What Africa Can Learn From Metcalfe's Law that the US Fastened Early on.
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Africa has commonly lagged its overseas Eastern and Western counterparts in terms of technology innovation and adoption, even on the Southernmost tip of Africa, although slightly ahead of the average African curve.
What did the Americans get right with past innovation that set them up to take the lead that Africans can hone in?
Today at a glance:
Metcalfe's Law:
What it is.
Its effect on the value of companies.
How Africa can take the lead.
The United States has been ahead of the curve with building value (both monetary, and social) on the internet. With conglomerates like Youtube, Google, Facebook , Twitter, Instagram, Airbnb, Uber, Amazon and Ebay amongst others all founded and scaled in the country.
All these companies, aside of being internet centric share another thread of commonality - Network effects I.e Metcalfe’s law
With regards to the ethernet, Robert Metcalfe, an American engineer figured out that the value of a network increases exponentially while the number of its users increases linearly because the number of connections that can be made between users surges.
This is the law that underpins the value of the network of socialites Facebook gloats, network of buyers and sellers Amazon boasts, network of short term accommodation seekers and providers Airbnb swaggers. They are all the same, and the Americans got this early on, and on they strove to build network centric conglomerates on the internet.
Take it further back to the 1870’s, where the Americans also got the edge ahead of all when they built on the telephone transmission technology, Alexander Graham Bell's invention that helped humans convey sounds through wired works. Now named AT & T was at the forefront of threading the network that helped people connect through telephone.
I acknowledge the variance with this case, being that the innovator of this transmission technology, was also the man that founded the first company that built on or around it ,but the idea still stands, quick adopters and innovators/builders of/on technologies that allow network centricity shape the outlook of their generation.
What does this mean for Africans?
Pseudonymous Satasho Nakamoto has gifted humanity with another internet, telephone like technology that those who build on stand to be the Facebooks, Amazons, and Airbnbs of the time.
Whilst I must caveat that, that can only be if the underpinning technology sees adoption at greater or similar levels like those of the telephone and internet ,the data is clear, bitcoin adoption globally in its first 6 years at 137% per year, far outpaced internet adoption in that same time period at 76% per year (average).
Satsho built a platform to transfer monetary value (called the bitcoin network) using cryptography and computing networks.
The key value proposition of bitcoin is the ability for users to transfer monetary value, peer to peer, without an intermediary like a financial institution or any party that might be at the intersection of those transactions.
The lack of non bureaucratic efficient and effective means of international and local transfer of money was not only an African problem, but a global one. However in Africa we struggle more because of the number of unbanked people relative to our overseas counterparts, and bitcoin, or bitcoin inspired crypto assets are at the heart of solving that problem.
The platform is there, and African innovators must build on it, the ones that do, if bitcoin evolves to be the bedrock of global finance, stand to reap the rewards of metcalfe’s law like the Americans did.
This is a leveler for Africa to take the lead, specifically Africa because this ‘internet’ is for us potentially an effective and efficient method of allowing the previously marginalized to take part in commerce in all forms one can think of.
It is our opportunity to lead the narrative, and the previous week I was in awe when I saw a South African based start-up had built what the world hadn't seen on the bitcoin network, a platform that allows users to interact with bitcoin via mobile, without the need for the internet.
Traditionally, to send and receive bitcoin, one would need the internet, but through Machankura 8333, in select African countries, without the need to have access to the internet, Africans can take part in commerce, with a minimal red taped albeit safe, censorship resistant, efficient and effective method. Africans can beat traditional bureaucracies to transfer monetary value locally, and internationally on mobile.
The network is still small, only available in select countries, but this is how Facebook started right?! How Amazon did too.
We need more.
It is time for Africa to lead the narrative - We must!
Talk to you soon,
-Kusa Nkosi.