefits of leveraging the Stacks blockchain in Africa
Through the Stacks blockchain, companies in Africa can create supply chains that enable easy tracing of items since blockchain technology brings transparency, goods can be traced to ensure there is no misusing them during the supply chain process. Multiple challenges such as theft and counterfeit will be easily traced as well.
2. Enhanced security
Stacks blockchain uses the security of the Bitcoin network making it secure as much. Traditionally blockchain technology utilizes advanced security compared to other platforms that specialize in keeping records. Every transaction is encrypted and has a proper link meaning, security is undeniably high, and companies in Africa can adopt the Stacks blockchain to ensure their records are safe (Geroni, 2021).
3. Increased Efficiency
The Stacks blockchain technology is decentralized. It removes the need for the middlemen and facilitates faster payments this is because it allows P2P transfers. Real Estates businesses can use the Stacks blockchain to manage their properties efficiently through utilizing smart contracts to automate agreements between tenants and landlords.
Why Stacks and not any other blockchain?
The Stacks blockchain uses the security powers of the Bitcoin network. The Bitcoin blockchain is one of the most secure layers out there making Stacks a secure layer that is safe to use. Growth in the Stacks blockchain is going to continue rising as they made sure that new ideas and projects on top of the Stacks blockchain are always coming through projects such as the accelerator program. New ideas have already started pouncing within the Stacks blockchain which includes the launching of CityCoins and Risidio.
In a nutshell, Stacks can only help Africa to move forward both economically and technologically as it brings ways and measures that solve some of the major challenges, Africa, as a continent is facing.
- Geroni D. Top 5 Benefits of Blockchain Technology. 101 Blockchains. Published January 27, 2021. Accessed April 23, 2021. https://101blockchains.com/benefits-of-blockchain-technology/#:~:text=Advantages%20of%20Blockchain%20Technology,-There%20are%20many&text=Enterprise%20blockchain%20technology%20enables%20organizations,and%20hence%2C%20easy%20to%20track.
- Ilker Koksal. The Benefits Of Applying Blockchain Technology In Any Industry. Forbes. Published October 23, 2019. Accessed April 23, 2021. https://www.forbes.com/site/ilkerkoksal/2019/10/23/the-benefits-of-applying-blockchain-technology-in-any-industry/?sh=1f72186749a5
- Corporate Finance Institute. Hyperinflation. Corporate Finance Institute. Published November 14, 2019. Accessed June 15, 2021. https://corporatefinanceinstitute.com/resources/knowledge/economics/hyperinflation/