Blockchain Africa 2021: Charles Hoskinson's keynote speech
The following is a lightly edited transcript from Charles Hoskinson’s speech on March 18th, 2021 at Blockchain Africa 2021 outlining IOHK’s vision for Africa.
22 March 2021 13 mins read
Africa and the topic of banking and the unbanked, the topic of economic identity, is something that's near and dear to my heart. More than 10 years ago, I was using Kiva, a microfinance lending platform, and it awoke a long journey of mine to read books like Muhammad Yunus’ Banker for the Poor and start having a discussion about the question: why does the world have fractured financial systems? And why is it the case that people for no fault of their own, if they lose the geographic lottery, are born into systems that will keep them perpetually poor, regardless of how hard they work or the quality of their character?
This led me to the cryptocurrency space. I didn't really care too much for arguments about proof-of-work or proof-of-stake or how Bitcoin transactions worked or any of these details. What mattered to me was the utility of the system for bringing economic identity to the billions who don't have it. And I knew that this concept of decentralization, this concept of having a blockchain that serves as a place to timestamp things, to audit things, a place to broker trust amongst people who don't trust each other, was truly something revolutionary and magical. But it was a great invention that came without a user manual, and without batteries included. In the 10 years since I joined the cryptocurrency space, it's been my life mission to build systems that have the capacity to act as a backbone for utilities and social structures that will enable a great merging of the markets of the world.
The aim is that those who are the poorest amongst us will enjoy the same financial systems as those who are the richest. It's a simple idea, but in practice, almost impossible to achieve with legacy systems. And the crown jewel of our labors has been the Cardano protocol. We started in 2015 building the Cardano protocol specifically to figure out how to accommodate this concept of economic identity, how to build applications that would be equally useful to someone in a basement in the US as they are to a shepherd in Senegal.
We also realized that in addition to doing great science and great engineering, it would take quite a bit of time for us to actually figure out how to deploy these systems within the developing world. That meant we physically had to move to those countries. And thus in 2017, after we were a bit more mature as a company, we opened up offices in Addis Ababa, Ethiopia. We built extensions into Rwanda and Uganda, and we found great partners. We also started exploring places like Mongolia, Georgia, and South American nations as well. We were all unified with a common cause and purpose. How do we enable a system to operate from the bottom up instead of the top down? How do we figure out how to give people self-sovereign identity and put them in control of their own money, control of their own future, and give them a platform to build upon?
How could we allow them to secure credit and retain property? Then to protect and secure that through insurance and other products. Now, that four-year journey, since establishing that office in Ethiopia, has yielded some amazing fruit. First off, we've had the incredible opportunity to meet many world leaders who are aligned with many NGOs and charities that are directly aligned with our goal. We've also been able to train local talent and hire local people. They have made this their tireless life mission. In many cases they did this with few resources and, in many cases, exposed to uncaring bureaucracies or corruption, waste, fraud, and abuse, and just plain old-fashioned setbacks.
We've seen our own setbacks. Some of the countries we've chosen to be in have had unrest. Some of the countries we've chosen to work with have had regimes change. As a consequence, things that we thought would be happening sooner took a little bit longer. With that said, we are on the cusp of deals and initiatives, this year, which will bring millions of users through public private partnerships into the Cardano ecosystem. And what does that mean? Really? What does that mean?
It means that a large group of people, for the first time in their lives, will have a digital identity that can be linked to a digital wallet. That also can be linked to payment systems, which also can be linked to property. These can then enjoy rich metadata and other such things. And this is the highest goal, because if we can achieve these things, then it means functionally a new economy built on the great liquification of trillions of dollars of wealth. You see, the reality is that Africa is not a poor continent and African nations collectively are not poor.
They are, rather, in a situation where they have tremendous potential and real wealth, but that wealth is inaccessible because of bad systems and a difficulty in globalizing the continent’s nation states. This is a tremendous opportunity. The reality is when you look to the future, you don't want to go to where the ball is now, you want to go to where the ball will be. In other words, you want to go where the economies are going to grow the fastest and see the greatest opportunity.
China to Africa
We saw this in the 1980s with the surging of China. It was a common notion then, amongst people in Wall Street and London and Japan and other places, that China was a very poor nation with many systemic problems. But amongst the very specialized actors who truly understood where things were going, they realized that changes in those systems had built up to a position where China in just a few decades would become one of the richest and most powerful nations in the world.
Similarly, when you look at the demographics of Africa, you look at the generation that will take custodianship of the continent. You see that 70% of Ethiopians are at, or under, the age of 30. Many of these people are growing up with a cell phone in their hand, with access to the internet. They have access to education, thanks to MOOCs, thanks to YouTube and other free platforms. And so the bridge of human capital has occurred. And you have a group of people who are tremendously ambitious and impatient, and will not tolerate the bureaucracy of the past and will not tolerate the sins of the past. Whatever systems stand in the way of progress will soon come collapsing down. And in that wake, that vacuum is a marketplace for new systems.
A new generation
My country has trillions of dollars’ worth of social infrastructure. In the United States, for our financial markets, for our legal system, for every single thing, from how our healthcare works, to how we die, there's a law or regulation or some bureaucracy that stands in the way. In many cases, these things hold and stabilize our society, but they make us less resilient, less adaptable, and also they slow down progress. And they hinder the ability to chase the future when there is a potential for completely new systems, which in many cases are orders of magnitude more efficient at a much lower cost. That is going to result in a huge competitive advantage for the nations that adopt the new systems first. The first countries that hold national elections online that are credible, free, fair, and auditable are likely to be African nations. They will be first countries to have an end-to-end digital identity and economy.
This offers great potential for African nations – not Germany, not France, not Britain, not the United States, not China, not Japan. This is an all-you-can-eat buffet of innovation, progress and new systems, and my industry, the blockchain industry, is interconnected with this. ‘New’ is what we do. We find ways to build trust amongst people who don't trust each other. We find ways to change everything, from monetary policy to the concept of identity, to the concept of property.
So we built infrastructure in Ethiopia, amongst other places on the continent. We did that knowing the infrastructure would be used to service large government deals. We adopted the push model, where we push these things to the citizens of countries, and began a systemic campaign of innovation across the continent. The other magic of Cardano is that it comes with a funding system called Catalyst. Today, right now at the current price of ada, over a quarter billion dollars, $250 million, is available for grants. For those who wish to build infrastructure, applications, and services and products in the Cardano ecosystem.
Africa leading the way
It is our belief and hope that over the next five years, a meaningful percentage of the entrepreneurs who deploy infrastructure will come with a pan-African view. It could be a peer-to-peer lending system; it could be a remittance system; an ATM network; basic internet access; a micro ISP. It could be power generation. And this is not only a goal – it's something we're investing heavily in, with partners like ICE Addis, which gives us access to entrepreneurs. And in more than 25 countries in Africa over the next five years, our staff on the ground will likely scale from the dozens to the hundreds, if not the thousands. And, instead of having one headquarters, it's likely we'll have four or five headquarters covering the continent.
For example, we've started a campaign to build up resources and access and personnel in Ghana. I will also try to do the same in places such as Rwanda. And what we have found in every place we go is a welcoming attitude, and a lot of grace and intelligence. For example, the Prime Minister of Ethiopia is a cryptographer. My country is ruled by a president in his late seventies. Ethiopia is ruled by a person who can actually read the academic papers. This is a stark contrast in both age and outlook. The potential for Ethiopia reminds me of the early days of Singapore as an independent country and the wisdom and judgment that was going into the growth and management of that country. And I think the exact same thing can be done with a helping hand here and there in a way that benefits as many people as possible.
So, we're super excited and we've been investing in everything, like identity. The PRISM team is our entry point into identity and has over a dozen people. That team has expanded by 30 people and to our ability to tender and bid for contracts. We wanted to seal some flagship contracts first, and those are coming to a close, which will bring millions of people into Cardano. And then those will stabilize as a foundation from which we can do business with dozens of entities and countries, both public and private. And the people responsible for that are scaling up very rapidly to train far more developers, to train far more entrepreneurs, and then give those entrepreneurs access to marketplaces and capital so that they can liquify the wealth of Africa and benefit from it. You see, many people tend to look at this as a charity problem. I think that's both the wrong way and also fundamentally dehumanizing.
I look at this as ultimately a new market, a new frontier where we can find new partners to work with. It is not our goal to save people or to give anything away. It's our goal to build partners, collaborate and create wealth, and share that with our partners. I cannot imagine what it means to be born in Zambia or Zimbabwe or South Africa. It's not my life and it's not my experience, but there are millions who have that life and experience. What I can imagine, though, is how to build a great business with people born in those places and for us to build wealth together. That's the point of blockchain technology. It's a great unifier. It's a great engine of trust. It's a great engine of economic progress and creation. As blockchain entrepreneurs, without permission, government aid or centralized coordination, we have built an ecosystem worth $1 trillion, looking at the market capitalization of cryptocurrencies like Bitcoin and Ethereum and Cardano and others, and that's just 10 years into this game.
We've also spurred a movement with tens of millions of people all across the planet, from nomads and Mongolia to shepherds in Senegal. Each and every one of them can run their entire life from a cell phone without relying upon a central agency. And over the next 10 years, we could see growth of another order of magnitude and the totality of our ecosystem could be $10 trillion, $15 trillion, $20 trillion. And the majority of that could be owned by those in developing nations, such as Ethiopia, such as Uganda, such as Chile, That could be the greatest achievement of systems in the past century, bettering the lives of all and reducing the problems of all. So, it's very exciting to be here. It's great to be part of these events and to see the rollout in a very short period of time.
We're going to announce an Africa focus in our company, and we'll be able to show everybody all the different programs and pilots and projects and partners, and the vision of what we're going to invest in over the next three to five years. It is the privilege of a lifetime as an entrepreneur to be able to participate in these markets in this way. I literally get to wake up every single day and talk to the most ambitious, honest, and hardworking people I've ever met in my life and find ways to build systems with them that not only make their lives better, but produce wealth for all of us. And if I'm right in my hypothesis, I believe that Africa will make the Chinese miracle that we witnessed over the past three decades become the African miracle, which will dwarf anything China has accomplished and perhaps make Africa one of the most valuable continents in human history.
A seat at the table
It happened before with the great Mansa Musa, and I think it definitely can happen again, if we build the right systems. It would be a travesty if those systems allowed that wealth to aggregate only in one place. In my view, it is incredibly important that we remember the first principle of the cryptocurrency space, that we are all truly equal and there is no centralized power.
The magic of the systems that we build and engineer is that everybody has a say, no matter where they come from or who they are. And everybody has a seat at the table in being able to decide the trajectory of their life and to keep the fruits of their labors. So thank you so much for coming, and I hope you enjoy this conference as much as I do, and I hope you choose to invest in Africa as much as I have. I think it's the best investment any business can make. And I also believe it's the most rewarding work any person can do.