The government of Cameroon has implemented a centralized, insecure and potentially dangerous blockchain protocol and currency Trest in their project to enable the unbanked to transfer money quickly without transaction fees.
Unlike Bitcoin, transactions on the Trest blockchain are not verified by miners or any entity incentivized by the network. The developer of Trestor, Kunal Dixit, has said:
“The Trestor Network (T-Net) is not powered by miners but volunteers, because T-Net is not hostage to miners, all transactions are free and always will be.”
Trest-based ‘micro-economy’
As reported by CNN, 90% of the country’s population is unbanked, and the country has more mobile money accounts registered than bank accounts. Through its active support for the implementation of Trestor’s payment network and digital currency Trest, the government says it hopes to help the unbanked transfer money nationally.
Antoine De Padoue, founder of Socapssi and president of RDPF KUMZE, Cameroon’s minority opposition party, said:
"In short, we artificially created a Trest-based micro-economy. People were able to comprehend and understand this very new method of payment. They were excited and started improvising their own uses within the first five days of the pilot. We achieved quantifiable efficiency gains and the benefits far outweighed the negatives.”
The government’s first Trestor retail partner, Exchange House — located in Yaounde, the capital of Cameroon — is now completely functional, explained Padoue. The government of Cameroon plans to recruit 500 Trestor retail partners over the next 12 months, which they claim will create around 1,800 jobs.
Why not Bitcoin?
Despite its successful integration and launch of Trest, the government of Cameroon has received questions from the cryptocurrency community, both Bitcoin enthusiasts and experts. Why implement an altcoin, when they could just support and integrate bitcoin instead?
“Bitcoin’s transaction fee to the user was low but the real cost to the network was unimaginable,” said De Padoue, adding:
“That was a deal breaker for us. We couldn’t believe the Bitcoin network consumed about US$18.95 of electricity to process a single transaction.”
The cause of Bitcoin’s high network costs, however, is solely determined by its security and the number of miners that contributes to verify the transactions on the Bitcoin blockchain. Electricity costs directly correlate to the high level of difficulty and the large number of miners working to verify the blockchain.
Centralized protocol
The fact that the entire protocol is being run by “volunteers” who are not incentivized with the protocol’s currency means that the protocol is centralized, which makes it less secure.
Trestor has not released a white paper of the protocol, which would be required for a secure cryptocurrency technology. Finally, the code of Trestor is not open source, and the protocol has not undergone a standard cryptocurrency audit.
CTO and founder of India’s most advanced bitcoin trading platform in India, Coinsecure.in told Dixit:
“You may think that you are not a scam, but you are […] I have read that scary paper of yours. Do try to defend what you have at least on the forums.”
“It’s centralized from what I can see,” he continued. “It’s not even open source and you'll are plugging away with the words Bitcoin and cryptocurrency. But of course, am not in the act of consulting you, my efforts work with open source and decentralized tech.”
While the government of Cameroon has failed to understand the concept of mining that is the backbone to ensure the integrity of every cryptocurrency and blockchain-based system, the “optimistic” announcement of the government to integrate an altcoin into their economy could still be seen as positive.
In other words, Cameroon might still be ahead of the curve as one of the first countries to recognize the potential of cryptocurrecy and its disruptive potential.