Business / #ForbesBusiness

July 9, 2018,   5:08 PM

Moving To Marrakesh: Why The Blockchain Summit At Richard Branson's Private Island Moved To Africa

Michael del Castillo


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In the aftermath of Hurricane Irma, the leaders behind the Blockchain Summit normally hosted at Richard Branson's own personal, Necker Island, saw an opportunity. The category five storm that last year destroyed the retreat and thousands of private residences forced the event's co-hosts to re-evaluate its setting, and they wanted to do so with a sense of purpose.

In spite of a number of real-world results that have emerged from the conference, including the creation of the Blockchain Alliance, now including 36 government agencies and the Global Blockchain Business Council with members from 35 countries, the gathering has become an easy target on social media for the perception that it is little more than a vacation for the well-to-do.

So, in this, the fourth year of the event, the man who came up with the concept in the first place, investor Bill Tai, wanted to create a new layer of meaning, beyond just getting together a number of thought leaders and seeing how they could use the technology first made popular by bitcoin to bring new efficiencies to a wide range of industries.

In addition to gathering participants, including Google co-founder Sergey Brin and Kenya cabinet secretary Joseph Mucheru, Tai invited about 30 total speakers to Richard Branson’s Kasbah Tamadot in Marrakesh, Morocco to talk about the business of building blockchain in Africa.

“The whole continent is a bit of an unknown to a lot of folks because they just don’t get much exposure to it,” said Tai, who is also the founder of the Actai Group non-profit aimed at bringing together groups of leaders for social good. “I think getting a lot of people together that are knowledgeable, with reach, and high profile, that collectively can form a view about what are the opportunities at hand can both serve philanthropic and commercial interests.”

Helping lead the shift in focus to using blockchain as a way to more deeply connect the rest of the world's finances to Africa is Tai himself, who in addition to being an early investor in the event's co-hosts, blockchain firm, Bitfury Group, is expected to make a series of related announcements on stage at the event.

Specifically, on July 9 Tai says he'll announce a project called Barking Dog, which is being designed to help national governments without land-titling infrastructures easily use blockchain to recognize the land their citizens own, and tokenize the assets beneath it. Inspired by economist Hernando De Soto, who used land-titling to prevent the growth of illegal crops in South America, the Barking Dog initiative is part of a larger push to register land in Africa and around the world.

Already, Ghana-based Bitland and Kenya-based Land Layby are working to use blockchain to create formally recognized infrastructures for proving land-ownership. While the problem of proving ownership maybe foreign to many in the West, the World Economic Forum estimates that 90% of Africa’s land is “completely” undocumented. More than just a real-estate issue, Tai argues that empowering people with land-ownership is a crucial component to financial independence and broader blockchain building.

“If you have a squatter versus somebody with a title, the squatter just wants to take, take, take, and then run away if the law comes,” said Tai. “If you own the land with a clear title you want to make it better, you want to improve it.”

Also expected to be announced at the event, is a unique crypto-collectible issued on the ethereum blockchain, called a CryptoKitty, that will be auctioned off to the highest bidder. Tai is currently working with a small team of developers to explore how the genetic material of endangered animals in Africa and elsewhere around the world could be associated with similar assets logged on a blockchain. In turn, those assets could be purchased by bidders, or on an open market, as a way to compensate locals who might otherwise rely on the animals for their livelihood.

Lastly, Tai’s portfolio company, Bitfury, is expected to reveal a project called Bitfury Educational Blockchain Initiative for Good in partnership with cryptocurrency advocacy firm, Coin Center, to translate the bitcoin white paper into other languages, including Swahili, spoken by 140 million people in Kenya, Mozambique, Rwanda and Somalia.

But simply giving access to the first paper to describe a blockchain to this relatively small group of people isn’t enough, according to another summit speaker, Kenyan cabinet secretary, Joseph Mucheru, whose ministry of information, communications, and technology is also a member of the Blockchain Alliance. According to Mucheru, who previously worked as the head of Google’s sub-Sahara operations, blockchain innovation needs to come within his home continent, and stay there.

The problem he sees is two-fold. First, is a swath of startups founded in Africa that are being acquired by Western nations for fractions of what they would pay for similar technology developed elsewhere. In addition to working with regulators to keep blockchain startup revenue flowing into the nation by incentivizing them to list on the Nairobi Securities Exchange, Mucheru says he wants to help more young African coders learn how to write blockchain code as a matter of preserving their culture itself.

For example, Mucheru pointed to Microsoft, which typically only targets its products to two African languages –Afrikaans and Swahili – of the thousands that are spoken on the continent, while the software giant has just as many dialects of the invented Klingon language from Star Trek. “They’re not required by law that they have to do anything for Africa, so it’s not that it’s their fault,” said Mucheru. “But if we don’t do something about it then we’re going to be completely left behind.”

One of the cryptocurrency companies Mucheru says he’s hopeful might someday go public in Kenya is Nairobi-based BitPesa, a bitcoin payments firm in which he was also an early investor. (He divested his shares when he took the government position three years ago.) Founded in 2013, BitPesa, was among the first wave of bitcoin startups, and has since grown to 70 employees, half of which are women, and 75% of which come from African nations, including Kenya, Nigeria, Ghana, Senegal, Cameroon and Uganda.

Last year, the firm raised an additional $2.5 million venture capital led by Graycroft Partners, and was generating $10 million a month, with a 25% month-over-month growth rate. Also a member of the Blockchain Alliance, BitPesa founder, Elizabeth Rossiello says it is growth like this that helped lead to the decision to move the summit to Africa.

“They’re not moving here as a favor, they’re moving here because there’s opportunity,” she said. “They’re moving here because companies have scaled here.”

But if blockchain really does ever scale in Africa, the resulting startups will eventually have to plug into the existing infrastructure and supply chains, according to Tanya Stephens, the head of P&G’s global center of excellence on blockchain. On the second day of the four-day summit, Stephens will be joining minister Mucheru, Rossiello, Senegalese musician Akon and others on a live-streamed panel about the role blockchain can play in more deeply connecting Africa’s economy with the rest of the world.

“We are seeing a bit of a shift,” said Stephens, who works in the exponential innovation division of the company that did $66.4 billion in sales last year. “We’ve done mass media for a very, very long time, and so, now there’s a shift with technologies like this that are peer to peer and we’re exploring what the potential is.”

As part of that exploration, Tai and the other event organizers built free-time into the agenda to visit the local villages, take Moroccan cooking lessons, and visit the Eve Branson Foundation in a neighboring village, dedicated to supporting education and creating job opportunities to the local Berber people.

Beyond the potential humanitarian benefits of using blockchain to help connect Africa's unbanked and underbanked to the global economy, Tai believes that the business benefits to the global community could someday rival the impact that China has had over the past decade. That is, if blockchain developers both on the continent and off are exposed to the opportunity.

“There’s a lot of energy in the blockchain segment, for sure. The question is, how do you apply it?” asked Tai. “And you’re not going to apply to areas you haven’t touched, you haven’t heard about. So, we got a lot of interesting people that have big voices and a lot of reach that can see -- hopefully, they’ll experience -- an environment where they’ll be able to gauge first hand, what are the opportunities here?"

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