by Diana Ngo
As a hotbed of innovation in the African continent, Kenya has what it takes to embrace blockchain technology: an enabling environment, a tech-oriented population and progressive regulators.
According to John Karanja, the founder of BitHub Africa and the co-founder and director of Space Kenya Networks Ltd., there is no reason why Bitcoin and blockchain tech shouldn’t take off in Kenya where, over the past decade, the country had seen the creation and rise of the world’s first mobile money service, M-Pesa.
But despite the media buzz around Bitcoin in Kenya, education is still a critical issue, and Karanja hopes to solve this with his latest venture, BitHub Africa.
Launched earlier this month, BitHub Africa is a blockchain accelerator that provides consultancy and incubation services for individuals and firms interested in learning more about the technology.
Aside from providing Bitcoin education to help boost adoption, BitHub Africa is also looking to become “a center of excellence for blockchain technologies in Africa” by helping out blockchain startups that are solving real problems.
“This means we intend to identify and spur the growth of problem solving blockchain technologies that will also have a global impact,” Karanja told BTCMANAGER.
BTCMANAGER had the chance to get ahold of Karanja for an exclusive interview where he shared how he got into Bitcoin, his plans for BitHub Africa, his views on Safaricom’s “war” on Bitcoin startups, and the future of blockchain technology in Kenya.
I first heard about bitcoin in February 2014 and was very intrigued by the potential it promised, especially given I had just come out of a m-commerce (mobile commerce) startup that had failed due to lack of a viable payment platform with which to monetize its applications.
Bitcoin promised a future of global payments that would allow startups to monetize their businesses using new pricing models like micro-payments.
Blockchain technology promises to disrupt the current financial order that currently has banking institutions sitting at the top of the food chain. Incumbents who fail to understand and implement strategies risk being rendered irrelevant, akin to the manner in which Kodak was rendered irrelevant by the advent of digital cameras.
Indeed, Kenyan banks have already had a taste of this with the arrival in 2004 of M-Pesa, the mobile money platform that revolutionized the way Kenyans transfer money and pay for services within the country. Already, it is estimated that 40% of Kenya’s Gross Domestic Product is transacted on this platform. Banks and other financial institutions will need to evolve once again.
On BitHub Africa
Having been a Bitcoin and Blockchain enthusiast for the past two years I am frustrated by the information gap that exists regarding blockchain technology even amongst the finance and technology people in Kenya and Africa.
Given that the world is fast moving in this direction of distributed ledger technology, I felt there is a great opportunity in providing education at the executive level on these fast-growing technologies with the hope that adoption grows quickly across Africa.
At BitHub Africa, we want to explore blockchain platforms that solve problems in industries such as the music industry, which can benefit from blockchain technology by creating a distributed ledger that allows for the permanent record-keeping of copyrighted music created by artists, for both tracking and collection of royalties and purchase payments of these works of art.
As such, we have spent over 10,000 hours learning about it and meeting innovators in this space.
I believe Africa is the perfect incubator for these technologies. There are many opportunities to streamline intermediation of services through blockchain technology.
On BitHub Africa’s long-term goal
Our long-term goal is to become a center of excellence for blockchain technologies in Africa. This means we intend to identify and spur the growth of problem solving blockchain technologies that will also have a global impact.
We will do this by consulting with and incubating the most promising projects emerging from the continent.
On the future of Bitcoin in Kenya
Kenya is the hotbed of innovation in Africa. If you take the example of M-Pesa, the world’s first mobile money service, it was hugely successful because of a conducive and enabling environment that combined a technology-oriented population, progressive regulators, as well as a product that solved a huge problem of money transfer within the country.
I am confident that with a similar approach, blockchain technologies will also take off here.
On Bitcoin regulation in Kenya
I am not worried. I think Kenyan regulators, in particular the Central Bank, should take time to assess the potential of blockchain technology to reduce costs and enhance transparency within multiple sectors of the economy. For example, blockchain technology could provide mechanisms to seal corruption loopholes and track illegal activities, such as money laundering, at very low costs.
However, I also believe that it is the central banks constitutional’s role to manage monetary policy and in this regard, regulating entities that utilize bitcoin the currency are well within their role. This is important to enhance safeguards that prevent money laundering and terrorism financing. They can do this without stifling the potential of bitcoin, the “trustless” protocol that allows for cross-border transfer of money cheaply and securely.
On Safaricom versus Bitcoin
Well I think this “crackdown” has been overplayed as M-Pesa based bitcoin trading volumes in Kenya continue to occur on local bitcoin platforms.
I think incumbents, startups and individuals all have the same access to the underlying Bitcoin technology so it’s really about which of these entities will adopt this technology the fastest and use it to streamline operations across multiple sectors of the economy. The jury is still out on this.
On BitHub Africa’s plans for 2016
Our primary goal in 2016 is to educate key players on the potential of Bitcoin and blockchain technology. We have Introductory and Advanced course modules on this technology.
We are targeting key sectors of the economy where there is an opportunity for disruption of inefficiencies. We hope to have our first Bitcoin-related startup incubated at our hub by March of this year.
Success for us this year will be if many executives in Kenya and other African countries begin to implement blockchain solutions within their organizations. I think Bitcoin and blockchain will finally give the people of Africa a chance to extract and exchange value from their many talents. Africa has a lot to offer to the world and Satoshi’s innovation brings us closer to achieving the dream of global inclusiveness.