Maybe if corruption wasn’t such a big problem who knows.
Also china kinda destroyed Africa dream of industrialization there is not enough demand for another big industrial powerhouse
We need the hitchhikers guide equivalent with mice being a super race applied here. Every charity I see out there has photos of African children and women. I expect in the unknown future that Africa is the wealthiest continent because of all the donations they got over the centuries, and everyone else is poor.
1. Financial Inclusion:
Many Africans lack access to traditional banking services. Bitcoin provides an alternative financial system that is accessible to anyone with a smartphone, enabling people to participate in the global economy without needing a bank account.
2. Remittances:
Bitcoin facilitates cheaper and faster international remittances. Traditional remittance services often charge high fees and take several days to process. Bitcoin transactions are generally quicker and can be less expensive, helping migrants send money back home more efficiently.
3. Inflation Hedge:
In countries with high inflation rates and unstable currencies, Bitcoin can serve as a store of value. People can convert their local currency to Bitcoin to protect their savings from devaluation.
4. Reverse Income Inequality:
Income inequality is often tied with inflation. A hard asset like Bitcoin would help to distribute some wealth.
For all of these reasons, many Africans are already investing in Bitcoin. Bitcoin as a capital asset will help fund infrastructure/education etc
why, for those with a smartphone, wouldn't they just log into citibank.com or whatever, instead of a bitcoin blockchain app?
There's nothing inexpensive about bitcoin, in the big picture. you seem to only be hoping that the organizations running the electricity into servers are providing free or super cheap banking to users, i.e., they're eating the massive expense of bitcoin over, say, hosting MySQL on trhifty digital ocean or azure or aws. is that correct understanding of what you mean?
How is bitcoin a hard asset?
> many Africans are already investing in Bitcoin.
do you have a citation for that assertion? i have not found one.
1. Africans already use mobile banking services that don't even need a smartphone, via USSD[0]. This started almost 20 years ago[1]. Once you have a smartphone you can use loads of different banks, so you don't need Bitcoin for that.
2. This is probably true, yes.
3 and 4 - they seem to be the same point. Other currencies such as USD or GBP might be better value stores, given their relative security. But people in poverty aren't going to be buying Bitcoin or pounds, and if they are it's a gamble. Maybe middle classes, or people with mid-level government jobs who already have their Audi Q7, might a bit, it's true. But that's not a pro-poverty scenario.
Some off the cuff counterpoints are:
1. Getting your money out may be a problem. Banks are insured up to a value.
2. Where's my wallet? Just on my smartphone? In that case, if it breaks or I lose it, or it's stolen, I lose my money? Or in an exchange? In that case, it's not my coins, and any of numerous well-known failures[2] might mean I lose them forever.
3. And a meta point: people who like Bitcoin own Bitcoin. It's like talking to someone in a pyramid scheme. Of course Herbalife is the best way to lose weight. Of course Amway make the best cleaning products, Jeremy.
As I understand it: 1 and 2 are already done with phone minutes in many, many parts of the African continent. Should phone minutes be currency? probably not, but arguably it's better than Bitcoin, at least the value is easy to understand.
With bitcoin's volatility I'm not sure how you can believe #3 is even remotely true.
Bitcoin is a hard asset? What exactly is your definition of "Hard Asset"? As I think we are talking about very, very different things. Here is my definition for comparison: A hard asset refers to a tangible asset or resource with fundamental value. Think productive farm animals, vehicles, things of that nature.
Yeah, sure. Rule of the Law and respect for private property lead to prosperity. We get it.
But in Africa, Latin America and many parts of Asia no one else gets it. The people love their authoritarian thieves, from Mugabe to Bolsonaro, from Maduro to Zuma.
And don't ideologize this. In those places, the right is as corrupt and parasitic as the left.
Man oh man, I couldn't agree more. I've been living in Zambia for the last 3 years trying to start an export business. What a nightmare.
I laughed out loud when I read "e-government". The sad truth is countries like Zambia are just not equipped or capable of running anything "e". I am forced to use Zambia's Electronic Single Window (https://zesw.gov.zm/zesw/). What an absolute shambles, a total failure. If you don't know the right individuals in the right departments you're getting nowhere.
From my limited experience the problem is centuries of poor to no education and such an extreme level of poverty that individuals are constantly in survival mode. How can I make it through the next day/week/month vs. family, financial and career planning.
So, if we can wave a "give Africa what it needs" wand, I wouldn't suggest Startup Cities, Cryptocurrencies & E-Governments, rather good quality education, healthcare and just enough financial security to exit survival mode. If you can hand that to Zambia (without the corruption that is there now), you'd likely see a nation flourish and carve their own path to success, probably without "startup cities" too.
P.S. Zambia has Special Economic Zones: https://www.lsmfez.co.zm/. They're fine for large conglomerates who want to save a few kwacha in taxes but are mostly useless to all other small business owners.
If you look at Western Europe + the "Anglosphere" ex-colonies, there's a long history of how laws and attitudes evolved in such a way as to virtually guarantee rule of law, individual rights, democracy, property rights, and people doing their jobs with genuine effort and in good faith.
For whatever reason, it's been incredibly deeply ingrained into people here in the West - over millennia - to expect these things from and for themselves.
But in Africa, I don't know why, you just don't have all these ingredients. And so you can give it every resource and all the infrastructure and investment, but I don't think you can easily send the true source of wealth from one society to another one.
It's at least 1000x times easier to do business in North America than in Africa. Instead of getting stymied at every turn by some new idiotic stumbling block, the whole system here pulls in the right direction.
There are lots of metrics that are improving incredibly well for Africa, and maybe this is the start of an upward spiral. I certainly hope so - that continent badly needs a couple of centuries of extreme prosperity growth.
In many African countries there were trains and railways. After colonizers left, railway gradually fell into disrepair and cease to be used. So I don't think that roads are the answer.
An important piece of context here: Palladium is funded by Peter Thiel, whose particular community of reactionary-cum-libertarian sovereign citizen types has frequently sought friendly (meaning pliable) host nations for experiments in autonomy.
Given that, it's hard to separate the economics here from a pseudo-colonial approach to investing, in which Thiel-type ultrawealthy individuals get their own banana republics in Africa.
If you don't put energy and infrastructure first, nothing else will follow. This raises an immediate issue: Western economies are still largely fossil-fuel-reliant and there is no way Africa can start burning fossil fuels at the rate the USA does. Ignoring the pollution and climate aspects, there simply isn't enough fossil fuel production for that scenario.
This means step one - securing the energy needed to support infrastructure and industrialization - must involve a renewable-centric approach, and given that Africa is centered around the equator, that means mainly solar (plus some wind and of course storage). The only country with the capacity to provide solar PV at scale is China, as they've mastered monocrystalline silicon PV production. This is already happening (June 2023):
Once the energy infrastucture is in place, everything else follows from that. Water can then be pumped long distances or from aquifers to combat intermittent drought conditions; railroads can be built to move goods long distances efficiently, and factories for conversion of raw materials to manufactured goods for export, aka moving up the value chain, can be built. Similarly, malaria was defeated in the USA because of infrastructure, not by genetically engineered mosquitos or similar schemes - malaria is a solved problem.
This article doesn't even mention the energy issue, it just trots out some revamped version of what, cheap labor in economic zones controlled by foreign investors? And we don't need to educate that labor for the simple tasks they will be given? Listen to this:
> "The belief that increasing educational provision is the key to unlocking prosperity in Africa is therefore incorrect. African economies instead need market opportunities to make use of their abundant human capital..."
I think that used to be called the African slave trade... so what's the author saying, instead of exporting slaves to the West they can just move the sweatshop factories to Africa, now that China is off the table for the neoliberal outsourcing program?
Those come after fixing corruption. Roads and energy are important, but a road isn't going to help if bandits take everything you try to move on the road.
Zambia has had almost 100% renewable energy for a very long time. It's only recently with more extreme weather patterns that energy consistency is becoming an issue. We've been exporting electricity for decades.
Despite that the country has remained incredibly poor and continues to circle the drain.
So I'd suggest, "they don't need X they need Y", is always going to be wrong because what is really needed is a blend of everything deployed in a very specific order depending on the country.
If you want to have an industrial-scale civilization, well, 100% renewable might sound good but the scale is not enough for factories and modern infrastructure needs. Compare and contrast the average usage in Zambia vs. the USA, per person:
per capita Zambia = 669.89 kWh
per capita USA = 11,695.27 kWh
Now the USA isn't the most efficient user of electricity (probably the least), but still, asking the US economy to function with only 1/20th the normal energy use? Implausible at best.
Rory Stewart, a well known British politician turned pundit, often talks compellingly about how giving money directly to women is the way to lift countries out of poverty.
Actually, it doesn't work at all. It just allows Westerners with a new "development program" to conduct yet another experiment likely to end in failure.
Your comment on theft is spot on. The entire system starts and ends at strong rule of law coupled with a strong societal contract with private property. You don't have that in most of Africa. Even in the places the article mentions, it's hit or miss in practice. Giving money to women, or men, or children, or 3 legged camels with purple polka dots won't amount to a hill of beans without at least those two pillars in place.
And if those pillars are in place, and truly functional, giving away money won't work in any case. As doing so would make that nation dependent on your currency. Chinese, American or European. It's no coincidence that none of the ideas presented by "development experts" ever involve ideas that would make a sub-saharan African nation dependent only on itself, or other sub-saharan African nations. Where costs of trading have a chance in Hades of going down.
The cost of delivering a truck from the US or China is enormous. The only real way to bring that down is to manufacture it in sub-saharan Africa, and then drive it where it is needed. Anything less is just maintaining a steady flow of money and resources out of these nations.
>Your comment on theft is spot on. The entire system starts and ends at strong rule of law coupled with a strong societal contract with private property.
Agreed. Yesterday I saw the question posed: "What is more important, property rights or human rights?" I decided that property rights is more important because, as you said, strong rule of law gives people confidence in building a societal contract with others that includes things like freedom of speech. That's what happened in Western civilization.
I mean I suppose you could have said something like "property rights are human rights" but then you'll just get the follow-up question "what is more important, the human rights that are property rights, or all other human rights?"
That said, even if you take as a given that property rights enable those other rights (certainly a contentious claim), it still seems like you're missing the point of the question. If you value the right of a person not to be murdered, more than you value the right of a person to own a factory and to pay people to work in it, you should just say so.
28 comments
[ 2.7 ms ] story [ 69.3 ms ] thread2. Remittances: Bitcoin facilitates cheaper and faster international remittances. Traditional remittance services often charge high fees and take several days to process. Bitcoin transactions are generally quicker and can be less expensive, helping migrants send money back home more efficiently.
3. Inflation Hedge: In countries with high inflation rates and unstable currencies, Bitcoin can serve as a store of value. People can convert their local currency to Bitcoin to protect their savings from devaluation.
4. Reverse Income Inequality: Income inequality is often tied with inflation. A hard asset like Bitcoin would help to distribute some wealth.
For all of these reasons, many Africans are already investing in Bitcoin. Bitcoin as a capital asset will help fund infrastructure/education etc
why, for those with a smartphone, wouldn't they just log into citibank.com or whatever, instead of a bitcoin blockchain app?
There's nothing inexpensive about bitcoin, in the big picture. you seem to only be hoping that the organizations running the electricity into servers are providing free or super cheap banking to users, i.e., they're eating the massive expense of bitcoin over, say, hosting MySQL on trhifty digital ocean or azure or aws. is that correct understanding of what you mean?
How is bitcoin a hard asset?
> many Africans are already investing in Bitcoin.
do you have a citation for that assertion? i have not found one.
1. Africans already use mobile banking services that don't even need a smartphone, via USSD[0]. This started almost 20 years ago[1]. Once you have a smartphone you can use loads of different banks, so you don't need Bitcoin for that.
2. This is probably true, yes.
3 and 4 - they seem to be the same point. Other currencies such as USD or GBP might be better value stores, given their relative security. But people in poverty aren't going to be buying Bitcoin or pounds, and if they are it's a gamble. Maybe middle classes, or people with mid-level government jobs who already have their Audi Q7, might a bit, it's true. But that's not a pro-poverty scenario.
Some off the cuff counterpoints are:
1. Getting your money out may be a problem. Banks are insured up to a value.
2. Where's my wallet? Just on my smartphone? In that case, if it breaks or I lose it, or it's stolen, I lose my money? Or in an exchange? In that case, it's not my coins, and any of numerous well-known failures[2] might mean I lose them forever.
3. And a meta point: people who like Bitcoin own Bitcoin. It's like talking to someone in a pyramid scheme. Of course Herbalife is the best way to lose weight. Of course Amway make the best cleaning products, Jeremy.
[0] https://en.wikipedia.org/wiki/Unstructured_Supplementary_Ser...
[1] https://en.wikipedia.org/wiki/M-Pesa
[2] https://www.bbc.co.uk/news/business-63704034
With bitcoin's volatility I'm not sure how you can believe #3 is even remotely true.
Bitcoin is a hard asset? What exactly is your definition of "Hard Asset"? As I think we are talking about very, very different things. Here is my definition for comparison: A hard asset refers to a tangible asset or resource with fundamental value. Think productive farm animals, vehicles, things of that nature.
But in Africa, Latin America and many parts of Asia no one else gets it. The people love their authoritarian thieves, from Mugabe to Bolsonaro, from Maduro to Zuma.
And don't ideologize this. In those places, the right is as corrupt and parasitic as the left.
I laughed out loud when I read "e-government". The sad truth is countries like Zambia are just not equipped or capable of running anything "e". I am forced to use Zambia's Electronic Single Window (https://zesw.gov.zm/zesw/). What an absolute shambles, a total failure. If you don't know the right individuals in the right departments you're getting nowhere.
From my limited experience the problem is centuries of poor to no education and such an extreme level of poverty that individuals are constantly in survival mode. How can I make it through the next day/week/month vs. family, financial and career planning.
So, if we can wave a "give Africa what it needs" wand, I wouldn't suggest Startup Cities, Cryptocurrencies & E-Governments, rather good quality education, healthcare and just enough financial security to exit survival mode. If you can hand that to Zambia (without the corruption that is there now), you'd likely see a nation flourish and carve their own path to success, probably without "startup cities" too.
P.S. Zambia has Special Economic Zones: https://www.lsmfez.co.zm/. They're fine for large conglomerates who want to save a few kwacha in taxes but are mostly useless to all other small business owners.
If you look at Western Europe + the "Anglosphere" ex-colonies, there's a long history of how laws and attitudes evolved in such a way as to virtually guarantee rule of law, individual rights, democracy, property rights, and people doing their jobs with genuine effort and in good faith.
For whatever reason, it's been incredibly deeply ingrained into people here in the West - over millennia - to expect these things from and for themselves.
But in Africa, I don't know why, you just don't have all these ingredients. And so you can give it every resource and all the infrastructure and investment, but I don't think you can easily send the true source of wealth from one society to another one.
It's at least 1000x times easier to do business in North America than in Africa. Instead of getting stymied at every turn by some new idiotic stumbling block, the whole system here pulls in the right direction.
There are lots of metrics that are improving incredibly well for Africa, and maybe this is the start of an upward spiral. I certainly hope so - that continent badly needs a couple of centuries of extreme prosperity growth.
Infrastructure in general.
Recent history of Zimbabwe <http://imgur.com/a/VdQdD>
Given that, it's hard to separate the economics here from a pseudo-colonial approach to investing, in which Thiel-type ultrawealthy individuals get their own banana republics in Africa.
This means step one - securing the energy needed to support infrastructure and industrialization - must involve a renewable-centric approach, and given that Africa is centered around the equator, that means mainly solar (plus some wind and of course storage). The only country with the capacity to provide solar PV at scale is China, as they've mastered monocrystalline silicon PV production. This is already happening (June 2023):
https://www.pv-tech.org/china-offers-66gw-of-solar-infrastru...
Once the energy infrastucture is in place, everything else follows from that. Water can then be pumped long distances or from aquifers to combat intermittent drought conditions; railroads can be built to move goods long distances efficiently, and factories for conversion of raw materials to manufactured goods for export, aka moving up the value chain, can be built. Similarly, malaria was defeated in the USA because of infrastructure, not by genetically engineered mosquitos or similar schemes - malaria is a solved problem.
This article doesn't even mention the energy issue, it just trots out some revamped version of what, cheap labor in economic zones controlled by foreign investors? And we don't need to educate that labor for the simple tasks they will be given? Listen to this:
> "The belief that increasing educational provision is the key to unlocking prosperity in Africa is therefore incorrect. African economies instead need market opportunities to make use of their abundant human capital..."
I think that used to be called the African slave trade... so what's the author saying, instead of exporting slaves to the West they can just move the sweatshop factories to Africa, now that China is off the table for the neoliberal outsourcing program?
Despite that the country has remained incredibly poor and continues to circle the drain.
So I'd suggest, "they don't need X they need Y", is always going to be wrong because what is really needed is a blend of everything deployed in a very specific order depending on the country.
per capita Zambia = 669.89 kWh
per capita USA = 11,695.27 kWh
Now the USA isn't the most efficient user of electricity (probably the least), but still, asking the US economy to function with only 1/20th the normal energy use? Implausible at best.
The charity he is involved in: https://www.givedirectly.org/team/rory-stewart/
Your comment on theft is spot on. The entire system starts and ends at strong rule of law coupled with a strong societal contract with private property. You don't have that in most of Africa. Even in the places the article mentions, it's hit or miss in practice. Giving money to women, or men, or children, or 3 legged camels with purple polka dots won't amount to a hill of beans without at least those two pillars in place.
And if those pillars are in place, and truly functional, giving away money won't work in any case. As doing so would make that nation dependent on your currency. Chinese, American or European. It's no coincidence that none of the ideas presented by "development experts" ever involve ideas that would make a sub-saharan African nation dependent only on itself, or other sub-saharan African nations. Where costs of trading have a chance in Hades of going down.
The cost of delivering a truck from the US or China is enormous. The only real way to bring that down is to manufacture it in sub-saharan Africa, and then drive it where it is needed. Anything less is just maintaining a steady flow of money and resources out of these nations.
Agreed. Yesterday I saw the question posed: "What is more important, property rights or human rights?" I decided that property rights is more important because, as you said, strong rule of law gives people confidence in building a societal contract with others that includes things like freedom of speech. That's what happened in Western civilization.
That said, even if you take as a given that property rights enable those other rights (certainly a contentious claim), it still seems like you're missing the point of the question. If you value the right of a person not to be murdered, more than you value the right of a person to own a factory and to pay people to work in it, you should just say so.