For the longest time, Kenyans have interacted with virtual currencies for some time now. Bonga points, travel miles, and even airtime are all forms of virtual currencies since they can be converted or exchanged for real-world products.
John Karanja, the founder and lead consultant, Bithub Africa, speaking at the World Blockchain Summit Nairobi 2018, expounded on this and helped the audience appreciate why bitcoin is a truly innovative invention and what makes it truly unique.
Since its inception almost 10 years ago, Bitcoin has evolved to become the true real transfer of value between two parties without a central intermediary. Essentially, parties communicate value, making it the Internet of value.
There are about four characteristics that make a bitcoin blockchain platform truly useful as a means of value transfer:
Protocol is a set of rules used to govern how bitcoin tokens are transferred across the network. In essence, bitcoin is regulated by mathematics. There can only be 21 million bitcoins that will ever exist, creating scarcity that will only make the value of bitcoin to go up.
The blockchain is the distributed open ledger that stores transactions and is secured by the network of miners. It is also the part of the that allows or enables developers to innovate and come up with the different use cases of the blockchain. Transactions stored on the blockchain cannot be changed making the ledger immutable.
In order to hash transactions on the blockchain ledger, a huge amount of electricity is used in a concept called Proof of Work making the network truly secure.
This is the controversial digital token used for transactions and to reward miners who secure the network. The bitcoin token is used to reward miners and also as a means of exchange of value on the network.
This is the peer reviewed open source code allowing for extensible evolution of the protocol. Any developer can download, duplicate and create use cases from the software. As a result, this has allowed for innovations in the space with thousands of cryptocurrencies already created from the software forks.
There has been a lot of debate over scaling bitcoin as adoption and regulation in the space grows. Innovations like the Lightning Network have helped bring the cost of the network down and enable micro-transactions to happen at lightning speeds and at the lowest costs possible.
Currently, speculation has made the value of bitcoin volatile. However, in time, we can expect this to stabilize and enable bitcoin to scale into massive real-life use cases.
Look out for the full keynote address by John Karanja on YouTube speaking at the World Blockchain Summit Nairobi 2018.