Month: November 2021

Solana, the Blockchain Project Not the Beach!

 

Today I am looking at Solana. No, not the Californian beach,  the blockchain project that is currently taking the crypto world by storm. Although, fun fact the project was named after Solana beach by it’s founders.

Solana is a high-performance cryptocurrency Blockchain that supports smart contracts and Decentralized Applications (dapps). Solana’s architecture ensures speed, security, and censorship-resistance. All things that are necessary to achieve global adoption.

The Solana platform supports smart contracts similar to Tezos and Ethereum. This enables developers to build dapps such as high-volume Decentralized Exchanges (DEXes).

According to their website, Solana is super fast, claiming to  process up to 50,000 transactions per second. It is designed in such a way as to keep fees low for both users and developers.

How Does Solana Work

Solana’s technology consists of 8 components:

Proof-of-History (PoH)

With traditional consensus methods, all nodes on a Blockchain must communicate with one another to determine that time has passed. Each node submits an upvote or downvote for any given block to show that the block is valid or invalid. A given number of upvotes will be necessary for a block to be considered valid by the network. If a local clock produces a timestamp that widely differs from the time used by other nodes, it can result in a delay in confirmation time or even rejection of the block.

Proof-of-History (PoH) solves this problem and allows the Solana network to process transactions extremely quickly. PoH creates a historical record that proves that an event has occurred at a specific moment in time, like a cryptographic clock. The Solana Network chains messages from nodes about the validity of blocks to provide a relative chronological order of events that functions independently of local clocks and timestamps.

A network node chosen as the leader becomes responsible for generating a PoH sequence. This leader sequences messages for maximum efficiency and throughput. The ordered output transfers to replicator nodes called Validators. These Validators handle verification of the consensus algorithm. There is always one leader on the network, chosen via Proof-of-Stake (PoS) elections. Solana’s PoS system relies on a Byzantine Fault Tolerance (BFT) mechanism called ‘Tower Consensus.’

Any Validator node is eligible for selection as the PoH leader. If any failures transpire within the PoH generator, the Validator with the next highest voting power replaces the original leader.

Tower Consensus

Solana runs a Tower Byzantine Fault Tolerance consensus mechanism on the Proof-of-History (PoH) protocol.

Tower BFT leverages the PoH as a clock before consensus to reduce communication overhead and latency. In many aspects, this consensus bears a resemblance to the Practical Byzantine Fault Tolerance (PBFT) consensus algorithm.

However, unlike PBFT, Tower Consensus prefers liveliness over consistency. In this system, nodes allow more time for reaching consensus by exponentially increasing their timeouts. Since the ledger is also a trustless source of time, nodes are able to observe and examine timeouts of all network Validators.

Turbine

One of the major challenges with Blockchain technology is the rapid transmission of large amounts of data. Solana solves this by using Turbine. Similar to BitTorrent, Turbine functions optimally for streaming. Data transmits via the User Datagram Protocol (UDP), which speeds up communications since there is no need to formally establish a connection before transferring data.

Turbine implements a random path per packet through the network as leaders (block producers) stream their data. The leader breaks the block into packets up to 64KB in size. For a 128MB block, the leader produces 2,000 64KB packets and transmits each packet to a different Validator.

Each Validator re-transmits the packet to a group of peers called a ‘Neighborhood’. These Neighborhoods then transmit packets to subsequent Neighborhoods.

Gulf Stream

Gulf Stream works by pushing transaction caching and forwarding to the edge of the network. In Solana’s Network, during each block production process, the choice of upcoming network leaders depends largely on their stake.

Since every Validator knows the order of the forthcoming leaders in the architecture, clients and Validators forward transactions to the anticipated leader ahead of time. This allows Validators to execute their transactions earlier, reduce confirmation times, and switch leaders faster. It also reduces the memory pressure on Validators from the unconfirmed transaction pool.

Sea Level

SeaLevel is a Virtual Machine (VM) that schedules transactions. In SeaLevel, the execution of transactions is not the responsibility of the VM. Instead, they undergo hardware execution using bytecode known as Berkeley Packet Filter (BPF), an industry-proven high-performance packet filter.

Pipeline

Pipeline is a Transaction Processing Unit for validation optimization. On the Solana Network, the process of transaction validation makes extensive use of an optimization that is also common in CPU design called ‘pipelining.’ Pipelining is a set of data processing elements connected in series in which the output of one element is the input of the next one.

This ensures that every part of the hardware works efficiently at all times.

Cloudbreak

To achieve network scalability without sharding, Solana uses Cloudbreak as a horizontal scaling solution. Solana’s design principle is to create software that reduces the utilization dependency of hardware. Moreover, Cloudbreak is a data structure that concurrently reads and writes transaction input from across the network.

Archivers

Solana’s network allows every node to replicate information from the Blockchain according to the space available on their hardware. Archivers download their respective data from Validators, and this data is accessible to the network.

Token

Solana’s native coin, SOL, functions as a means for generating staking rewards, paying transaction fees, and PoS voting for governance of the network. In addition, all SOL holders are eligible to become a network Validator or Leader.

Conclusion

Solana is an interesting project that I will certainly be keeping a close watch on. Could it become the Ethereum killer? I’m not sure, but in a short time Solana is making big waves!

In October 2020, Solana partnered with payments platform Circle to enable immediate issuing of USD Coin, a stablecoin pegged to the value to the U.S. Dollar. In turn, Solana provides Circle with an ecosystem of payments, commerce, and financial applications on the Blockchain.

Big news indeed let’s see if Solana can keep delivering!

Paxful – Making Waves in Africa

Paxful is a peer-to-peer (P2P) Bitcoin marketplace. However, they aren’t just your run-of-the-mill trading platform: they have a very real agenda for good. Their mission is to help the unbanked gain financial freedom and improve the lives of communities across Africa.
Curb That Volatility!

There are some amazing crypto projects developing in Africa. With rampant inflation, strict financial regulations and corruption abound, it’s no wonder Africans are looking for an alternative approach to finance.

Some may argue that cryptoassets are too volatile and unsafe. But when you look at the fluctuating inflation rates in some African countries, using crypto doesn’t actually seem so crazy anymore. Just take a look at The South African Rand (ZAR): It has lost over 50% of its value against the US Dollar in the last decade. Unfortunately, it’s also consistently one of the most volatile fiat currencies around. Imagine trying to save money in a country with such rampant fluctuations. Can’t be easy!

Organizations such as Paxful are doing their utmost to affect meaningful change in Africa, offering a practical alternative to those crazy fiat currencies. Today I take an in-depth look at the Paxful Network and their ongoing humanitarian work in Africa.

What is Paxful?

Paxful is a peer-to-peer (P2P) network where people can buy and sell Bitcoin and connects various stakeholders from all over the world. With Paxful, users can transact using over 300 different payment methods including gift cards, cash, cars, and even groceries. Oh, and of course there’s the more traditional bank transfer as well, if that’s your cup of tea.

As Ray Youssef, CEO of Paxful, said in an interview with Max Keiser in February 2021:

A person in Nigeria can get a relative in California to buy a giftcard and send it to them. They can sell that gift card on Paxful to someone in China for Bitcoin. They can then convert that Bitcoin into Naira (Nigerian fiat currency) and then transfer it to their local bank

Paxful was founded in 2015 by Ray Youssef, an Egyptian immigrant who grew up in New York, and Artur Schaback, an Estonian who moved to New York. The name Paxful comes from the Latin pax or peace. The co-founders named the project Paxful because for them, Bitcoin is a way of bringing more peaceful, meaningful solutions to finance.

As the American economist, professor and columnist Paul Krugman once said:

Fiat money is backed by men with guns

The co-founders met at a Bitcoin Conference and soon realized they shared a common belief. The duo held the view that Bitcoin could be used to help individuals achieve financial freedom and gain the ability to trade unhindered by centralized authorities. The rest, as they say, is history, and Paxful was born out of this belief.

Paxful in Action

In the same interview with Max Keiser, Youssef gave examples of how Paxful is helping people in Nigeria.

Paxful realized that the way to get a toehold in Africa was to crack the Nigerian market. It is notoriously difficult to get money in and out of Nigeria. Also, at the same time Paxful was starting out, Bitcoin was trading in Nigeria between 40 and 60% above average market price. Naturally this made it difficult for ordinary people to buy Bitcoin. Paxful subsequently came up with a novel solution to this dilemma: gift cards. Simply put, Paxful connected Nigerian gift card sellers directly with Chinese gamers. Nigerians soon began selling gift cards for Bitcoin, and so the world’s first-ever crypto now had an easy route into Nigeria.

The used car business in Nigeria is huge and growing steadily year-on-year. According to Youssef, Nigerians are mainly importing used cars from America. They then resell them in Nigeria and make anything from 100 to 400% profit.

A few years ago the Nigerian government stepped in with regulations that made it difficult for Nigerian car dealers to exchange US Dollars for Naira. The car dealers looked for a solution and came up with the idea of trading using Bitcoin. They contacted Paxful for help. Youssef stepped in to show them how to buy the cars legitimately using Paxful and Bitcoin. Their business was restored without the use of banks or financial organizations.

Paxful also helps people in Nigeria make online purchases. In Nigeria, if you own a debit card, online purchases are limited to $100 per month. As a result, Nigerians are making use of Paxful to bypass this annoying regulation.

Promoting Community Upliftment with Paxful

As well as giving Nigerians the ability to trade with Bitcoin, Paxful is strongly committed to improving conditions for communities in Africa. Their foundation, Built With Bitcoin, devotes itself to the creation of equitable opportunities by providing clean water, access to quality education, sustainable farming, and humanitarian support. The foundation is funded by a percentage of Paxful’s profits as well as donations from individuals and organizations.

Education

The foundation opened their first school in Rwanda in 2017. Since then, five more have been built: one in Rwanda, two in Kenya and two in Nigeria. Their ultimate goal is to build 100 schools across Africa.

The foundation also provides funding for generous scholarships to train female teachers in Afghanistan. As a predominantly Muslim nation, many parents are reluctant to send their daughters to school because the vast majority of teachers are male. Only 25% of Afghan teachers are actually female. The aim is to get more girls in schools so that they can enjoy the many benefits an education brings.

Clean Water

Many communities in Africa have limited or no access to clean water, an essential part of maintaining hygiene, staying healthy and running sustainable farming operations.

Paxful has introduced a range of solutions in order to provide clean water including filtration units powered by solar energy. These units filter dirty or contaminated water using sand and chlorination, making it suitable for human consumption.

Depending on the topography, Paxful builds sustainable boreholes, underground rain-catchment systems and/or water tower reservoirs to provide clean water to communities.

The Olympics

In July 2021 Paxful donated to The Friends of Nigerian Basketball Foundation, a Non-Profit Organization (NPO) dedicated to promoting basketball in Nigeria and with the Nigerian diaspora. The donation was to help fund The Nigerian Men’s National Basketball Team in their bid to win an Olympic medal.

Paxful is just one of many interesting projects currently operating within Africa. The continent’s large, primarily young population has demonstrated that they are ready to embrace new technologies and ideas. This attitude provides fertile ground for crypto projects to thrive. I know I’ll be watching Paxful with great interest and truly hope they continue to go from strength to strength.

The Sun Exchange. Lighting up South Africa

 

Climate change and crypto are two interesting topics that have made the news a lot in recent times. Today I take a closer look at a Blockchain project that tackles both of these subjects: Sun Exchange. Simply put, the company aids communities by crowdselling solar power cells. People can then lease their cells to organizations in emerging economies and get paid in Bitcoin. It’s a win-win situation in my opinion. Read on and you’ll see exactly why…

A Unique Discovery

Based in South Africa, Sun Exchange is the first peer-to-peer (P2P) solar leasing marketplace. I first heard about the company back in 2018. Max Keiser and Stacy Herbert were appointed as advisers to the project and talked about it on the ever-popular Keiser report. I was fascinated by the concept and signed up for the Sun Exchange Newsletter that same day. Over the years I have followed their progress with keen interest.

The Nhimbe Fresh and Sun Exchange project really grabbed my attention because it’s the latter’s biggest and most ambitious initiative to-date. For this reason I decided to take a deep dive into the project and share my findings with all of you. It’s a great example of crypto entrepreneurship that’s really helping change peoples’ lives. So let’s get to it!
What’s Sun Exchange?

First of all, let me explain how Sun Exchange works, because it’s a truly unique approach that deserves some attention.

Sun Exchange identifies schools, businesses and organizations that want to move away from fossil fuels and go solar. Once an entity has been verified as viable and responsible, Sun Exchange runs a crowdsale to sell solar cells (by the seashore?) and raise money for the project.

Anyone from anywhere in the world can sign up to be a Sun Exchange member and buy solar cells. Purchases can be made using a traditional bank transfer, credit card or Bitcoin.

Owners of solar cells receive monthly payments once their cell starts generating electricity. Owners can either get paid in the currency of the country in which the project is based, or they can receive payment in Bitcoin.

So organizations benefit from getting access to clean, constant power whilst the people who lease their solar cells can earn crypto and feel good about themselves. Isn’t that awesome?

The Brain Behind Sun Exchange

Sun Exchange was founded in 2015 by Abraham Cambridge. Before starting the company, Cambridge ran a business in the UK installing solar panels.

In 2014 he moved to South Africa and began work as a solar engineering consultant. He was shocked by just how few buildings had solar panels installed despite South Africa being one of the world’s sunniest countries. He later discovered that accessing finance to pay for solar projects was a major roadblock to greater uptake. Cambridge was eager to address this problem and help schools, businesses and organizations across Africa access clean and affordable renewable energy.

With experience in climate change studies, solar panel installation and crypto, it should comes as no surprise that Cambridge is the brains behind Sun Exchange.

Nhimbe Fresh

Founded in 1996 in Zimbabwe, Nhimbe Fresh is one of Africa’s largest producers of fruit and vegetables. The company supplies the world’s markets with bluberries, stone fruits and vegetables. There’s a good chance that those blueberries you bought at your local supermarket were grown and exported by Nhimbe Fresh.

Nhimbe Fresh is more than just a farm. They are also dedicated to helping local communities. At present they provide employment for around 1,500 people in the local area and run several support programs to help local families enjoy a better quality of life.

Small farms in Africa provide up to 80% of total food production. Sadly they face a host of difficulties including small plots of land, barriers to entry into larger markets and a lack of finances.

Nhimbe Fresh takes active steps to help these small farms by providing them with practical support and solutions. One such program is the farmer education project which focuses not just on farming practices, but also healthcare and business procedures.

Nhimbe Fresh provides access to export markets for small farms with its outreach program. It collects produce from farms up to 100 km away and allows access to their packing and cold storage facilities. This outreach program allows said farms to earn money and gain access to finance, expand their operations and improve their overall standards of living.

All Nhimbe Fresh farms have clinics and childcare facilities available for employees. In addition, Nhimbe Fresh supports Marondera Children’s Home where some 200 children receive housing and care on a daily basis. Nhimbe Fresh are currently looking at ways to provide funding to pay for school fees at Marondera and offer students employment post-schooling.

Nhimbe Fresh is proud of their efforts to operate transparently as a sustainable business and protect the environment. However, their operation requires a huge amount of electricity for processing machinery, chillers, pumps and lighting. The Zimbabwean electricity supply is ‘unpredictable’ to say the very least and suffers from frequent power cuts. Nhimbe Fresh is thus forced to use backup diesel generators during power outages. As you can imagine, these generators are unreliable, noisy and very costly to run.

The power outages have a major impact on our production and processing, reducing our capacity to 60%. We have backup diesel generators for the packhouses and irrigation, but they’re too expensive to run – Edwin Moyo, Nhimbe Fresh Chairman

It’s clear that Nhimbe Fresh needs a clean, affordable and reliable power supply to run efficiently. This is where Sun Exchange enters their story…
Sun Exchange & Nhimbe Fresh

Sun Exchange has committed to providing solar panels and battery storage solutions for Nhimbe Fresh over three phases:

  • Phase One – Solar and battery project to power the packhouse and cold store
  • Phase Two – Power water pump sites
  • Phase Three – Power for Churchill Farm

The project will provide 1.9 Megawatts of power and battery storage and is Sun Exchange’s biggest initiative thus far, as well as their first outside of South Africa.

Providing solar power has many benefits, and not just for the environment. Firstly, it will provide Nhimbe Fresh with a continuous, reliable supply of power. The solar project is forecast to reduce their energy costs by more than 60% per year. Moreover, their carbon emissions should decrease by more than one million kilograms per year. That’s huge! This is a far cry from running diesel generators and relying on an unpredictable power supply from the ailing national grid.

In June 2020, Sun Exchange ran a crowdsale to raise money for the Nhimbe Fresh project. The sale managed to bring in $4 million and was considered a great success.

You can learn more about Nhimbe Fresh and the Sun Exchange crowdsale on the Sun Exchange YouTube channel

Progress so Far

At time of writing, equipment for the first phase of the Nhimbe project is en route. The aim is to have the equipment installed and running by the end of August, so it will be interesting to see if this goal is achieved in the expected time frame.

The next phase will concentrate on providing clean water to Nhimbe by using solar-generated power to pump water from reservoirs to the facility. Nhimbe uses a huge amount of water to irrigate their crops, so the success of this phase is absolutely critical.

Sun Exchange is just one of the many amazing projects coming out of Africa. I hope to bring you more stories about innovative projects in the future, but in the meantime, I’m rooting for Nhimbe Fresh! I hope to bring you updates on this initiative as and when they emerge.

El Salvador’s Love Affair with Bitcoin

 

El Salvador is the first country in the world to make Bitcoin legal. Will this be the answer to the nation’s financial woes? Or will it be a match made in hell? Let’s find out more!

The Beginnings of a Financial Romance

Unless you’ve been living under a rock for the last while, you must have heard that El Salvador recently passed a bill to make Bitcoin legal tender. In fact, the bill was passed by a large majority, gaining 62 out of 84 possible votes within Congress. Under the new law, which will be implemented in September 2021, Bitcoin must be accepted by firms when offered as payment for goods and services. Tax contributions can also be paid in cryptocurrency.

However, El Salvador is not getting rid of the US Dollar all together. El Salvador’s President Nayib Bukele stated:

‘The use of Bitcoin will be optional, nobody will receive Bitcoin if they don’t want it. If someone receives a payment in Bitcoin, they can choose to automatically receive it in Dollars’

El Salvador is the first country in the world to make Bitcoin legit. You might be wondering why this is such a big deal for El Salvador as well as several other Central and Latin American countries. Let me explain by first giving you some history on the nation that is El Salvador.

This small Central American country’s past is a troubled one. It has endured political and economic instability with a series of coups, revolts, and a succession of authoritarian rulers. Persistent socioeconomic inequality and civil unrest led to the Salvadoran Civil War which took place between 1979 and 1992. Due to this constant state of conflict, El Salvador has been ravaged by poverty and gang-related criminality.

Traditionally, El Salvador relied heavily on coffee exports for revenue. However, they later looked to diversify their international exports and the economy by opening up trade and financial links as well as expanding their manufacturing sector. To facilitate trade and attract foreign investment, El Salvador dropped its own currency, the Colon, in 2001 and adopted the US Dollar.

So what has all of this got to do with Bitcoin? Well, simply put, adopting the US Dollar didn’t solve El Salvador’s financial problems. The foreign trade that was promised, the high-quality jobs, the foreign investment, the increase in exports…all of this didn’t come to pass. So how does El Salvador keep its financial head above water?

Foreign remittances is the answer. In 2019, foreign remittances amounted to the equivalent of 16% of the country’s GDP. Many Salvadorans migrate to the United States to find work so they can send money home to their families, and foreign remittances allow them to accomplish this.

Naturally, this is where Bitcoin comes in. Now as many of you know, sending money through the traditional banking system is slow and expensive, because everyone wants a slice of the pie. Moreover, opening a bank account requires legal documents, like a passport. This is a major issue in developing countries where accessing official documents is typically expensive, time-consuming and complicated.

Bank accounts…now that’s another problem! According to President Bukele:

‘Some 70% of people in El Salvador lack access to traditional financial services.’

So, with such a large percentage of the population unbanked, Bitcoin could solve a lot of problems by getting money from abroad, quickly and far more affordably.

Not Quite a Fairytale?

Many arguments have been put forward criticizing El Salvador’s decision to make Bitcoin legal tender. The IMF and World Bank have outright refused to assist with the roll-out. The World Bank cited that they had problems with the transparency of Bitcoin transactions and the environmental impact of Bitcoin mining.

Excuse me? Did they not hear President Bukele say that El Savador will mine Bitcoin using geothermal power from the country’s volcanoes?

 More on that in a follow-up article. Stay tuned!

One common argument is that using Bitcoin is too difficult and risky for the average person. To address this issue, President Bukele has committed to offering training to people and initiatives promoting the use of Bitcoin.

He is also launching an e-wallet called Chivo, which is Salvadoran slang for ‘cool.’ As part of the package, people who make use of it will receive $30 in Bitcoin so that adoption is incentivized.

Athena Bitcoin announced plans to install 1,500 Bitcoin ATMs in El Salvador, targeting places where residents receive remittances from abroad. This should make it easier for people to buy and sell Bitcoin.

President Bukele was asked whether the use of Bitcoin would encourage criminal activity and money laundering. This is a common argument often used by opponents of crypto and Blockchain. He replied that criminals are already using the Dollar…

‘The problem is not the Dollar, it is the criminals.’*

Another argument is that Bitcoin is highly volatile, which makes it risky. However, with rampant inflation across many Central and Latin American countries, the volatility of Bitcoin doesn’t hold a candle to the levels of inflation these nations have endured. For example, Argentina is battling an unsustainable debt load while Venezuela’s economy has shrunk by 75% since 2013. Nice job fiat currencies!

Dissenters have often said that Bitcoin transactions are slow and expensive. Slow? I’m not so sure about that. I’ve personally had to wait longer than 10 days for money to arrive in my bank account from abroad. In my opinion, Bitcoin is definitely the hare while banks are more like the old arthritic tortoise…

Also, don’t forget Jack Mallers’ Strike app and the Lightning Network. The Strike app makes it fast and cheap to send and receive small amounts of Bitcoin. This is because Strike is powered by the Lightning Network, a layer 2 protocol that settles transactions ‘off-chain’ through a growing network of user-hosted channels and nodes. In fact, the Strike app has quickly become the most popular one in El Salvador.

Expensive? Start looking at organizations like Western Union and MoneyGram…the fee system is mind-boggling! Fees differ depending on where you’re sending your money, whether you’re using a bank transfer or a credit card, or even whether your recipient is receiving the money as cash or into a bank account. Also, one time a relative sent me some money via Western Union, I had to show my passport to prove my identity. So as it stands, the use of personal documentation is necessary to transact in the legacy financial system.

 Making It Together

Whether other Central and Latin American countries follow El Salvador’s lead and make Bitcoin legal tender remains to be seen. The reaction of the IMF and The World Bank is certainly something to take into account. Do they really believe Bitcoin is too risky and simply don’t want to be associated with it? Or do they see Bitcoin as a threat to the financial status quo and therefore their power and influence? Hmmm…

In my opinion, anything that shakes up the traditional financial system is only a good thing. Whatever happens, you can be sure that I’ll be bringing you all the latest updates on El Salvador and Bitcoin as they occur. Until next time!