As the world grapples with the promise and pitfalls of Web3, it’s easy to get caught up in the speculation and hype surrounding this emerging technology. Many claim that Web3 is nothing more than a playground for millionaires, where memes and utility take a backseat to profit. However, beneath the surface lies a different story – one of genuine progress and societal shift.
The Power of Decentralization
Decentralization, at its core, is about addressing uneven value distribution. By providing access to financial services, education, and other resources, blockchain and crypto technology have the potential to level the playing field for billions of people worldwide.
According to the World Bank, 1.4 billion people remain unbanked globally as of 2024. This staggering number highlights the vast potential for decentralized technologies to bridge the gap between those who have access to financial services and those who do not.
Emerging Markets Lead the Charge
Africa is one of the regions leading the charge in crypto adoption, largely due to limited access to banking services. Even in 2021, around 300 million adults in Sub-Saharan Africa couldn’t access essential banking services. This lack of access severely limits people’s ability to conduct everyday transactions and invest – let alone run a business.
However, crypto is changing this narrative. Developing nations dominate the rankings on Chainalysis’ 2024 Global Crypto Adoption Index, with countries such as India, Indonesia, and Nigeria leading the way. As of 2023, Sub-Saharan Africa had the highest Bitcoin adoption rate in the world, with Nigeria ranking second globally on the Global Crypto Adoption Index.
Functional Use Cases
In emerging markets, we are witnessing the functional use of crypto rather than just its use case as a speculative asset. Local entrepreneurs with first-hand insights into local problems drive meaningful change, and new technological innovations fit for purpose.
Initiatives like CARE’s pilot programs in Kenya and Ecuador demonstrate how crypto can provide access to essential goods and services while fostering economic recovery from the COVID-19 pandemic. Non-fungible tokens have become accepted cross-border fundraising vehicles.
Acute Governance Problems Drive Adoption
Recent examples of blockchain adoption highlight the role of acute governance problems driving necessity-based adoption. The Indian city of Raipur’s innovative use of a blockchain-based solution to prevent forgery and reduce processing time from a month to three days is a prime example.
In developed countries, such issues would typically spark an inquiry or debate. However, in emerging markets like Raipur, the desire to solve pressing problems urgently takes precedence over lengthy consideration processes.
Focus on Fund Adoption
While capital flows into crypto projects in emerging markets are becoming more significant, they still fall short compared to funding available for projects in well-developed nations.
In 2023, developed nations led with approximately $1.975 billion invested in Q3 alone, with US-based companies accounting for 34.5% of all crypto VC funding. In contrast, emerging markets struggled to secure comparable funding, highlighting the challenges projects face in these regions.
The Way Forward
It’s time to recognize the potential in emerging markets and shift our focus towards supporting builders who are committed to driving change. Crypto investment should now pay attention to where mass adoption is happening – in emerging markets, crypto is a functional tool rather than a speculative asset.
Conclusion
Web3 may have its flaws, but beneath the hype lies a genuine opportunity for societal progress and positive impact. By focusing on the bright spots and supporting builders who are committed to driving change, we can unlock the true potential of blockchain and crypto technology.
It’s time to put speculation aside and focus on the practical applications of Web3 – in emerging markets, where the technology is already making a tangible difference in people’s lives.
About the Author
Ayush Ranjan is the co-founder and CEO of Huddle01. This article is for general information purposes only and should not be taken as investment or legal advice. The views expressed are the author’s alone and do not necessarily reflect those of Cointelegraph.
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