Searching for “Crypto Valley”

This May I flew to Zug, Switzerland, to meet up with my “Blockchain Guru”. For the sake of his privacy, I’m going to refer to him as “BG”. And yeah, it’s an inflated titThe year before we had been working on different startups in the same accelerator. I overheard he was into Bitcoin and recorded an interview with him. The price was hitting all time highs, around $2,200, and I wanted him to tell me if I should buy.

“I never tell anybody to buy or not” he said, and proceeded to Socratically lead me on a three hour discussion about finance, cryptography and scarcity. In that interview, the potential of blockchain crystalized for me. Whether Bitcoin peaked at $2,200 became inconsequential- it was a cause worth supporting.

BG and I had a few more expansive conversations, but as a CTO, his time was scarce. He felt an incredible amount of responsibility and pressure to maximize his talents for the startup he was with. At the end of summer I returned to Tanzania to run the operations of my startup,, in Tanzania. During that time, the NINAYO online trading platform struggled to implement a payment function. So I was thrilled a few months later when BG called wanting to come to Tanzania and work on NINAYO.

Zug, not “Crypto Valley”

We decided to meet midway between San Francisco and Dar Es Salaam, and finally visit “Crypto Valley”. Zug was stunningly prosperous. But there are no coders there, no nerds. There are no Bitcoin payment functions anywhere, except an ATM at a ritzy hotel. Its a regional tax haven within the international tax haven of Switzerland. The banks in Switzerland are well established, as are the payment functions. No one needs cryptocurrency there. The Swiss Franc is strong. Zug provides tax havens for crypto companies, which is great, but it does not merit Zug the title of “Crypto Valley”.

So, after a very pleasant ten days around Zug, BG joined me on his first trip to Dar Es Salaam, Tanzania. East Africa is known as the cradle of civilization, but it’s had some other major accomplishments since “Lucy”. It’s also the land where mobile money / digital currency, took hold.

BG and I paid for our first meal in Dar Es Salaam with Bitcoin. To be fair, as in Zug, we had to convince the retailer to download the app. But in Dar Es Salaam, the enthusiasm for cryptocurrency, and fintech itself, was much more apparent. Everywhere we went we saw “Wakala” signs. “Wakala” are the cash in and cash out points for digital currencies, like M-Pesa, Tigo Pesa and a handful of others.

Check out that fragmented market full of “Wakala” signs

M-Pesa is a digital currency, but it’s not a cryptocurrency. That being said, it is routinely used in Tanzania. Eight million Tanzanians regularly use mobile money. There are 79,000 Wakala agents, so money can easily be cashed in and out instantly. Last yar, roughly $30,000,000,000 was transferred through mobile money in Tanzania. And there’s good reason. Only 15% of the local population is banked. Digital currency solved a major problem by eliminating the need to hand deliver money across great distances. Sure, the fees may be hefty, but so is the cost of a two day bus ride to give your Mama in Kilimanjaro the money she needs for her farm, medicine, or whatever.

I’ve lived in Tanzania on and off since 2009. I’ve seen how mobile money changed the payment landscape for the better. It’s a historic disruption. I use M-Pesa to pay our NINAYO team each month.

However, the mobile money products like M-Pesa are still far from optimized. The interface is clunky, the API’s confusing, the fees significant and the customer service abismal. To integrate a major mobile money provider on the NINAYO site, we had to arrange a representative to personally come to our office and negotiate the rates. “4%?” “0%?” “3%?” “Please just give me the lowest rate”. These exchanges are maddeningly inefficient! This should all be automated with price transparency for all.

As much as I might wish it, the “Rift Valley” is far from deserving of the title of “Crypto Valley”, but in ten years it could be. The population has been comfortable with digital currency for a decade. Its once tech illiterate population mastered a convoluted USSD system of lengthy smart codes- because they needed to.

Private keys? Hakuna matata, bwana.

Looking forward