- Africans, starting from governments, startups, non-governmental organizations, and generally all the people in the continent, are losing much more for failing to adapt to the advancements in the digital world
- Artists ranging from painters, drawers, actors, musicians, sculptors and writers can now sell their pieces of art across the world as Non-Fungible Tokens (NFTs)
- Every day, new games are launching on the metaverse and you can buy an altcoin in a game and earn real money from it!
- bitcoin and other cryptocurrencies are a store of value and could be a haven asset in times of turmoil, playing the same role as gold
Several African governments have stood firm against cryptocurrencies even as blockchain technology takes over the currency markets. It appears that the dice on the shift to cryptos is already cast. The possibilities enabled by these cryptocurrencies make the switch imminent.
The biggest hindrances to the success of these digital currencies is the ignorance and negativity fed towards the African market. But it appears that Africans, starting from governments, startups, non-governmental organizations, and generally all the people in the continent, are losing much more for failing to adapt to the advancements in the digital world.
In this report by The Exchange, we look at all the enabling environments where Africans can get a source of revenue or funding!
Read: Understanding NFTs and the new opportunities to monetise art
Cryptocurrencies as an investment tool
For years, bitcoin adherents have been calling the digital currency a “digital gold,” mainly because bitcoin and other cryptocurrencies are a store of value and could be a haven asset in times of turmoil, playing the same role as gold.
![Cryptos are becoming popular as a form of issuing remittances. [Photo/Chainalysis]](https://theexchange.africa/wp-content/uploads/2022/03/Chainalysis-Cryptos-issuing-remittances-750x497.webp "African governments postponing an inevitable crypto world 1")
But there is still a big question that arises. For how long will this stand true?
The adoption of cryptocurrencies is set to increase as some Africans living abroad are sending in their remittances back home in the form of these digital currencies. Bitange Ndemo, a lecturer at the University of Nairobi, says that cryptocurrencies are in the best position to facilitate the issuance of remittances since crypto transfers bypass traditional banking services, allowing for significantly faster and cheaper international money transfers.
Could Africans revive the bitcoin dump?
Since November last year, bitcoin and other cryptocurrencies have been experiencing a continuous dump. Traders who have been in the market for a long time believe that Africans could reverse the trend.
Chainalysis reports that Africa has experienced a 1,200 per cent growth in cryptocurrency payments in 2021 compared to 2020. Africa is the fastest-growing cryptocurrency market among developing economies and the third-fastest growing market in the world. Despite the rapid adoption, it remains the smallest crypto market inking the potential that the market has to revamp the dumping of bitcoin and other cryptocurrencies. One of the ways that Africans can get into the crypto world is by selling their creativity as Non-Fungible Tokens (NFTs).
The Lucrative NFT business
Artists ranging from painters, drawers, actors, musicians, sculptors and writers can now sell their pieces of art across the world as Non-Fungible Tokens (NFTs). These are unique digital assets generally used to represent art and collectables.
Non-fungible tokens are booming and have been shot to spearhead the crypto space, with NFT artwork consistently selling for millions of dollars at auctions. In 2021 alone, the NFT market generated more than US$25 billion in trading volume, and 2022 appears to generate more figures than the previous year. The most expensive token to be sold was EVERYDAYS: THE FIRST 5000 DAYS artwork, which went for a whopping US$69.3 million!
The African continent is well endowed with great culture and talent that can create value in the world’s NFT market. NFT tokens are traded similarly to traditional art, but payment is now in cryptocurrency. But most of these artists do not know how to get into the market. Here is a brief guide.
Read: Cardano’s vision to revolutionalize banking, loans and education in Africa
Create a binance account through the binance app on google play or their website to access the NFT marketplace (there are several other sites to trade NFTs from).
Buy your preferred amount of binance coin on your account listed as BNB to account for charges during the trade of NFTs (minting and gas fees).
Upload your image, audio or video, write a caption and upload it on the NFT marketplace.
On the user guide menu, click on LIST to upload your NFT, whether selling at a fixed price or auction to be paid in Ethereum.
If NFTs do not fascinate you as much, you can earn on crypto through gaming!
Earning through crypto gaming
Every day, new games are launching on the metaverse. But the exciting part is, you can buy an altcoin in a game and earn real money from it! Crazy, right! All there is to do is play the game, just like how you play Candy Crush, SimCity and Fantasy premier league. The difference now is that the points you make as a player in these games can be converted to real cash.
In no particular order of preference, such games include Sandbox, Axie Infinity, Decantraland, and many others.
Is trading in cryptocurrencies a form of gambling?
There is a frail line between trading on crypto and gambling, which can qualify as gambling depending on your investment strategy.
The difference is that crypto is decentralized, has no particular outcome and is controlled by all the traders selling and buying particular crypto. In contrast, gambling has very few expected outcomes and offers no chance to get back your resources once a bet is lost!
From that, is trading in crypto gambling or investment? You get to decide!
Are Africans investing in cryptos ‘collecting money from their fans’?
Artists in Africa are following suit of their foreign counterparts in creating their own cryptocurrencies. Some celebrities who have created their cryptocurrencies include rapper Snoop Dog, comedian Kevin Hart and pop singer Justin Bieber.
Africans who have made similar advancements to create fan tokens are Nigeria’s Davido (the Echoke social token) and Senegalese Akon (Akoin). One would qualify this as using their influence to collect money from their fans because to hold the token; you will have to invest.
The elephant in the room is whether they are creating the cryptos to create a successful business idea or they are, for lack of a better word, stealing from their fans.
“I know if I put it out there, they’re going to find a way to afford it because it’s going to motivate them,” Akon said while launching the construction of his cryptocurrency city, Akon City. “Ultimately, when you create an opportunity, people grow with that opportunity, people learn with that opportunity, people are motivated with that opportunity.”
Davido, on the other hand, said that he was looking to eliminate the intermediaries for his content to connect with his fans directly. A clever way into increasing his earnings, right? On the flip side, the holders of the Echoke Social Token will get free access to giveaways, NFTs, backstage passes, jobs, festivals, exclusive merchandise, media and hospitality benefits.
Crypto as a form of funding
Traders in the crypto world have shown solidarity in the ongoing war between Russia and Ukraine. Through Dogecoin, a cryptocurrency talked up by Tesla founder Elon Musk, and other crypto assets had raised donations worth US$35 million to fund Ukraine amidst the ongoing war as of March 2.
Mykhailo Fedorov, vice prime minister of Ukraine, tweeted about Aid For Ukraine’s project that will allow people to donate towards supporting Ukraine through the Solana cryptocurrency.
Cryptocurrencies have also been used to affect the sanctions in place against Russia. Brian Armstrong, the chief executive of cryptocurrency exchange and wallet, Coinbase, said that some citizens in the Soviet Union are using crypto as a lifeline now that their currency has collapsed. In early March, however, lawmakers in the United States urged the Treasury Department to ensure that crypto exchange platforms and companies are compliant with sanctions on Russia.
The collaboration is looking to make up to US$100,000 in equity-free investment in cryptocurrency to provide early-stage seed funding and mentoring programmes to profit-oriented technology startups that have the potential to benefit the larger population.
The applicants who qualify for the fund will receive the funding in cryptocurrency, either in bitcoin or ether, through UNICEF’s recently launched CryptoFund. The application for the UNICEF Venture Fund ended on March 8.
Cryptos issuing non-interest loans
Cryptocurrencies have created a new advancement in the fintech world, you hold a token in the market, and you get a no-interest loan of over 50 per cent on the value of the tokens that you hold. One of the tokens propelling the idea is the CARDANO.
Bitfinex, a digital token trading platform, has added Cardano (ADA) as collateral on Bitfinex Borrow (a P2P digital token loan portal. Traders holding the Cardano token will obtain loans of up to 70 per cent of the ADA tokens they hold.
“We are pleased to add Cardano to our growing list of collateral options on Bitfinex Borrow,” said Paolo Ardoino, the chief technology officer at Bitfinex. “This will provide our users with another way to take out a personal loan from our highly liquid peer-to-peer lending markets.”
How to take a loan on Cardano
Borrowers select Cardano (ADA) from the currencies listed on the Bitfinex Borrow page. They then deposit sufficient collateral into their Margin wallet. The borrower can then choose between a fixed-rate loan and a variable interest rate based on the Flash Return Rate (FRR).
Borrowers are allowed to choose the tenor in which to repay the loan back. Fixed-rate loans offer a maximum of 120 days, after which the loan converts into a variable rate loan.
The loan taken will be credited to the borrowers’ Margin Wallet, where they can make full or partial repayments on the principal and interest of the loan. This is done by moving the value of their funds back to the Margin wallet, reducing the daily interest rates.
The downside of taking loans on Cardano is that the borrowers will have to self-manage the risk of the fluctuating Cardano price.
