master blockchain technology before competi-
tors and scrappy startups do. “There are so many
blockchain initiatives going on,” says Mr. Huiz-
ingh. “Even the largest institutions have to choose
what to focus resources on. What you see is
organizations working on a range of smaller proj-
ects—experiments or proofs of concept. Based on
learnings from them, the most promising ones are
continued into larger projects.”
He’s overseeing one of ABN AMRO’s five block-
chain projects, all of which are in early stages. To
expedite execution, the teams have created proof-
of-concept software program prototypes built in
part through leveraging expertise from the open-
Another major risk for project managers is scalability, Dr. van Rooyen says. Bitcoin limits the size
of blockchain transactions that can be processed
in a given time period (though the limits could
change). Projects using an encrypted currency will
need to either build their own systems that can
sidestep transaction limitations or adhere to Custos’ approach of designing a system that can move
from one digital currency to another.
“Bitcoin is the original cryptocurrency, and it’s
proven to be very resilient. But it might turn out
that an alternative cryptocurrency emerges as the
market lead,” Dr. van Rooyen says.
Until blockchain’s role in the financial sector
and beyond becomes more established, project
teams will continue to experiment with the best
ways to use the technology while watching how
competitors proceed, says Mr. Huizingh.
“Everybody is afraid that somebody else will
have the golden idea that will change the world.”
All figures represent real compound annual growth rate. Source: Lions on the Move II: Realizing the Potential of Africa’s Economies, McKinsey Global Institute, 2016
*Arab Spring countries are Egypt, Libya and Tunisia. **Oil exporters are Algeria, Angola, Chad, Democratic Republic of Congo, Equatorial Guinea, Gabon, Nigeria and Sudan.
Africa’s Divergent Fortunes
The continent as a whole is projected to be the world’s second-fastest growing economy through 2020.
But if the first five years of this decade is any guide, project activity will vary greatly by country.
Here’s blockchain in a nutshell: Information is lumped together (in blocks)
and put in a chronological order (a chain). Voila, blockchain. All of this
information is stored in an encrypted and decentralized ledger. Because each
piece of information relies on the chain, changing one piece of information
would alter the network. Since this ledger can be viewed by anyone with
access, the validity of every transaction can be verified by all users in the
network. So if someone tries to hack into the system, users can recognize
the invalid action.
But blockchain is not just a way to block hackers. What makes it really
revolutionary—and why financial institutions are so keen on it—is that
it enables people to send money (or other information) directly to one
another without a third party. For a financial transaction typically involving
a bank, blockchain would eliminate the hours or even days it takes for the
bank to verify the transaction and the fees a bank might charge. When third-party systems aren’t doing the validating, entire industries can speed up.
And greater security can bolster record-keeping—everything from voting to
patient medical histories.
Arab Spring countries* Oil exporters** Rest of Africa
2000-2010 2000-2010 2000-2010
2010-2015 2010-2015 2010-2015
0% 4% 4.4%