"I live in Nigeria". That is a sentence in 2021 which is enough to explain all the apparent problems that citizens are experiencing by way of bad government policies grossly affecting the economy and thus undermining the ability of citizens to create wealth. It is the proverbial saying of: “throwing away the baby with the bathwater” as seen in the singular moves of banning the sale of crypto for fiat (Naira) using the local Banks. Then, banning Twitter! Arrrgh! Well, this article is not a Political discourse and quite naturally:

“I’m not one to complain about situations beyond my immediate control and ability to impact”.

🏋️‍♀️

In this article, I’m going to make a submission on how Nigerians and Africans at large can leverage the web3 technologies and “act outside of bad government policies” to create wealth and achieve democratic consensus in tandem with the rest of the world. Unfortunately, many African countries are at the mercy of bad government policies!

In this article we take about:

• What is the web3 - Explain like I am 5.
• Why do I need to pay attention? Crypto payment use case

Enter the Web3!

I’m going to explain the web3 as I would to a 5-year-old child. Let’s call the child “Themba”

Themba: What is the web3.

Me: {Struggles in my head as to how I’ll break down terms such as Democracy, Open, Trust, Transparent to a child and then takes a deep sigh} Themba… Let me tell you a story…

Themba, you recall the story I told you about the Rat and the Lion and why Lions do not eat rats? {Thema nods heads affirmatively}. Yes. I told you that the Rat released the Lion when he was caught in a trap net and the Lion promised not to eat him and also he mentioned that his descendants will never eat the descendants of the rat. The Lion gave the rat his word and he wrote it down on a piece of paper, and also he shared this same piece of information with other Lions and the rat shared his with other rats. That started the process where whenever a Lion sees the rat, the rat simply showed the Lion the piece reminding it that it cannot be eaten. Each encounter that they have is recorded on a large register and all Lions and Rats have the register to make sure no Lion eats a rat. It is a very large register when every meeting is not noted and bundles together and whenever the Rats and Lions want to know what happened on particular days there was an exchange between rats and Lions, they look up the information in the register using the bundle information. The is the web3 for Lions and Rats. They hold a piece of information, you can think of this as a Smart Contract, each encounter between a Lion and a rat is a transaction and it is written on the register which is a Ledger. When the encounters (transactions) reach a certain number they are bundled and that is a block. This makes it easy to look up information. The blocks are stringed together to keep a chain record. Making up a network (the Blockchain) where Lions and Rats hold consensus on a contract that Lions will never eat rats in an environment called the web3.

It is an OPEN process needing no INTERMEDIARIES and it is DEMOCRATIC. The Lion and the Rats agree and do not need other forest animals to ensure the Lion does not break his contract. The record exists to prove this!

Yes, that is exactly (well, maybe not so exact) what the web3 is. The most popular use case globally and which still needs to be harnessed for Africa is payments. Cross continental payments and P2P for daily transactions. Payments in the context of the Rat and Lion is then a contract which indicates that every time the Lion and Rat meet, they meet to exchange money as a form of payback for ancestor Rat saving ancestor Lion!

Solving the Money Problem

This is where I explain to you still in technical speak, but using technical analogues what the web3 means in terms of payments. Crypto as currencies on the web3 is popularly called is a coined from the root word cryptography. Which also when further broken down is formed from the word cryptic. Which means a message which is difficult to understand without clues. When a cryptic message is sent from a sender to the recipient, the sender must add a key to the message which the recipient will then use as a guide to get the meaning of the message. Thus ensuring that only the intended recipient gets a message and no one else. This is a somewhat oversimplification of what cryptocurrencies are in the light of cryptography. The point here is this: A cryptocurrency can be regarded as a number of cryptic messages written originally by miners who then send out these messages to people who want to own a piece of each message and hand over the keys to read the messages, each message (in this case a token) is regarded as a store of value and is given a price figure because it has the following properties: No one else can access the message asides from the one who holds the keys. Not even the miner When a person does a task, they can be paid using a piece of the message (token) as it is an agreed-upon value exchange commodity. It is a lot like trade by barter, wherein in this instance, I can give you a piece of cryptic message (cryptocurrency) which no one else holds in the world. A duplicate copy cannot be made of it. There is an open book (ledger) distributed globally which tracks the transfer of the crypto-message from one hand to another.

When a user can grasp the importance of owning a piece of these crypto-messages, understand why it is a store of value and wants to own a piece of it, a user will then have to join the web3, which unlike the web3 has its own particular protocols, tools and interface.

How to get into web3

In this context, getting into web3 means: “How do I convert my fiat currency to cryptocurrency?”

But first, it is important to understand that, the first set of crypto and up till now was created by miners. Now, you can buy from someone who already holds crypto to own a piece. You can also mine, though the set-up is quite expensive. This could be from a crypto exchange that you can give cash and in exchange you receive crypto. Right now, given the recent ban by the Central Bank of Nigeria on the use of crypto, you can no longer connect your Bank account to crypto exchanges to purchase crypto. There are a number of exchanges, you simply have to find the particular exchanges that serve your country.

You still are able to open an account with one of these exchanges and purchase your initial crypto from other vendors on the platform. This method is called P2P (Peer to Peer). With P2P, you send a request to purchase crypto after you have signed up and completed KYC on the platform. When you sign up with an exchange, you are given an address to hold your crypto assets. This is called a wallet address. When you request to buy crypto, you are then given a list of crypto sellers that you can then pair with, who is able to supply crypto on the exchange for cash. You then request to trade with a selected user and then they provide you with their account details while you provide them with your wallet address generated on the platform. The amount of crypto-asset you are purchasing is valued in fiat (like a forex exchange where you can see USD and your local currency pair). You send the money to the seller’s amount and they send the crypto to your wallet address.

There, you made your first crypto purchase! 🎉

A quick search on Google will return the crypto exchanges operating in your country.

Conclusion

I set out with the intent to explain the web3 to you without the mention of crypto and I achieved this using the “Rat and the Lion” story to explain contracts and transactions. After laying that foundation, I then explained web3 using crypto. Crypto still is the easiest point of entry into the web3. There are other use cases that I will share as time goes on.

I do hope you learn a thing or two from the article! Let me hear your thoughts! You can Tweet at me, Let’s connect!

Fun fact: It is said that Lions do not eat rats as the calories reward for eating rats will not fill for the energy expended chasing them! 😂