How-mobile-phones-are-transforming-Africa

When the pseudonymous person (or persons) by the name of Satoshi Nakamoto released Bitcoin’s whitepaper in 2008, the main idea behind it was to put power back into the hands of the people.

It read: “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

Published during the 2008 global financial crisis, when trust in the banking sector was at an all-time low, bitcoin struck a chord with those in the know. Ten years later and bitcoin remains the number one digital currency despite an influx of altcoins entering the market during that time.

Not only that, but it’s providing a gateway to financial access for the world’s unbanked populations.

According to the Global Findex 2017 report from the World Bank, there are still 1.7 billion unbanked adults worldwide. Two-thirds of them, though, own a mobile phone. In an age where everything is becoming digital, it is these devices that are helping people without access to traditional finance gain the services they need. Additionally, it could help to expand on payment histories, boosting the chances of obtaining credit and insurance.

So, as the crypto market settles into what has been dubbed a “crypto winter,” what are the major projects helping to bank the unbanked?

Paxful

paxful

Founded in 2015 by Ray Youssef and Arthur Schaback, Paxful is a peer-to-peer bitcoin marketplace. 

Headquartered in Delaware, with offices in New York, Hong Kong, Tallinn, and Manila, Paxful’s mission is to connect buyers with sellers with more than 300 payment methods to choose from.

Formerly known as EasyBitz, Paxful removes the need for a user to own a bank account to use the site. Differentiating itself from its competitors, the P2P marketplace focuses on gift cards as one of the accepted payment methods on the site.

For the unbanked population in Africa, these are extremely valuable. So much so, that Africa is Paxful’s top market, which saw an average of 17,351 trades per day in 2018. Not only that, but gift cards were among the top three payment methods by traded volume last year.

In first place was iTunes gift cards making up $282 million, followed by Amazon gift cards at $166 million. Bank transfers were in third place, amounting to $49 million.

Notably, though, even though the price of bitcoin dropped last year by over 70%, African users weren’t deterred. In fact, trading volume rose on the platform to an average of $21 million a week compared to $8.5 million in 2017.

With Youssef having known what it’s like to be homeless during the early days of EasyBitz, before crypto helped him back on his feet, he knows what it’s like for people who struggle. That’s why they are refusing to leave the unbanked behind as they know bitcoin provides the ideal financial alternative and Paxful is helping them.

BitPesa

bitpesa

Founded in 2013 by Elizabeth Rossiello, who is also the company’s CEO, BitPesa is a digital foreign exchange and payment platform.

With its headquarters in Nairobi, Kenya, the platform is aiming to make it easier to send money into and out of Africa. It also has operations in the Democratic Republic of the Congo, Ghana, Nigeria, Senegal, Tanzania, and Uganda.

It’s also covered by more than 85 countries, has over 23,000 users, and has completed in excess of 560,000 transactions.

At the moment, traditional financial processes are required where money is converted from the local currency into U.S. dollars, passing through several banks before it’s converted back into its destination money.

Yet, BitPesa simply accepts the money from a person’s bank account, moving it directly to the destination account. No middleman, no conversion fees, and all done in a few steps. With its ability to send fast and easy payments across Africa, BitPesa is helping to change how business is done on the continent.

More recently, it set up a remittance corridor with Japan in partnership with SBI Remit, Japan’s biggest remittance service provider, and a subsidiary of SBI Group, a Japanese internet financial services company.

Humaniq

Humaniq Discover the Unbanked

Pitching itself as a “new generation financial services with its own cryptocurrency,” HMQ, Humaniq is aiming to remove poverty from millions of people living in emerging economies.

Founded in 2016 by Alex Fork, London-based Humaniq is working at delivering a new financial platform with a focus on financial inclusion. Based on the latest advancements in blockchain technology, mobile, AI, and biometrics, the platform is delivering economic empowerment and community building to the world’s unbanked population.

Through the use of a smartphone, all a person needs to be verified is their face and voice designed to reduce fraud. It also means that formal identification and an email isn’t required, two things many unbanked people lack.

According to its whitepaper, the smartphone is also needed to make and receive payments while the camera enables users to earn their first coins worth $20 in an e-wallet to be spent as the user sees fit.

Through the platform, Humaniq is working at reversing the trends where the difference in income is widening by bringing people out of poverty. It is doing this by giving its users simple tasks to complete, enabling them to earn tokens in the process. Some of these include inviting friends to join the platform, making transactions or sending chat messages. Each of these sees a user being paid for services, helping them to achieve milestones.

With more than 500,000 users having joined Humaniq since its founding in countries such as Albania, Belize, Botswana, Kenya, Mexico, Sudan, Uganda, Venezuela, and Zambia, to name a few, the platform is steadily opening up the doors of financial inclusion.

Nebeus

nebeus

London-based Nebeus is a crypto platform that has two goals: to provide a service for the world’s unbanked and to create a smart financial future for companies and individuals who are “disillusioned by traditional banking services,” according to its website.

Founded in 2014, with the P2P exchange platform launching at the end of 2017, Nebeus is working at delivering a significant impact on developing countries by creating a bridge that connects them to financial services.

It does this by offering a range of services: its Nebeus card, a wallet, a crypto vault, a crypto-collateral loan, and an over-the-counter (OTC) exchange. And in March last year, it announced that residents in Cameroon, Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania, and Uganda now had access to its full suite of services.

According to the World Bank, worldwide, 55% of unbanked women are unlikely to have a bank account. Without access to a bank account they can’t save, apply for loans, buy a home or receive benefit payments from the government.

With Nebeus’ crypto-collateral loan it is aiming to change how people can access money with the use of crypto. The benefits, according to the platform, are that there are no credit checks, low-interest rates, and the person gets to keep their crypto.

Using the loan calculator, a person enters the amount of crypto they want to put down in bitcoin or ethereum and chooses the number of months they want to make repayments over. These can either be done in a one-month to 24-month period.

The amount they can borrow is provided in either British pounds, euros or US dollars. After the repayment of the loan has been completed, the amount of crypto pledged to begin with is returned to the user’s wallet.

Banking the Unbanked

These are just a few of the platforms available, but they show the steps and effort being taken to get many of the world’s unbanked population financially included.

Traditional finance is something that billions of people take advantage of every day. To not be able to open a bank account or put money into a savings account would seem strange. After all, where else would we put it?

Yet, for so many more this is a reality they have to live with. And it’s thanks to the platforms mentioned in this article that are changing how we access finance. It’s no longer a case of opening a bank account. Instead, there are now new ways of being financially independent, which are steadily becoming the norm.

Soon, it may be a case of: you still have a bank account?

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Bitcoin whales

Bitcoin has been lauded as the “answer to income equality” and “the dawn of the single greatest wealth transfer in history.”

It’s not.

The vast majority of bitcoin in circulation is owned by a tiny elite. Just like the vast majority of global money is owned by the 1%.

It’s time to reassess the idea that bitcoin is a model for redistribution of wealth and equality.

The 1% own 87% of Bitcoin Supply

According to research published in China’s National Business Daily, almost 90% of circulating bitcoin supply is held in just 0.7% of wallets.

The huge concentration of crypto wealth can probably be attributed to cryptocurrency exchanges like Coinbase and Binance. Crypto exchanges hold funds in their wallets on behalf of its users, so that wallet may represent thousands of crypto users.

In terms of monetary value, the 0.7% of wallets control $62 billion in bitcoin (correct on January 7th).

Limited Bitcoin Supply

The research also revealed that 97% of crypto wallets held less than one bitcoin.

The limited bitcoin supply (only 21 million bitcoin will ever be created) means that only a fraction of people on earth can own a full bitcoin. As Jameson Lopp pointed out, there aren’t even enough bitcoins for each Coinbase user.

To become part of the bitcoin 1%, you need only a modest 0.28 BTC, according to one estimate. And that’s before you consider lost and stolen coins.

While bitcoin is a model for economic freedom, it is unlikely to alter existing wealth structures. The 1% will still hold the vast majority of money supply, whether it’s fiat or digital.

Further reading: Who are the Bitcoin Whales? (Criminals, Traders, and Early Adopters)

bitcoin blockchain future trends 2019

There’s no other way to say it: 2018 was a true rollercoaster for the blockchain world.

While it started with a historic surge to an unbelievable crypto market capitalization of $900 billion at its peak, the market disastrously retraced by nearly 90% since those glory days.

Despite countless financial analysts and crypto experts predicting heights of up to $60,000 per bitcoin in 2018, the year, unfortunately, turned out to be one of the worst for the crypto market.

However, now it’s time to focus on the future. In order to effectively prepare yourself for the following year, you definitely want to take a look at the following sectors of the blockchain world.

1. Bitcoin Exchange-Traded Funds (ETFs)

bitcoin etf approval date

Date to Watch: 27th of February, 2019 – VanEck and Solid X Bitcoin ETF Decision Date

Bitcoin ETFs have undoubtedly been one of the hottest topics during the past 12 months, especially since they are regarded as a potential catalyst for rapid price increases of bitcoin and other cryptocurrencies. 

One ETF application, in particular, has been declared as a possible game-changer. The collaboration between investment firm VanEck, the blockchain company SolidX and the Chicago Board Options Exchange (CBOE). It is one of the few physical ETF proposals that is actually seen as promising by several financial experts. 

If a trading vehicle of this kind was approved, the ETF issuer would need to actually buy real bitcoins from an exchange or, more likely, the over the counter (OTC). A potential ETF of this size requires tens of thousands of bitcoins, and the ensemble would need to acquire them, which could lead to a rapid increase in price. 

Furthermore, an ETF would enable investors and traders to eventually trade bitcoin on a traditional stock exchange, which would also help the digital currency to gain popularity and availability. 

Unfortunately, the US Securities and Exchange Commission (SEC) has not yet decided on the ETF submitted by VanEck and SolidX. The final decision has been postponed several times, however, the SEC announced an ultimatum on December 7, 2018. The Commission chose the 27th of February, 2019, as the day for either the approval or disapproval of the proposal. 

Although dozens of established cryptocurrency specialists, like CNBC expert Bill Barhydt, believe that we will see an ETF approval in the following months, it remains to be seen if the SEC is convinced that the time is right to unleash the first physical Exchange-Traded Fund for Bitcoin.

Further reading: What is a Bitcoin ETF (And Will it Trigger a Bitcoin Price Surge?)

2. Tokenized Securities

security token map - the block
Mapping the Security Token ecosystem, by The Block

“Security tokens, not utility coins, will attract significant amounts of Wall Street money next year.”

Security tokens or tokenized securities were definitely buzzwords that grew in the past 12 months in crypto. This is, of course, because tokenized assets are one of the most promising innovations in the blockchain sector, as they could disrupt the corporate and financial world.

Rohit Kulkarni, the managing director of SharesPost, one of the leading marketplaces for private securities, firmly believes that 2019 is going to be the year of tokenized securities. In a recent article on Nasdaq, Kulkarni stated that “security tokens, not utility coins, will attract significant amounts of Wall Street money next year.” 

Despite missing regulations often being seen as a major stumbling block for the industry to grow, Kulkarni is confident that the space will mature in the near future. “We ultimately expect a more stable regulatory environment over the next six to twelve months,” he said.

In 2018, many companies already started engaging in the security token industry. Overstock, for example, became the first billion dollar company to start building their very own security token exchange, which is expected to open up trading during this year. 

Moreover, Open Finance became the first U.S. based security token exchange that went live on December 13, 2018. With traditional stock exchanges, such as Switzerland’s and Malta’s main stock exchanges, forming partnerships to build security token exchanges, the industry is without a doubt worth to keep an eye on in 2019.

Further reading:

Nasdaq Stocks on the Blockchain: You Can Now Buy Tokenized Shares in Apple, Tesla, and Facebook

Real Estate on the Blockchain: Is Tokenized Property a Reality in 2019?

3. Nasdaq and New York Stock Exchange Get Involved in Crypto

Nasdaq bitcoin futures

Date to Watch: Late January – The expected launch of Bakkt.

The two biggest stock exchanges in the world will step into the crypto ring in 2019: the New York Stock Exchange and the Nasdaq. 

Bakkt, a cryptocurrency exchange built by ICE, which is the parent company of the NYSE, planned to launch the first physical-backed bitcoin futures on January 24. Although the start has already been postponed several times, crypto enthusiasts still see the exchange as a potential game-changer for involving institutional investors into the market, due to the reputation and experience that is connected with its operator.

Meanwhile, Nasdaq is following Bakkt on its mission and recently announced it was working on Bitcoin future trading for 2019 as well. Further news from Nasdaq include the exploration of security tokens and a potential exchange for such assets in the following time.

While it is not yet certain what kind of future security token trading Nasdaq will be providing, it still shows that some of the biggest financial enterprises in the world are not scared of the overall bearish market sentiment of 2018. “The concept of having a digital currency that does allow for transfer of money across borders, that really transcends the banking system, and allows for a seamless transfer, is really really fascinating and one that we have to assume will become a part of the ecosystem of the internet,” Nasdaq CEO Adena Friedman commented on digital currencies such as bitcoin.

Further reading: “We’re Doing This No Matter What”; Nasdaq Confirms Bitcoin Futures Launch

4. Custody and Storage Solutions

fidelity-investments-crypto-blockchain-bitcoin-760x400

Fidelity: We’ll “make digitally native assets, such as bitcoin, more accessible to investors”

$1 billion in cryptocurrency was stolen in 2018 with high-profile crypto exchange hacks hitting the headlines. Keeping cryptocurrency on an exchange is risky. And, while holding bitcoin yourself in a personal wallet is safe, you risk losing the wallet.

That’s why custody and storage solutions will be a huge talking point in 2019.

As for institutional investors, bitcoin or storage solutions are seen as major hurdles for attracting the big fish to the crypto market. Most institutional investors are prohibited from investing in assets unless they are held in secure custody provided by highly specialized firms, 

Coinbase and other blockchain companies already gave birth to novel crypto asset custodial solutions in 2018. Fidelity, an established asset management firm that administers its clients’ assets with a combined worth of about $7 trillion, also decided to “make digitally native assets, such as bitcoin, more accessible to investors,” and founded a new subsidiary that focuses on storing digital assets for its clients. According to CNBC, the company is already in the process of onboarding clients and is expected to launch its platform in early 2019.

Some say that we should even expect major banks to join Fidelity and Co. in providing services for storing bitcoin and other cryptocurrencies. As stated in several reports, Ripple CEO Brad Garlinghouse, at the Singapore FinTech festival in 2018, mentioned that banking institutions are about to offer blockchain asset custody solutions to their clients during the next year.

5. Over-the-Counter (OTC) Trading

Circle OTC bitcoin trading

The Circle Trade OTC desk

Circle reported $24 billion in OTC crypto trading last year

OTC or over-the-counter trading is another keyword that pops up here and there when scanning the blockchain related stories of 2018. OTC trading is the private buying and selling of cryptocurrencies, often in huge amounts, off the major exchanges.

Bitcoin OTC coverage has increased in the media and social networks, but the trading activity itself seems to have increased in 2018 as well.

With Goldman Sachs-backed Circle’s OTC trading platform recording $24 billion in OTC trading last year, it is regarded as a true money-making machine. “We have seen triple-digit growth enrolling in our OTC business. That’s a big growth area,” mentioned Jeremy Allaire, the CEO of Circle, in an interview with Bloomberg in October.

Consequently, some of the biggest cryptocurrency exchanges are now working on their own OTC trading desks or, in regard to Coinbase, quietly launched one in the matter of a few months. 

Binance, on the other hand, decided to act in a different way, as its newly founded investment wing Binance Labs recently invested $3 million into a U.S. based OTC desk called Koi Trading. 

With major exchanges moving into the OTC business, the field is likely to play a key role in the blockchain world during 2019.

Further reading: What is Bitcoin OTC Trading? Inside the Mysterious World of the Rich and Nebulous

6. Banking and Blockchain

Creating a “seamless experience for storing and managing digital assets”

Banking institutions around the globe are already experimenting with blockchain technology in order to improve cross-border trading and daily operations. In 2018, several achievements were made and they might give us an outlook of how the following 12 months could look like for banks.

The first real customer transactions between several big international banking institutions were conducted on the blockchain platform We.Trade on July 3, 2018. This event is considered a major milestone for blockchain adoption, as institutions across all industries were previously not interested in leaving their sandbox test environments.

While established banks are continuously pushing forward adoption of distributed ledger technologies, new players are also eyeing the creation of banks that are focused on blockchain assets. 

Smaller offshore destinations in the Caribbean, e.g. Bermuda, recently announced an update of their banking legislation in favor of blockchain technology and assets. Additionally, a young enterprise called EQIBank, founded by previous bankers from HSBC, UBS and Credit Suisse, just opened their first customer accounts in December 2018.

EQIBank aims to provide a seamless experience for storing and managing both traditional and digital assets, as stated in a recent press release. This can definitely be considered as an upcoming trend since crypto startups around the world are currently applying for banking licenses in their countries.

7. The Cryptocurrency Insurance Industry

Gemini insurance
The Gemini exchange and custody service is now fully insured

“The evolution is dramatic”

Insurance giants, such as MetLife and Allianz, are often regarded as notable blockchain researchers and adopters. Fair enough, considering that transparent ledgers and smart contracts seem to be the perfect enhancements for the daily business of an insurance company. The most promising use-cases include, but are not limited to, automating payments once the terms of a claim are met, increasing the transparency of transactions, storing information and enabling blockchain powered IoT processes.

Ryan Rugg, the global head of insurance at R3, believes the current evolution of insurance companies is a huge leap for the industry. “These developments would be innovative in any sector, but when you consider the processes underpinning the insurance industry have remained largely unchanged for hundreds of years, the evolution is even more dramatic,” Rugg explained in an article on BlockTribune. When talking about the future, Rugg further stated that “2019 will undoubtedly see the insurance industry enter the next stage of its digital transformation.”

Further reading: Cryptocurrency Insurance: What is It?

8. Regulation Developments

“We need appropriate regulations to be put in place and enforced to safeguard the interest of investors”

2018 has definitely seen some considerable developments in terms of global blockchain regulations. With Malta officially becoming a blockchain island, smaller jurisdictions opening up to security tokens and the SEC finally cracking down on a majority of all the controversial ICOs, the blockchain space clearly advanced and is on its way towards becoming a matured industry. Still, there are countless regulatory issues left that hamper the global adoption of blockchain technology and services.

With 2018 as a foundation, we most probably will see exponential progress in the following year in the most important jurisdictions, such as the US and the EU. In fact, there are already several signs that validate this assumption. On October 18, the SEC announced the launch of a new FinHub, where regulatory approaches to novel financial technologies, like blockchain, are researched and evaluated.

After Singapore, Malaysia is another Asian country that wants to introduce new legislation for blockchain in the following year. “While some parties might still be skeptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors,” said Lim Guan Eng, Finance Minister of Malaysia. In Liechtenstein, the government is currently working on the Liechtenstein Blockchain Act, which should pave the way for institutional investors in 2019.

Further countries that are expected to unveil updated laws for blockchain include the United Arabian Emirates, Israel, Russia, Thailand and seven major states within the EU. The ball is finally rolling and global regulations in various areas of distributed ledger technology seem to be closer than ever before. We definitely have an exciting year ahead of us and might even be looking towards one of the most productive years for the blockchain industry ever.

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bitcoin genesis block

Bitcoin is officially ten years old. On this day ten years ago, Bitcoin’s elusive creator Satoshi Nakamoto mined the first Bitcoin block. Known as the “genesis block” or Block#0, it marks the very start of the Bitcoin blockchain.

A decade later, there are now more than half a million blocks on the Bitcoin blockchain. And the price of one bitcoin has soared from almost zero to $3,900.

Genesis Block

The very first block was mined by Satoshi on January 3rd, 2009. You can actually see it here on our Block Explorer.

The block contains just one transaction: the 50 BTC reward for mining it. 

The block also contains a pointed message about the existing banking system with a message written into the code:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

The message refers to the headline in The Times newspaper on that day. You could argue it’s a simple time stamp. However, it’s more likely a comment on the failing banking system. British Chancellor Alistair Darling was considering a bailout for the banks after the financial crisis in 2008.

It’s no coincidence that Satoshi included this message as he ushered in a radical new monetary system of his own.

Satoshi was rewarded with 50 bitcoins for mining the first block. However, due to the way the bitcoin blockchain is coded, the reward for the first block cannot be spent. Over time, people have donated additional BTC to the block.

Even today, the Genesis block received a gift from the following address:

1HappyTenthBirthdayBitcoinxvYeM9e

“Thanks Satoshi”

To celebrate the anniversary, crypto exchange BitMex took out an advert on the front page of The Times. It reads: “Thanks Satoshi. We owe you one. Happy 10th Birthday, Bitcoin.”

It’s a subtle nod to Satoshi’s hidden message on the genesis block which referenced The Times newspaper headline.

Happy birthday, Bitcoin!

Further reading: 24 Clues About Satoshi Nakamoto’s Identity (Bitcoin’s Mysterious Creator)

stocks on the blockchain

From January 9th, investors will be able to buy tokenized shares in leading tech companies. The initiative is powered by Estonian-based cryptocurrency exchange DX.Exchange and Nasdaq. 

Using the DX.Exchange platform, investors can purchase shares in Apple, Tesla, Facebook and others, represented by an ERC-20 token on the Ethereum blockchain.

Stocks on a blockchain: how does it work?

If you want to buy stock in Facebook, you’d purchase the relevant token on the DX.Exchange. The exchange’s partner MPS MarketPlace Securities will then buy the corresponding Facebook stock, and issue an ERC-20 token to you.

As explained in the accompanying press release: 

“Digital stocks are backed 1:1 to real-world stocks traded on conventional stock exchanges. You purchase tokens for leading assets that you choose to invest in, such as Google, Amazon, etc. Therefore, when you are a token holder, you own shares of the company.”

Token holders are also entitled to the same cash dividends as real shareholders.

The trading platform itself will also tap into Nasdaq’s SMART technology, which monitors suspicious trading activity and manipulation.

Why buy tokenized shares?

Firstly, it means you can buy fractions of a share. If you don’t want to buy one whole share of Amazon stock (at $1,500), you could purchase a third of a share via the tokenized platform.

It also means you can buy stocks with bitcoin. Since DX.Exchange is a cryptocurrency exchange, you can simply buy tokenized shares with BTC.

Lastly, you can purchase shares after-hours. Normal stock market trading is restricted to working hours. But with tokenized shares on DX.Exchange, you can buy stocks in the middle of the night.

Speaking to Bloomberg, DX.Exchange CEO Daniel Skowronski said “We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”

Which stocks are available?

The platform will launch with ten leading stocks from the Nasdaq exchange:

  • AlphaBet (Google)
  • Apple
  • Amazon
  • Facebook
  • Microsoft Corporation
  • Tesla
  • Netflix
  • Baidu
  • Intel Corporation
  • Nvidia

More will be added as the platform expands. The tokenized shares will open in Europe on January 9th, and launch in US in mid-late 2019.

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