Cryptocurrency Effects in Digital Transformations

Published

Blog type

5 min read
Kume Chibsa (Weekend Executive MBA 2017) Kume Chibsa (Weekend Executive MBA 2017)

Written by Kume Chibsa (Weekend Executive MBA 2017), Innovation and Strategy Executive and founder of Afrovalley Plc in Ethiopia, a Blockchain platform which drives socio-economic transformation and sustainable development through digital transformation. She has also set up BeatCorona a technology-led health sector transformation to combat epidemics.

The digital economy

Digital in today's world is characterised as innovative and cutting edge technologies that businesses use to address specific problems, transform existing/traditional business models, and streamline processes. And the economic activity that gets generated from the everyday digitised information is referred to as a digital economy. 

As the digital economy emerges, organisations such as Amazon and Uber are bringing changes across a wide range of human activities; how we socialise, communicate, commute, etc. And this digital world becoming even more vital as our global community tackles the social-distancing challenges of Covid-19.

Early adaptors

The first AI-Powered Education platform in China, Squirrel is one of the success stories of the digital economy that transformed the traditional education system in addressing global education challenges of equitable access and learning. It disrupted the ecosystem by bringing personalised learning based on pre-assessed student's IQ level and capacity, matched with required resources including teachers breaking the geographical and time barriers. 

Further to the quality of education, the growing rate of unemployment has created a socio-economic crisis globally while organisations, on the other hand, are struggling to fill up open positions. Platforms such as Upwork and LinkedIn are some of the digital ecosystems that have managed to minimise the inefficiency in the labour market by simple linkage of opportunities with talent.

Across the value chain, you will also come across MPesa that is pushing localised payment mechanisms by enabling the channel for the unbanked to move money by simply using their mobile phones, addressing financial inclusion.  

These marketplaces are also facilitated by the continuous evolution of the underlying infrastructure economy including Cloud computing enabling ease of access to storage, minimising cost of ownership and scalability as well as Edge computing bridging latency between sensors (internet of things) and central storage.

Beyond Cloud and Edge computing however, the biggest technology/infrastructure breakthrough is Blockchain, addressing the biggest society pain point of ‘trust’. Blockchain is seen as the next phase of the internet in transforming the trust mechanisms and social scalability, consequently reducing the cost of ‘intermediaries and concentrated power’.

Digital currency, Bitcoin is the first beneficiary and adopter of Blockchain and gradually Blockchain is estimated to host more than 60% of the global economy (including the Space economy). 

Sustainability challenges of a digital economy

With the acceleration of digital platform innovation and adoption, the ecosystem is also confronted with the following sustainability challenges: 

  • Inequality and misuse of Public Goods

As the digital economy accelerates, keeping up with the pace to enable society with equal access to technology and digital skills along with a regulatory framework to protect public goods (i.e. data) will be the primary challenge in order to avoid further societal inequality and misuse of power.  

While the impact of Deepfake is yet to emerge, we can't avoid the linkage and threat to the political and financial system which will have an effect on society and identities as a whole. Deepfake is a form of disinformation that uses machine learning techniques to create copies of people's faces, voices and writing styles powered by unethical use of digital media and big data. 

  • Economy of Scale and Environment Sustainability 

Platform economy heavily depends on storage and computing power which requires extensive amounts of electricity and cooling. Digital systems currently are estimated to account for about 3.6% of global electricity demand (more than the entire United Kingdom) and 1.4% of carbon emissions (approximately similar to global air travel). 

Annual Electronics waste is estimated to be close to 50 Million tonnes, worth over 62 Billion USD of which only 20% are recycled. 

The trend poses a question on the compatibility and alignment of two fundamental Global Economies: the green and digital economy. 

  • Maintaining the ‘human’ touch 

The digital world has connected people across the world making virtual networking reality, as we have seen demonstrated recently as companies move to remote working during the current pandemic. As communication and collaboration get cheaper and faster with the digital age, it has also created a reliance on technology diminishing the intrinsic value of face-to-face interactions. This will ultimately have an impact on effective communication and the required soft skills in business context especially in the era of ‘AI Enabled Work environment’ where man will have to compete with machines. 

As communication and collaboration get cheaper and faster with the digital age, it has also created a reliance on technology diminishing the intrinsic value of face-to-face interactions.

Tackling these challenges

In closing, the world is faced with tremendous challenges with nearly a billion people still below the poverty line, one-in-seven people globally suffer from some sort of mental disorder, and climate change affecting livelihoods. The digital economy has proven to address and transform these societal issues, and if we have to harness the full value, there needs to be system-wide change to minimise the negative effect of digital causing further inequality, disorder and its threat to our planet and the livelihood of future generations. 

My hope is to see collective actions to foster system-wide responsible platform leadership: from education reforms fostering horizontal cooperation among disciplines as well as a transdisciplinary approach to STEM framework, conglomerates pushing solution-oriented portfolios to the market, and government orientation and focus towards collective societal problems (i.e. instead of talking about the Automotive/Transport industry perhaps mobility as a whole). 

Coordinated action and integrated approach among stakeholders will ultimately play a vital role in designing and developing digital systems to help address societal and environmental challenges towards sustainable development. 

Published

Blog type