Cryptocurrency adoption in Zimbabwe
Stacks in Zimbabwe: The hidden gem in the crypto market
Blockchain has filled the gaps made by the financial institutions by providing peer-to-peer technology to solve the problem of the increase in unbanked adults, mostly in undeveloped continents like Africa. In Latin America, 60% of people do not transact with banks (Magro. P,2018), with Africa being the second-largest number of adults without access to banks (McKenzie B, 2018). When we are talking about the future of money, blockchain immediately comes to my mind. Blockchain is the technological infrastructure that enables crypto and is a variant of decentralized ledger technology (DLT). DLTs have other industrial applications beyond cryptocurrencies for enterprise, trade, and determining the credibility of transactions in investment or banking. I am going to explore the impact of blockchain especially the Stacks blockchain in Zimbabwe. Stacks is building a user-owned internet secured by Bitcoin. The Stacks blockchain enables secure smart contracts and decentralized apps around Bitcoin.
When Zimbabwe’s inflation skyrocketed in 2015, forcing authorities to print $100 trillion notes (each worth just $40), some Zimbabweans turned to Bitcoin. Zimbabweans and citizens of other African countries transact in Bitcoin as opposed to their local currencies, which are plagued with hyperinflation, according to Emmanuel Tokunbo Darko (Vice president of marketing for ICOWatchlist). Stacks is a layer-1 blockchain that connects to Bitcoin and brings smart contracts and decentralized apps to it. Stacks inherit the power of Bitcoin to offer stability and security to transactions being made. Proof of transfer (PoX) connects to Bitcoin with a 1:1 block ratio, meaning anything that happens on the Stacks’ blockchain can be verified on the Bitcoin Blockchain.
What Stacks can bring to Zimbabwe?
In cryptocurrencies, we say that there are early adopters and these are the people who gain the most when it comes to repealing the benefits of a token or coin. The fact that Stacks builds its mechanism on Bitcoin is a big bonus; this shows the great potential of STX. Stacks technology has managed to bring smart contracts and NFTs to Bitcoin, this being the first cryptocurrency to achieve it. Zimbabwe as a nation that has embraced the adoption of Bitcoin in the previous years; can be seen as another opportunity to be on board.
Improving employment opportunities
In 2020, the unemployment rate in Zimbabwe was reported to be at around 5.73 per cent. This number excludes many factors because Zimbabwe is one of the countries that is largely populated with the informal sector (90–95%). Stacks will create incomethrough mining. It provides with mining of STX, this will see youths turning to mine as a way of self-employment.
For example, Coinbase offers miners rewards for blocks they mine. 1000 STX per block are released in the first 4 years of mining; which is estimated to be 1 120 USD (note that this price is due to change as it is determined by the current STX price; current STX price at $1.12) this can improve a poverty-stricken family to a healthy middle income earning family. This can also ensure that the family is given room to acquire and have healthy food which will proportionally increase their life expectancy for it is believed that many people die before reaching the age of 40 due to a lack of a balanced diet and adequate treatment.
Solving the banking issues
Stacks will bring a great advantage for unbanked adults in Zimbabwe. According to the Reserve Bank of Zimbabwe (RBZ) reported (March 31, 2018), the total bank accounts totalled 5.5 million, out of a population of 14 million Zimbabweans. This leaves a large gap of unbanked adults in Zimbabwe. The issues associated with the high level of unbanked adults are caused by difficulty in accessing banking services and unfair interest rates. With a Stacks Wallet, one owns their funds, as they are kept protected in a mobile, hardware, or web-based wallet. Transactions can commence without the intervention of middlemen, and the fees are very low. To add more, the cheap transaction fees will see a significant increase in participation in the Stacks ecosystem. Stacks will store the value of money which has been the biggest problem in Zimbabwe. Many Zimbabweans do not think about saving, because they do not see the point of storing their money in the banks. Stacks as a cryptocurrency will store the value of money also being backed up by Bitcoin.
Providing a secure payment system
Entrepreneurs can now make online payments to secure business deals in any part of the world. Why? How? Well, anything is possible when it comes to cryptocurrencies. With fiat, one needs to go to the bank first to make a payment and exchange their local currency to foreign currency to process the payment. These transactions may take 2–3 days to be validated and attract high transaction fees. With Stacks, the power is in your hands. When and how much to transact is determined by just logging into your wallet. You can pay for your goods or services by sending STX to the desired destination (STX receiving address). This way there is no need to convert any currency. Less time is taken when making these transactions. Stacks will bring such opportunities to the Zimbabwean economy. Businesses will be able to pay for their services fast and effectively.
Since Stacks is an extension of Bitcoin technology, it provides authenticity and transparency between transactions of two participants. Transactions cannot be faked and STX cannot be forged. Transactions are automated and stored in a database called a ledger. All transactions are recorded in a ledger. This record cannot be tampered with by anyone. This gives a great advantage to Zimbabweans in doing transactions both locally and abroad. The owner’s personal information remains private; only a wallet address and a memo is needed when transacting STX. Many opportunities can be seen and adopted with Stacks. In 2020, Zimbabwe launched its very own cryptocurrency called ZimboCash ($ZASH) to facilitate locally made transactions. It is a cryptocurrency system where the supply of money is fixed. All Zimbabweans who sign up are allocated $ZASH and are incentivized to make transactions. Stacks brings a completely new mechanism above ZimboCash since its users can make local and international transactions and be rewarded for Stacking. The fact that Stacks is listed on many exchanges compared to ZimboCash is a bonus. Stacks also offers Stacking while Zimbocash is for transactions only.
A way of earning BTC yield
Lastly, this is the most important aspect of Stacks. When one Stacks STX, they earn BTC rewards. There is an article I wrote about Stacking or Staking, care to look at the advantages and requirements when it comes to Stacking STX. Stackers are rewarded for Stacking on their own or delegating their STX to a Stacking pool.
Why Stacks and not other cryptocurrencies?
I am sure you still asking yourself the same question, why Stacks? Well here is a quick run-down of why this is a solid project to participate in. Stacks is built on Bitcoin and l am sure the first time you heard about cryptocurrencies all you could hear was Bitcoin. Bitcoin is the base of all cryptocurrencies, the crypto with the highest market capitalization. Stacks has made it possible to mint Non-fungible tokens (NFTs) on Bitcoin; this has seen artists like Fatboy Slim and Chemical X partnering with Risidio for one of the first NFTs on Bitcoin (this is number one #1 project). This will offer a chance for Zimbabwean artists to sell their artwork on NFT marketplaces; with companies like OpenArt Source working towards this. Stacks offers what no other cryptocurrency offers, thus Stacking. With other cryptocurrencies like ETH or BNB just to mention a few, you still receive ETH or BNB in rewards. When it comes to Stacks when you stack you receive BTC rewards.
Opportunities are endless with Stacks, as more and more things are being integrated into the Stacks ecosystem. Zimbabweans must see this as a lifetime investment instead of just participating in the consensus. Stacks can be seen as the solution for Zimbabwe’s traditional currency, which has been faced with high transaction costs, inflation and currency devaluation, exorbitant interest rates, and high levels of fraud. Having said the above one can acknowledge that Stacks offers low transactions fees, rewards in Bitcoin which is the first stable blockchain to be introduced in the crypto space makes it stand out above the rest.