Original author: PATRICK MCCORRY

Compilation of the original text: Deep Tide TechFlow

I took a trip organized by Borderless Africa as a small team with Yoseph Ayele, Songyi Lee, Jeff Coleman, Ye Zhang, Kartik Talwar and Jacob Willemsma.

The trip was between Kenya and Nigeria and lasted about 9 days.

In each country we conducted the following activities:

• QA and panels;

• small circle discussions moderated by locals;

• Developer Education Workshop.

In addition to these events, we have the opportunity to meet founders and well-known contributors.

This article represents my personal views and insights gained from those conversations. Highlights include:

• USDT and Binance P2P are wildly popular

• Desire to make money based on ability rather than location

• What does the future hold?

Disclaimer: Each event invites locals to learn about Ethereum and Layer 2 protocols. The audience at these events is likely to have a strong interest in cryptocurrencies. While it may not be broadly representative of todays population, it could become mainstream in the future as cryptocurrency adoption continues to expand.

USDT and Binance P2P are wildly popular

I asked the same set of questions at each event:

• Who is paid in cryptocurrencies?

• Who pays wages in local currency?

• Who prefers to pay in Bitcoin/Ether?

• Who prefers stablecoins?

• Who is actively using Binance’s P2P marketplace?

Across all events, responses from nearly all participants were fairly consistent:

• They once received their salary in cryptocurrency.

• They prefer to pay in stablecoins, especially USDT.

• They use Binance’s P2P marketplace to exchange stablecoins for local currencies (and vice versa).

• There isn’t much interest in holding native crypto assets like Bitcoin or Ethereum. Additionally, participants prefer networks like TRON or Binance Smart Chain for trading.

The reasons: virtually no fees and quick confirmation times.

Binance is popular

While competitors like onboard are on the rise, almost all players still rely on Binance as their preferred trading platform.

It was explained to me that Binance entered Africa around 2018 and established Binance Labs. There was latent interest, but no intention to expand. Over time, Binance realized that Africans wanted exposure to stablecoins, and Africa became an important market for the company. I saw some locals wearing Binance clothes, but they had never worked for the company.

The rise of USDT seems coincidental to me. In 2018, the stablecoin market had no competitors, and Africa seemed to follow the broader market trend at the time, with USDT overtaking Bitcoin as the most liquid and most traded asset. I wish I had asked more questions about why I prefer USDT to USDC.

Cryptocurrencies represent an easy way to acquire stablecoins

The rise of stablecoins cannot be underestimated. From an African perspective, stablecoins represent the most important innovation.

It conveniently gives Africans access to the dollar:

• Africans can bypass the local black market.

• Africans no longer have to deal with the real dangers associated with the black market.

• Africans can exchange at wider market rates.

What’s more, there’s no need to hide dollars under the mattress anymore, it’s all digital. Of course, the work required to achieve stablecoin adoption won’t be easy.

Some readers may be thinking: “Well, if I can represent USD as an on-chain asset, then problem solved!”.

This is the first step to solving the problem. The broader issue is the creation of an online marketplace that can facilitate a liquid market between stablecoins and local currencies. The market must be able to exchange on a large scale with as little price slippage as possible.

Why is this a real challenge? African countries have about 42 currencies. We need to cultivate a liquid market that can facilitate the exchange between all local currencies and stablecoins. This requires the combined efforts of many local actors to achieve.

Thankfully, cryptocurrency systems are great at allowing participants to work together and provide liquidity to assets when they are really needed.

So far this is working well in Kenya and Nigeria. I dont have the data to confirm that this holds true for all 42 currencies in Africa.

Why Choose Stablecoins? Instead of encrypted assets?

It may come as a surprise to many, but the local currencies of African countries are depreciating very quickly relative to the US dollar. Some currencies, such as Zimbabwes, failed due to hyperinflation.

For example, since 2008:

• The Nigerian naira has lost 7/8 of its value against the US dollar.

• The Kenyan shilling has lost 50% of its value against the US dollar.

The depreciation of the Kenyan shilling is significant because during the same period from 2008 to 2023, Kenyas GDP tripled. Despite the economic growth, the currency continued to lose value. Confidence in the economy has increased, but not in the local currency.

There is no doubt that large swathes of the population in Kenya and Nigeria still live in absolute poverty.

For Westerners, especially the British, the idea of ​​poverty is living in an apartment on social security (welfare) payments. Families do struggle to put food on the table, but they have a roof over their head and access to health care. If you consider homeless people, there are approximately 271,000 people in the UK, which is 0.4% of the total population (approximately 67 million people).

An estimated 60% of Nairobis population lives in slums. Furthermore, the World Bank estimates that about 50% of the population of Nigeria and Kenya live in slums.

In a slum, an entire family may live in one room (a studio). Outside their home is a narrow corridor that connects them to the main road. As we experienced, sewage flowed through these narrow corridors like a race track filled with obstacles. Many people live on less than $1 a day and have few social benefits.

This is why the following statements are out of touch with reality for Africans, especially those living in slums.

• “The real win is helping people understand why Bitcoin is the best long-term savings asset.”

I dont like to criticize the above comment, but it is out of touch with real world situations and the realities local people face.

I believe locals are happy to have long-term savings goals, but they urgently need to address immediate expenses. For example, a landlord might pay a group of young people $10 to threaten a tenant into paying their rent if they cant pay their bills for any reason.

Surprisingly, there are still landlords in the slums.

I dont believe that stablecoins help people living in slums. The solution is to create better market conditions for local people to accumulate wealth, build better infrastructure and get out of slums. I can understand that individuals may seek to work online and receive payment through a cryptocurrency system, but for many people living under these conditions, this is not a ready-made solution.

In other words, cryptocurrency systems are not yet relevant outside of exceptional circumstances for about 50% of the population in Nigeria or Kenya.

Africans using stablecoins do not live in slums. I imagine they have achieved some form of financial stability and are able to cover their near-term expenses.

The dollar is losing its spending power over time and we should keep all our savings in native crypto assets, this crypto meme means little to them because its a foreign concept.

The opposite is the case in Africa. The purchasing power of the dollar only rises relative to their own local currencies. Holding U.S. dollars is a safer option than holding crypto assets in your country.

For Africans, the dollar is very stable, which is why stablecoins have found product market fit among them.

Demographics attending the conference include:

• community leaders,

• software developer,

• Startup founder.

Desire to succeed in a context of discrimination and mistrust

The following questions and answers are sourced from meetups in Nigeria.

Who has questions about online payment providers like PayPal?

Everyone in the audience raised their hands and laughed at each other.

In Africa (especially Nigeria), IP addresses are often locked out of service because they are considered suspicious by online service providers. Some of us were also locked out of our own accounts.

The end result: Africans are excluded from the services provided by global fintech companies that we take for granted in the West.

Who has questions about KYC?

We are told about 70% of Nigerians do not have passports.

The Nigerian government created a scheme called the National Identification Number (NIN) for identification and KYC purposes, but it has been embroiled in problems and delays.

On the other hand, the Central Bank of Nigeria runs an independent identity verification process called the Bank Verification Number (BVN). It acts as the users unique identifier across all banking services. Only 25% of Nigerias population (57 million people) is registered with the number.

Identity remains a conundrum in Nigeria. This will affect the ability of companies to meet compliance requirements before sending funds to Nigerians. Whether cryptocurrency or otherwise, this identity issue needs to be addressed within a regulatory framework.

Who ever missed an opportunity by not trusting you?

This time no one laughed. Everyone raised their hands, which was infuriating.

If the reader can only get one perspective, I believe this is why blockchain technology, and especially Rollup as a technology stack, is so important to our colleagues in Africa. It reduces the power dynamics between users and operators, enabling parties who wish to transact but harbor mutual distrust to do so in a secure manner.

In other words, it allows users to:

• Lock your funds into your carrier’s services,

• interact with services,

• End up withdrawing funds from the service without trusting the service operator.

Our ability to define, measure and reduce trust in financial interactions is what makes the crypto space so special. Ive always called this the field of trust engineering.

I hope that one day the technology stack will bring the benefits of scale to our colleagues.

Lets transact on their platform, pay for their services, and most importantly, without worrying about who they are or where they live.

What is the one thing we should tell Westerners about Nigerians?

Some comments from one participant and others shed some light on this issue. I summarize the key points below:

"Nigerians are particularly hungry for opportunity. They are motivated by incentives. Design the right incentive program and Nigerians will join. Nigerians learn everything they know from the internet. Give them a Nokia 3310 phone and they will use it as a vehicle to get somewhere.

They want to escape their local environment, work online and join a global workforce. They see blockchain as the great equalizer. Enable them to be rewarded in terms of ability rather than location.

In Africa, less money is needed for projects to succeed. In the US/Europe you get 1 point per dollar spent, but in Africa you get 1000 points.

as well as:

If there are Nigerians in the project, then there is money to be made. If there are no Nigerians, be careful. - Local Kenyan

I laughed about it, but it really shows how eager they are to pursue success.

Web3 Bridge

Please take a moment to imagine this:

• To learn Web3, you left your family and friends for 16 weeks, traveled thousands of kilometers, and lived with 40 other people (in bunk beds and bunk beds).

• Hoping for a life-changing opportunity.

• This opportunity is to work online, earn based on ability, and not be discriminated against based on your location.

This is Web3 Bridge.

Web3 Bridge is an educational project running free since 2019.

The project attracts Web2 developers and aspiring programmers who want to learn how to get started in the Web3 industry.

We met one woman who left her husband and three children at home to attend the program. I imagined there were many others in that room facing similar dilemmas, and the courage of being away from a loved one for an extended period of time cannot be underestimated.

The courses and topics covered are also impressive. It starts with basic concepts like what a blockchain is, to implementing your first Solidity (or Cairo) smart contract, to learning full-stack technologies for implementing a Web3 application.

Again, the entire program is free to attend, whether in person or online. We understand that the continued existence of Web3 Bridge relies on grants and personal investment (time and money) from the founders.

Currently, the physical facility consists of several houses, but founder Ayo tells us about his dream. He wanted to buy nearby land and open a larger campus. With a larger physical space, he can increase the student body and teach hundreds of developers at a time.

I sincerely hope his vision comes to fruition and the crypto community should consider how to support Web3 Bridge.

What will the future hold?

During the nine days I visited Kenya and Nigeria, I gained some valuable insights that led me to some important conclusions about the future - for their workforces, the possible role of cryptocurrencies, and whether we (the West) can support their growth.

Africa is uniquely positioned to succeed

in my opinion:

• Africans and Europeans share the same time zone,

• They speak European languages ​​fluently, especially English and French,

• They have a strong desire to succeed and are eager to create wealth.

Africans are well positioned to compete online.

In the digital realm, it may not matter whether workers are in Europe or Africa if workers in a specific time zone are required and they are able to communicate in the same language.

For me, the overall goal of helping Africans succeed is:

• Providing better cryptocurrency infrastructure and a reliable way to hire and pay Africans,

• Reduce the key differences that distinguish Africans from Europeans in online communities,

• Enable African developers to leverage cryptocurrencies as part of their software stack and remove the role of trust service operators.

Long term: The two communities, Africans and Europeans, should become indistinguishable in the digital realm.

Only in this way will Africans be able to earn income mainly based on their own abilities rather than their geographical location.

Africans understand cryptocurrencies

Thanks to the internet and online communities, Africans are not isolated from the Ethereum community. We met the following teams and individuals:

• The team that is building the Arbitrum project,

• Participated in the ETHGlobal Hackathon and won rewards,

• Learn how to implement Cairo smart contracts on StarkNet.

• Learn about Optimism’s retrospective funding,

• Eager to learn zero-knowledge proofs.

Africans don’t need us in the West to visit them and preach why they should care about Ethereum or the broader cryptocurrency ecosystem.

They have a huge NFT community.

Africans are already interested in cryptocurrencies, and the number of people keen is growing steadily.

How can we help Africa?

Africans don’t need our help when it comes to understanding how to use cryptocurrencies. If anything, we need their help to demonstrate use cases.

As this article outlines, the ease with which Africans can use cryptocurrencies to obtain U.S. dollars helps validate all the technology we are building. This provides indisputable evidence that the cryptocurrency has product market fit and that many people rely on it.

On the other hand, we need to better understand the challenges Africans face before they can participate in the online economy and launch their own cryptocurrency projects. Some challenges include:

• Lack of government support.

Kenya has no cryptocurrency laws, but the government just seized WorldCoin’s hardware, saying it failed to disclose its true intentions. Nigeria prohibits banks from participating, but individuals can use it.

• Virtually no venture capital exists.

Angel investing is possible but very rare. Identity issues make legal compliance difficult and can hinder raising funds.

• There is no time to create.

The desire to succeed has Africans very focused on building the next product. They don’t have the free time to simply tinker with technology for fun, which can impact their ability to come up with innovative new ideas.

• global view.

There is a misunderstanding in the West about the capabilities and real needs of Africans. Africans can demonstrate their capabilities and value, but it takes all of us to amplify it.

Grant Programs in Africa

The solution that comes up time and time again is the need for an Africa-focused grant program. Regarding the grant program, I would like to make a few comments that are relevant for any program (not just one focused on Africa):

• Grants should be given to projects and individuals who need to drive progress,

• Grants should be awarded to individuals who might benefit from tinkering with time and better understanding research-oriented ideas,

• Grants can reduce pre-seed risk for venture capital firms,

• Grants should not be viewed as a long-term funding source, as it is easy to continue funding projects that should fail,

• Grants should only be awarded if the grant recipient has unambiguous proof of employment.

• Grants can be used to foster the environment, connect developers and grow a community where knowledge can be shared with each other.

Any grant program designed to work in Africa, or any geographic location, needs local leaders to run it. Grant managers can get paid to review and authorize grants. This could very well be a full-time role.

Most, even prominent local leaders, have no experience running or participating in grant programs. Like any system, its best to start small and build up over time. It would be best not to hand over very large funding pools to entirely new grant programs. Grant managers should have time to earn a reputation for the money they manage and demonstrate the impact of grants.

Grants dont solve local problems, especially in Africa. Funds are limited and can be easily depleted. Be cautious in the use of funds. Grants should be reserved for the most promising groups and individuals to advance their projects. Its free money, but it shouldnt be widely available.

For me, Uniswap is one of the biggest success stories. Founder Hayden received a $50,000 grant from the Ethereum Foundation to pay for the audit. That was enough to pay for audits, drive progress, and make Uniswap, the tech giant it is today.

Driving progress doesn’t require huge amounts of money. less is more.

In the end, there are two issues that hinder the success of any grant program.

• Grants may not be available to Africans if they cannot comply with KYC/AML rules.

• A local venture capital network needs to emerge that can later fund any success stories.

Both of these issues are structural and infrastructural issues that go beyond cryptocurrencies. Especially with VC networks, you need ex-founders who are willing to invest and help new cohorts of founders build large sustainable companies.

on-site education

One thing that is lacking in Africa, but abundant in the West, is on-site education.

In the West, there are tons of workshops, summer and winter schools to attend and learn the core technologies that drive cryptocurrencies. Whats more, many educational activities are free.

Sadly, many Africans face restrictions when participating in cryptocurrency-related activities.

Many Africans lack passports, and even if they do, the need for visas and the potential burden of travel costs pose considerable challenges.

They cannot come to us in person.

As an experiment, Ye Zhang and I held developer workshops in both Kenya and Nigeria.

To our surprise, many software developers showed up, and an unexpected number. They asked a lot of good technical questions. Africa has a large pool of skilled developers looking to learn Ethereum’s core infrastructure, as well as novel topics like zero-knowledge proofs.

To date, they have relied entirely on the internet to learn, but face-to-face with world experts is the best. Not only from a learning point of view, but also to get inspired to pursue a subject, as experts tend to love their subject and this intellectual love is contagious.

This brings me to the next step: We dont really need a conference to pitch and market new Web3 projects to Africans. People are eager to share knowledge and learn.

Our greatest contribution to Africans is organizing and running a live educational program. Its like a summer school - experts are invited to teach technical topics.

final conclusion

There are several key points in the above article:

• Cryptocurrency payments have become a convenient method for acquiring dollars.

• Binance is popular in Africa due to its early expansion and promotion of peer-to-peer markets.

• Africans want income based on ability rather than location, and they have the tenacity to pursue it.

• The long-term goal should be to reduce the digital differences between Europeans and Africans.

• Africans face many challenges, including a lack of regulatory support, the inability to travel, difficulty complying with KYC/AML regulations, little to no venture capital network, and little time to try new ideas.

• What’s more, almost all Nigerians raise their hands and admit that they lost opportunities because people didn’t trust them.

• Web3 Bridges education program is doing important work, and the next step is for Occidental to help deliver summer schools in person.

One impact of our visits is helping communities connect. Many participants did not know each other, especially the developers. It sounds like some local community leaders will try to continue organizing more events. As our visits increase, we hope to help local leaders build a greater community.

There are two final topics I want to discuss.

Africans love life. While weve only been to Nigeria and Kenya, weve also met Africans from Uganda, Ghana, and other countries. They joke happily, like Nigerians are very dramatic, or they go to Ghana when they need to relax.

The locals were more than happy to teach me some interesting words like Mubaba, Alagba, msoupa, which are all compliments for men and women. I said those words at every opportunity and most of the time they laughed, especially the Kenyans. They even told me that East Africans have rounded foreheads while West Africans have flat foreheads.

As a programmer, its easy to focus on the broader system and try to evaluate how to fix it for the benefit of everyone. However, we must not forget that at the heart of this system are people. Its always worth taking the time to learn about their customs, their humor, and fully appreciate what they gave up just to be able to enter the same room as the rest of us.

What is Africa?

One of the compelling aspects of Africa is its immense cultural richness and how it affects Africans perceptions of the continent.

In West Africa, a Schengen-like agreement exists that allows visa-free travel between several countries. However, traveling from East Africa to West Africa (and vice versa) is uncommon and difficult. This requires a visa, is financially costly, and takes time. For example, the flight time from Lagos to Nairobi is about 5 hours, and the return airfare can exceed $600.

I noticed that East and West Africa mutually recognized each other as an important part of African identity. On the other hand, they do not consider South Africa or North Africa to be African by the same criteria. South Africa is considered more European, while North Africa is more Islamic.

This sentiment is reflected in the fact that at least none of the people I asked had been to Algeria or expressed any desire to go there. Its funny because my stepfather grew up in Algeria and he very much considers himself African. I dont have a good opinion on this. I imagine it has something to do with cultural differences and Africas colonial history.