The move towards blockchain is the next big step in technical innovation, following the mass adoption of the internet and mobile technologies. And arguably the biggest benefit of blockchain technology is that it offers trust, says Ray Sharma, Founder/Partner of Extreme Venture Partners.
Sharma noted that there is a direct correlation between economic development and trust, which in turn has a direct impact on a country’s growth.
‘There has been a lot of hype about blockchain. There is no doubt that we still need to figure out the difference between hype and reality. But that hype has translated into massive investment. Just over 15% of global fintech investment has gone into this area.
‘Ultimately, blockchain is a ledger and in many ways, it is not dissimilar to what you have with your credit card network. So how can trust and blockchain disrupt these massive industries?
‘What it can do is allow us to disrupt the business models themselves. Trusted parties which typically stand in the middle, such as Visa, now face (a wave) of innovation and new methods.’
Disintermediation and changing the status quo via blockchain
Sharma noted that much of the financial system today is built on brokers who remain in the middle of transactions. He added that this is especially the case in sectors with high levels of asymmetric information like real estate and stock brokers.
‘What blockchain allows us to take these complicated relationships and simplify them. Although blockchain has this amazing potential, let’s not be confused and think that there will not always be a role for private systems. Healthcare is a good example.
‘Some of the most boring applications will be the ones that blockchain will actually rule the day with initially – such as supply-chain management. We can see how blockchain can be used in very simplistic applications. They may not be very sexy but they are very important. Things like real estate records are an excellent example.’
The Metaverse and interoperable systems
The concept of different virtual worlds currently exists in isolation, but the Metaverse aims to bring these together into a shared experience, said Sharma.
‘This will include interoperability between worlds, allowing users to take a character from system to system. Importantly blockchain will represent the underlying infrastructure which will allow the technology to develop around this.’
‘Before you were the user and everything was surrounding you as per your devices and however your onramp to the network. In a blockchain-powered network, things change and all these devices are interoperating just as you would see in nature in a fully-functioning environment.’
Sharma reiterated that trust is again core to this experience as users know that only is their data secure, but that anything they earn or buy in the Metaverse has that level of interoperability.
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Africa to lead the way in blockchain adoption
Sharma noted that when looking at how an economy grows, it is typically through two primary drivers: productivity growth and population growth.
He added that the African continent is in a fortunate position to benefit from both of these drivers and that the COVID pandemic has been beneficial in some ways as thousands of new startups have emerged to address the new remote-teaching world.
‘What continent is better set to benefit from even just a few of these startups working? So this is not Africa’s year or its decade. It is Africa’s century.’