Tech giant Samsung has reported its lowest quarterly profit in eight years this week an indicator to the weakened global economy to hit PC…
Our blockchain and cryptocurrency-themed Digital All-Stars piece went live some time back, as we chose several South Africans who are making a name for themselves in the cryptocurrency and blockchain space.
How did they become interested in the scene though? What about their business interests? From the Bitcoin Foundation’s Llew Claasen to The Sun Exchange’s Abraham Cambridge, we interview some of our more prominent Digital All-Stars picks.
The brainchild of Michael Deon (left) and Kyle Haffenden (right), Augmentors garnered attention after being backed via the Shark Tank TV show.
The game, a turn-based creature battling title, stands out thanks to its use of blockchain technology to deliver finite quantities of rare creatures. Deon told Memeburn how it all works.
“In most games, the players have no say about the quantity of creatures (usually it’s unlimited). For example in Pokemon, there are multiple Charmanders. In our game, players know exactly what they own and there will only be a few of some creatures, increasing their rarity.”
To fund the game, the creators opted to listen to Vinny Lingham’s advice and conduct an ICO [think of it like the crypto equivalent of an IPO – ed]. In fact, the creators say it’s the “most successful gaming ICO” ever conducted and the first ICO for South Africa.
“At that time, very few ICOs had been done globally, so we had to forge a new path which was very daunting. We spent a significant portion of our funding on this process — but that’s the risk needed to succeed in startup life. Luckily, Newtown Partners, which is Vinny’s South African VC company, helped us design the token economy, deal with any legal concerns, market the ICO to an international audience and guided us through the whole process.”
Deon adds that his interest in blockchain came about thanks to Lingham’s suggestion that they use it to create rare creatures.
GJ Van Rooyen
Custos Media Technologies combines Bitcoin and anti-piracy to great effect — not bad for a South African company at all.
Custos essentially embeds Bitcoin wallets in screener/review copies of ebooks and videos, allowing downloaders to anonymously claim the bounty and, in the process, identifying leakers.
The company was founded by GJ Van Rooyen and Fred Lutz, being spun out of the New Media Research Lab at Stellenbosch University. Lutz told Memeburn that there was a train of thought that blockchain could be used to create digital scarcity (thus curbing piracy), but they realised that this was a “futile” undertaking.
‘We realised that Bitcoin could be used to create a distributed and anonymous task-market’
“If media can be viewed by a human, it can be copied — putting it on a blockchain does not change it. If there is a strong enough incentive for the pirates to copy the content, they will find a way,” he explained. The team then turned to Bitcoin as a possible solution.
“We realised that Bitcoin could be used to create a distributed and anonymous task-market. We could collapse the task of reporting of a pirated movie and the reward for the reporting into one action, and we could do it while ensuring the person reporting the piracy of anonymity,” Lutz told us, adding that they could turn pirates against one another with a substantial reward and the promise of anonymity.
As for their biggest deals to date?
“We have recently launched with a big Japanese customer, and we are very happy to enter the Asian market, which is notoriously hard. We are in discussion with various major Hollywood players too.”
The lead maintainer of Monero, Spagni is a key driver behind the privacy-focused cryptocurrency. But he first got involved with cryptocurrency (more specifically, Bitcoin) in 2011, after reading a Slashdot article.
“I was initially interested because I thought the claims of decentralised consensus were impossible, and I spent a lot of time reading and devising attacks before coming to grips with the incentives model,” Spagni told Memeburn. “I have been, and still remain, a massive proponent of Bitcoin despite my work on Monero.”
Aside from his work as lead maintainer, Spagni says that he spends a lot of time going to conferences, covering topics such as privacy, Bitcoin and (of course) Monero.
In saying so, the Monero representative adds that apathy towards privacy is the biggest hurdle facing the fledgling cryptocurrency.
“Many people don’t understand why they would even want privacy, as they feel they aren’t doing anything ‘wrong’. Unfortunately, despite the best intentions, passive surveillance almost always sweeps up both the benign and malicious, and that’s even beyond the need for basic privacy such as your wealth not being revealed to a cashier just because you used Bitcoin.”
As we previously mentioned, Claasen was already invested in the scene (literally) before becoming the executive director at the Bitcoin Foundation. What sparked the interest in cryptocurrency and related technology though?
“We invest in technology startups and the rise in fintech startups pitching us coincided with the availability with technologies like blockchain and associated cryptocurrencies,” Claasen explained. “I’ve come to realise that decentralised protocols that enable value transfer without the need for trusted third parties completely changes economic incentives for stakeholders and we want to play an important role in rolling out these very empowering technologies.”
The Bitcoin Foundation representative consequently spends a lot of his educating and advocating for the cryptocurrency’s use. But what’s the biggest hurdle for Bitcoin and cryptocurrency in general then?
“I think there’s a lot of work that still needs to go into building out the technologies so that they become mature enough to be used at scale for use cases where the need is greatest,” he explains, adding that they also need to be more user-friendly for people who aren’t early adopters.
Decision-making is another big challenge, Claasen says, owing to the decentralised nature of it all.
“…how do you make decisions to coordinate effort, the end results of which will fundamentally affect different ecosystem players, when there is no-one in charge?”
Combine blockchain and Bitcoin with solar panels and you have The Sun Exchange. This project sees users buying solar panels and renting them out to communities and other organisations, with The Sun Exchange taking care of the administrative work.
How did founder Abraham Cambridge first become interested in cryptocurrency and the associated technology then? The Sun Exchange representative said that he first came across a New Scientist article on Bitcoin in 2009. He was also drawn to the “philosophical” nature of it all, saying that the current currency system wasn’t “sustainable” or “fair”.
“Cryptocurrency enables a democratic and secure money supply in which bad political decisions can have no impact. It is revolutionary and evolutionary. Blockchain is as disruptive and will do to the financial sector what solar energy, another decentralised and democratic breakthrough technology, is doing to the energy sector.
Cambridge also detailed his beginnings in the solar industry, saying he started a solar panel installation firm in the UK in 2008.
Cambirdge: Blockchain is as disruptive as solar energy in the energy sector
“We did some pretty innovative things such as install solar tiles 9 years before they were ‘announced’ by Tesla, and we ran a number of solar projects that were crowd-funded and collectivly owned using co-operative legal entities,” The Sun Exchange representative said. However, Cambridge made the decision to move to South Africa, owing to the “abundance” of sun.
“The only problem was that in SA there remains a very immature regulatory framework around solar energy which means that banks are not lending to businesses to go solar. Most businesses don’t want to use their working capital for that kind of infrastructure,” he continued.
Cambridge looked to Bitcoin as key to develop The Sun Exchange’s business model.
The company’s latest project saw it providing solar panels to a village in Lesotho. But how much money could someone make if they decided to chip in to the project?
“Our project partners OnePower have a very sophisticated model that factors in the demographics of the village and price elasticity to produce a range of estimates of solar energy usage,” Cambridge explains. “The outcome is that solar cell owners may earn per R225 solar cell between perhaps an 8% to a 22% effective rate of return. This is quite a range but a range that we think is still well positioned to be attractive even in a low uptake scenario.”
Before founding Bankymoon, Gamaroff spent 20 years building software for financial institutions and other sectors. The CEO said he was providing payment services to an African consumer base during this time, which made him realise the challenges faced by many citizens on the continent.
“In Africa, 80% of people are unbanked and have little or no access to the banking services that we take for granted. Mobile access is widespread but this is not improving access to banking services. Cross-border remittance costs in Africa are the highest in the world. Hyper-inflating currencies are also a reality,” Gamaroff told Memeburn.
Bitcoin was developed to solve these challenges, the CEO said, adding that he “immediately saw the value” in the tech back in 2011 and sought to develop systems around it.
Bankymoon was created to deliver “blockchain powered solutions and services”, with consulting, training and seminars also falling under its umbrella. But the company has created a few intriguing services already.
“My main focus has shifted into building out a Bitcoin payment ecosystem so that consumers can more easily acquire, hold and spend Bitcoin. I have created a new venture called Centbee which is building out this ecosystem,” Gamaroff explained. “We provide Bitcoin vouchers that can be purchased with cash over the counter at major retailers. We have a merchant payment system similar to SnapScan where customers can pay for goods and services with Bitcoin. We also offer cross-border payment solutions which are enabled through blockchain technology.”
The other noteworthy product by Bankymoon is its blockchain-enabled smart meter. Gamaroff gave an update on the initiative.
“We are building out the social crowdfunding platform so that foreign donors can directly fund the energy of needy African schools and hospitals. The project is still in its early stages and we are working with renewable energy partners to create sustainable solutions.”
Large corporate wanting to familiarise your employees with cryptocurrency and blockchain? Or maybe you just want to learn a few skills related to the field? Either way, the Blockchain Academy is one of the foremost authorities in the country.
Managing director Sonya Kuhnel is no stranger to the tech though.
“I first heard of bitcoin towards the end of 2013 via my husband introducing me to the Bitcoin Cape Town Meetup group which was only about five members at the time. I attended several of the monthly meetups and became fascinated by bitcoin and how it worked,” Kuhnel told Memeburn. “I decided to start a company called Bitcoin Payments which was an affiliate partner of BitPay, a US based bitcoin payment processor that offered merchants services to all them to accept bitcoin as a payment method on their websites.”
The Blockchain Academy representative said that, at the time, many people hadn’t heard of Bitcoin and that companies weren’t keen on the cryptocurrency as a payment option. She thereafter decided to start the Bitcoin and Blockchain Africa Conferences in 2014.
“We soon realised that there was interest in Bitcoin and blockchain technology from financial institutions and the regulators such as the Financial Intelligence Centre and South African Reserve Bank,” Kuhnel recalled. “I decided to start the Blockchain Academy in 2015 to drive education and awareness of both cryptocurrencies and blockchain technology forward in South Africa.”
The managing director also shed some light on the company’s successes.
“To date we have trained over 1000 people from countries such as India, Swaziland, Botswana, Zimbabwe, Nigeria, Kenya and Germany. We have trained many of the major financial institutions in SA as well as provided training in countries such as Zimbabwe and Swaziland. We have secured a partnership with one of the largest consulting companies in Mauritius to provide on-going training for their clients in Mauritius over the next few years.”
Despite the success, Kuhnel does elaborate on the biggest challenge for the company.
“To keep up to date with what is happening in the industry as so much is changing, with new developments, startups and innovations that it’s imperative for us to provide training that is relevant and up to date.”
Luno is one of the better known companies in the sector, offering a Bitcoin exchange as well as a full-featured wallet for Android and iOS.
Co-founder and CEO Marcus Swanepoel told Memeburn he was always interested in fintech, eventually focusing on Bitcoin.
“I think everybody who understands Bitcoin has a similar ‘aha’ moment. Something clicks when you realise that there is this great piece of technology, built on years of development and cooperation, where you can facilitate the transfer of value, without the need for a central authority,” Swanepoel said.
‘Anybody, anywhere in the world can start building things that interact with the Bitcoin ecosystem’
“What makes it even more incredible is that anyone can innovate on top of it. It is really profound: anybody, anywhere in the world can start building things that interact with the Bitcoin ecosystem, money can be sent in a matter of minutes (not days) and there’s a long list of exciting things that are yet to come.”
What’s next for Luno though?
“We have a lot of exciting new announcements, products and features on our roadmap for the rest of the year, we’ll announce these in due course,” he answered.
“We’re also looking at growing our team in Cape Town, Singapore and Europe to help focus on core services, speeding up the signup and verification processes, adding more resources for people to learn more about digital currencies and continue to make Luno the best place to buy, sell and learn about Bitcoin.”