According to a policy paper produced by the United Nations Conference on Trade and Development (UNCTAD), cryptocurrency acquired global traction during the pandemic, expanding dramatically and developing a fantastic footing in Africa.
It also uncovered some astounding data, such as the fact that more than 19,000 cryptocurrencies are already available. In 2018, there were only 1,500, and 450 crypto exchanges reached a combined value of $500 billion in daily trading in May 2021.
Kenya, South Africa, and Nigeria are the top African countries for cryptocurrency right now. South Africa is one of the biggest hubs on the continent. Bitcoin was recognized as a legal tender in the Central African Republic as recently as June 2022, while a survey by Chainalysis found that the continent saw a 1,200% rise in the use of cryptocurrency payments between 2020 and 2021.
There are many reasons cryptocurrency has gained traction on the continent, the majority of which are related to soaring interest rates, ravaged local currencies, and the high walls that the unbanked typically have to climb to access financial systems and support.
However, there are many reasons why cryptocurrency has gained traction on the continent. The notion that cryptocurrencies may circumvent these barriers makes them appear to have a lot of commercial appeals. However, they do provide a risk that is not to be taken lightly. There will always be people looking for new ways to defraud the system, take advantage of the users, and steal money, which is especially true in the digital and financial spheres.
According to Anna Collard, SVP Content Strategy and Evangelist at KnowBe4 Africa, “People need to become educated with the hazards of social engineering as well as common frauds to safeguard themselves, their digital assets, their wallets, and ultimately their money.”The ecology of cryptocurrencies is still very much like the Wild West, with criminals making enormous profits off of those who are unsure of the laws and are taken advantage of by crooks. It is absolutely necessary for anyone participating in the cryptocurrency ecosystem to have a solid understanding of the dangers involved.
Having said that, there is still a considerable amount of potential within the digital bank vaults that cryptocurrencies provide.
One of these is the capacity to interact with the developing idea of the metaverse, which refers to a world in which human and computer elements are combined and which offers a tremendous opportunity to companies and individuals alike.
Africa must be included in the conversation, even though the idea is still in its infancy and consists primarily of speculation and hype. According to Collard, the results of a poll conducted in July 2022 by KnowBe4 and ITWeb explained what South African organizations thought about the metaverse, NFTs, blockchain, and Web3.
While most respondents (82%) stated that their company does not use blockchain technology, approximately 83% of respondents stated that they intended to implement such technology soon. Half (56%)of respondents stated that they intended to participate in the metaverse. People are excited about the metaverse and what it could do, but organizations are wary of the risks.
According to the survey findings, approximately 28% of respondents had concerns regarding the safety and risk factors that come with cryptocurrency. At least 30% of respondents said they were planning to update their security strategy. In comparison, 14% of respondents said they had already put well-defined security controls in place to address these emerging technologies.
According to Collard, participating organizations need to initiate early collaboration with their security and risk teams in order to determine what might be at stake and the locations of any potential vulnerabilities in the system.
They are responsible for ensuring that developers receive sufficient training, that programs are tested and audited thoroughly, and that end users are informed of the potential dangers. It is also vital for government regulators and policymakers to develop policies that can be applied to the metaverse and cryptocurrencies and safeguard vulnerable groups and consumers without impeding innovation.
Emerging blockchain-based technologies and the ideas that surround them are still finding their feet and their way, but they are proving to be more than just fads that will go away with time. Moving forward, consumers and organizations operating in this field must provide a high level of importance to security and risk awareness to maintain the safety of their investments and maintain a great user experience.
End-users need to be aware that involvement in any new technology makes them a bigger target; as a result, they should make preparations in advance, be aware of the risks, and acknowledge them.