Our future with blockchain: mobile payments and a spotlight on Celo
My latest pandemic pastime has been reading everything I can find on blockchain. Like many, I watched Bitcoin soar to new highs in December and became increasingly intrigued by the cryptocurrency. While I’ve been immersed in the tech sector for a while now, most of my focus has been on researching the relationship between online communication platforms and democracy.
But over the last few months I’ve delved into the world of blockchain, and what I’ve found has been riveting at every turn. This series, which I’m calling “Our future with blockchain”, aims to spotlight some of the most innovative ways I have seen this technology shaping our lives.
At its core, blockchain is a type of database that is decentralized. This means there is no unique server that hosts all transactions taking place, rather they are immediately copied across the entire chain. The benefits of this type of technology are many. For starters, it removes the need for a ‘middle man’. Consumers and sellers can interact directly without the need for an agency making the connection and in many cases, charging a fee. Another benefit of blockchain is that it creates permanent records. If an exchange takes place, anyone who has access to the chain will be able to see a record of this exchange. As if that weren’t enough, it also enables real-time tracking. By ensuring time-stamps when a product reaches a location, it allows everyone to know when and where the product was at each point in time, which has radical implications for supply chain management.
Finally, blockchain enables a more secure management of online identities and offers enormous implications for citizens to participate more freely in government affairs. I could go on listing many more innovative applications of blockchain and we will get to more of these in future posts, but I wanted to start off this series by looking into one of the ways blockchain can revolutionize lives in the developing world. I have a background in international development, so this is particularly exciting to me.
In countries with underdeveloped financial structures, high corruption rates or lack of institutional trust, blockchain cryptocurrencies offer an attractive alternative to the modern day banking system. Not to mention the fact that those issues aside, more than 1.7 billion people lack a bank account globally. While cryptocurrencies offer an attractive way for the underbanked to join the modern day financial system, accessing them is difficult for people without a computer. Blockchain networks require a lot of data and so have historically been inaccessible to people whose primary technology are cell phones because of data limits from service providers.
Enter Celo, the one and only blockchain platform that is mobile first. I recently tested out the app, which launched last fall, to see what I thought. If you’re curious, download Valora on an app store to see for yourself. The first thing I noticed was that the security protocols are no joke. If you’re new to the crypto world, you’ll soon come to find that passwords tend to be complicated, and very long. After researching how to store said long and complicated password, I started perusing the app.
If you’ve ever used Venmo or Cash app, Valora works in a fairly similar way. You can send and request money from your contacts, all for free. But what makes the Celo app Valora even more interesting to me is that you can also use it to invest in Celo cryptocurrency (called CELO). I was curious, so I purchased $20 worth, meaning I own 6.03 CELO (as of a few days ago at least).
As a relative newcomer on the app, what wasn’t immediately clear to me was whether purchasing CELO was intended to be an investment that increases in value over time, or an intermediary for people to trade between international currencies.
As I explored the website, the answer became more clear and that is, it can be both. Like any other cryptocurrency, you can hold CELO in the hopes it increases in value over time. However, the most innovative part of all this is that anyone can propose new stable currencies pegged to their regional currencies. Meaning, the more people who use CELO, the more currencies will be available for trade, CELO being the intermediate way to make these exchanges.
This is revolutionary for those in underbanked parts of the world. Instead of opening a bank account, they can open a Celo account by downloading Valora. They can then use that account to send and receive money, either in their national currency or through CELO cryptocurrency. Because this technology is built on the blockchain there is a public record of transactions so ownership of value is acknowledged, and security systems make theft practically inconceivable (unless someone steals your aforementioned long and complicated password).
For countries whose currencies have high fluctuations, trading CELO instead of the national currency could bring more stability to financial interactions. This is particularly attractive in large parts of Africa where mobile payments are already preferred. Finally, as developers continue to build applications on the Celo network, participants will soon have access to financial services the rest of the world already has access to, such as the possibility of loans, savings, and insurance policies. In the Philippines there is already an integration between Celo and BeamAndGo, a grocery store chain that lets people use digital certificates to shop.
If you’ve ever wondered what the beginning of Web 3.0 looks like, this is it. The tides are changing and we’re starting to feel the first waves of change. But perhaps you’re in a country where lack of access to financial resources isn’t an issue. Why should you be interested in mobile first cryptocurrencies?
Like it or not, crypto is the future of finance. The earlier you jump on board, the better you will be able to navigate this system and the more returns you will see should you choose to invest. If you do decide to take the plunge, I’d recommend downloading Valora. We do everything on our phones these days, and crypto investing is quickly becoming one of these. Investing in a technology that is mobile friendly seems like a good place to start, wouldn’t you say?