Practical Challenges of Defi in Emerging Economies (Devcon5)

[Applause] hey I think you know this the idea is for this to be a very interactive session so I wanted to go through first just real quickly as an example like what we what we're doing right now in Kenya and how we're trying to scale those kinds of solutions and these are all just pictures that I got sent yesterday from people in the field working all these currencies there and and then we're gonna play that bit of the game soon this this organization I started in 2010 and we started printing Gaucher's in Kenya as a means of exchange for people and we have been doing that progressively progressively told now we bellow the 6000 small businesses that use these networks I I started this work but that was me 20 years ago at Stanford at the accelerator I got super into agent-based modeling and I got really unhappy with trying to look no pentaquarks and it turns out they don't exists and so I started doing agent-based modeling and the idea behind it was that if you could change one thing about economic systems it was who it gets to issue the money and I was very connected with my my parents did a lot of a work and someone told me one day that people creating currencies which to know it was being done all around the world there was a book by Bernard leotard that started authorizing these ideas and this was like back in 2007 there were some numbers like this but no one really knew exactly how many of these little local currencies were existing around the world I so I love physics and I started going into economics and I wouldn't started studying these in the US and Europe and and there's a lot of actually super impressive systems I mean here in Japan actually a lot of the history community currencies started in terms of them being popularized even by the states in Nashville like municipalities so there's there's a really long history to this and really you could say that people creating money is it was how well I mean create local crisis was how all currency started in the first place and I started doing development work in Kenya thinking that well you know all of these solutions that we saw all around the world in terms of groups getting together and creating great endogenous local money like this would be a place where there's a lot of excess capacity and very very little actual medium of exchange to make liquid that capacity and goods and services so I moved into the slums this is Kibera but nightly I was in all sorts of slums across Kenya and we started getting together groups of businesses in those areas and just coming up with basic agreements and playing games like like we're gonna do today just as the demonstration and just coming up with what are whatever sort of rule sets we would need to make functional medium of exchange in the vacuum of the Kenyan shillings so when the Kenyan shillings doing very well you don't need the stuff but when it goes down can we create this sort of counter cyclical mechanism so that these guys can still trade their goods and services and and it's it's good to see when when does that break down and how we've been trying to bypass those challenges a lot of the their original art work I did in Kenya was based on the idea that there's a lot of a tea flowing into South another cutting mentioned smell over the world and that mostly it's ineffective there's huge amounts of middlemen that are taking you know 80 percent of the actual money very little it's actually people's hands and even when it does it tends to just be a band-aid it's not really building local economies and so we would work the idea this was that you're connecting marketplaces together so that people can build more and more on top of that and that money doesn't just come into a community and run back out that there's a there's a time for to sort of sink in and so there's huge amounts of like projects that we did where like in this example people were collecting trash in this community but all the businesses that were using these were the organizers of it the people would be giving out vouchers for sorting through trash when we're trying to clean up the all the plastic that is there's a lot of water and a lot of mosquitoes so this huge right of malaria in the area and some people would get these to collect trash they could go and use them at the businesses the businesses can circulate them and then there was some collateral behind this in donor funds in that case that was all great until the donor funds were over right and so that was like the one-year project where we were you know it was you saw about five times the circulation and the usage of the money so if we had paid people to just collect the trash we would have gotten you know one-fifth of the actual fact so it was it was a nice test so that was the first one I did this was the second one and this one ended up getting really popular and we didn't back it with anything we went into businesses just like I showed you before and we just said hey we're gonna create mouches for everybody so everyone starts with about four dollars worth of vouchers which is enough for about a meal and they were just going to voluntarily trade them amongst themselves and they had a system of kind of social guarantee where if you know the expenses and then stops accepting them back he had four guarantees that would go and beat him up or or you know not really beat him up business you know figure out what's wrong help his business if there's a problem so it was a nice to that community support mechanism and he had a huge bloom out of that there was a lot of trade going on we were you know we have grad students there that were helping to attract him serial numbers at the time and you know very low-tech bits stickers so people would know where to spend them we had quite a few schools involved so kids could pay their school fees this charcoal is just like a bun disease and it was going so well that people started also trying to bribe the police with them and then they took us to jail and it said this is you know like you know as we start to talk about like one of the challenges of working these areas as well this is so all of this stuff is very unregulated you know banks don't necessarily like it when other people print money and so with the central bank came after us and put us in jail and charged us with well a few things originally it was terrorism they claimed we were part of Al Shabaab and we were doing secessionist flux and it was a time where that was there was a lot of that going on in Kenya also so it was kind of bad timing and innocence eventually they charged us with forgery and we went through about six months of court cases and eventually the the Attorney General we did a big petition like all those projects I was showing you before they actually there was a meet-up in Japan just here a month ago and every two years there's a meet-up of all his community currency practitioners and researchers that's worth worth checking out so anyway there was a big international petition and the government was very embarrassed about the situation because it was it got to be a big news thing we were you know there was a there was a comedy show that was created based on this as well in Kenya so it was just it was like you know all these people in these places where the government doesn't help them at all no rights whatsoever were making their own money and it was circulating more and more useful to them than Lincoln shillings which were just there once in a while it was filling the gap in other words and then the fact that the government would come after us in this way was really good it was in in that being very very embarrassing to the government and so the Attorney General came out and said there's no law being broken here under Kenya Revenue Authority like taxation or the central banking Act and so that was like we were given a clean slate we didn't they also recommended that the central banks start to regulate these things and they so now that we've gone blockchain and we're not printing so much anymore they do actually like this a bit more because they want to be a bit tech savvy and so we'll see yeah so this is relaunching after that court case like this is one of the members of parliament here coming out and these are you know the people voting this is his voting law essentially so there was a lot of huge hype and then pretty soon after another five currencies around Nairobi and some more Mombasa this is the local chief this is actually two different school Headmaster's and and always there was this idea of you know what's what's behind these are back back then you know that there was no hard here T there was these a lot of soft guarantees you know is essentially a social backing without the ability to litigate or anything like that it was and and you would end up with a lot of often like traffic jams with these things like you know if you know like him here stops accepting them one day and we're all expecting him to accept them live let's say he just moves or you know it's businesses shut down you get a lot of this situation where people lose confidence quite quickly of them so you end up with this kind of stop go stop going most of these groups were about a hundred to two hundred businesses like that scale and none of you really grew much bigger than that and there was this general problem of like how do they know each other you know that they're accepting it and then how do they how do they build cohesion around us and a lot of those groups are also very tribal they speak a certain language and you know they really don't want to grow much and so you know the group size of your unit in fact even today we still kind of use that unit the tricky has been coming up with protocols that connect them together so all these groups creating their currencies and we'll go into a little bit of how that works okay like a twenty you shilling note here what was really gratifying to me was that this these knows we're changing hands maybe about twice a day and you know this is based on serial numbers way and we have actual de Manila to back that up and that's about the cost of a meal and that one piece of paper was facilitating about 700 meals new meals in the community a year and that just makes my hair stand up on them because it's huge I mean if you can imagine one piece of paper enables 700 meals over a year one physical little stinking piece of paper it's it makes it ridiculous what we're doing is humans in the sense like we people are not eating because they're missing pieces of paper it's weird right and and here you know we're talking millions of people living in this basic lifestyle where money is sometimes there sometimes not and the ability to barter it doesn't really exist you have this kind of coincidence at once you know you can't really always be trading you know fishing the water and things like that just it really doesn't work that you end up with a lot of informal debt and so one of the first things people do when they start using these as they clear a lot of those like 20 shilling debts that they've had with their neighbor for five years and they hated each other before we had an interesting study that showed that people who were like 300 times more likely to start doing gifting with each other after starting these programs they cleared along with that death and just you know so there's we do a bit of a branding when we go into you know like the first community in an area but then they start spreading it out from there this guy's selling water right here you know and what's his motivation he's joining because he gets an initial amount of credit in in the group and he's getting a lot more customers yes of his turnover is going up and up and up I mean generally we see something like an increase of about 30% turnover for business in the first few months about joining one of these programs yeah yeah I mean there's a lot of challenges around distribution you know like there's I mean obviously like there you could say there's enough money in the world like if we had one dollar in the world and it was moving at the speed of light that'd be enough right so we just have terribly inefficient markets where money is also just pooling and collecting in certain areas and so you know I mean if in traditional economics you would say well if there's supply and demand in the community well then you know prices of commodities should go up and down to whatever is remaining money should be enough but prices are not elastic right and so you end up with this situation where there's literally just a swamp of money maybe in you know post harvest season and then all of that money is spent on things like you know external stuff like sending your kid off to a boarding school or painful petrol or gaps in your car and so it just there's it's like a analogy of me humming a pocket like you've got a bucket of water and there's this linking pole coming out the side so you throw money at that problem but it's leaking out so quickly that there's nothing you can do to to allow that money to stay there long enough to build industry ISM in produce more employment and so a lot of these programs like the cash transfer programs you're dealing with giant holes you know in that buckets and you know like you would hope that the money produces enough capacity in the community to start absorbing more and more money and using it in the community but that's just generally not the case so I mean there's a lot of different factors to that you discuss more so we we go a lot through the entire supply chain mostly this is all - I mean really it's whether we go into a community we do a lot of training with the chief and elders as we as we go in but and it just becomes word-of-mouth at that point it would get something also I mean these are communities that are living on less than a dollar a day anyways so the quantum cash I actually had a lid on I rotated the center of the world or is living like these type of areas in detection throat so so they may have some scraps of cash around but it's the quantity that's really yeah yeah and so you know what's super important in these systems is some levels of social backing or local production local goods and services and so like schools for instance our baby schools or our primary schools they're paying tuition fees they're paying all sorts of fees and so those teachers can be getting part of their salary in these systems the parents can be paying that the teachers can use it for food in the community and circulate back to the community schools ended up being a good seat for the currency in in an ice-like matter of last resort a cooperative maize Mills is at least another thing that that was a really super popular were in like this group was actually working with Red Cross years before this and Red Cross coming came in and pumped a bunch of hashes to the community because it was a food insecure area and they had the community they are to train them to do collective farming work and dig water bands together and so they actually spurred a lot of really actually good healthy community action but they were paying for it directly and when they stopped paying for it all the system just collapsed again and so this was one of about 500 group so the Red Cross did this in and they saw what we were doing on the coast and they started their own system until like there was the one group out of this massive groups of farmers that started doing this they've grown to about 2,000 users now so they've gone to about 23 now and so they're spreading super rapidly and so what in this case what they did was they said well to replace that money in Red Cross we were basically going to create a voucher we give it out essentially just one air drop to the whole community of the same four dollars that four dollars can be used at this cooperative maize mill so they can bring their the corn to grind it and so that's the service everyone knows they can always get for it they would then take any excess so they would pay off their operating costs in that so they have some workers there and then any excess operating cost goes back to pay for those activities that they were doing the Red Cross so they created their own funding mechanism before doing that and so it keeps program and then all the other business start accepting it so as long as everyone knows there was actually some fundamental vacuum there that was enough to build that trust in that system so I think we're gonna go back to this idea of like your your piece of paper or your token is a guarantee against what you know and just how important is that trust Sam distribution shops this is a coconut oil this is just an example of marciana she's 64 she takes care of her family of seven she lost her her her daughter so she's the grandmother of those kids and she makes bujji which is like a porridge and basically if there's a huge there's there's quite a few periods like January for instance or maybe the the first week of every month where like the market is generally crashed and people don't have enough money to to pay for her Mooji but now she has a whole market of people that could still go in with these she can use them to pay for her kids school fees she can use them to buy her ingredients and so she has enough of a market now to stay so that her kids are less hungry they're there and they're going to school more regular reading capacity this is my co-founder Carolyn Delma and you know she basically goes into these communities she's generally one of the people who does the initial training with the elders and the Chiefs and the women and then she brings in a woman like that to go train the next community and she's been amazingly effective at creating like viral mechanisms where like this person gets incentivized to go any build the next currency in the next community and that next community can actually pay this woman with their currency just to facilitate and set it up and do the training so I wanted to do a game broke back here seven yeah so everyone's gonna get two fives and two tens and these are some of the currencies things that used to fit in it if you have a pen if you can write your contract on about sometimes you know like either a telegram our Twitter handle that would make you laugh so basically what you're doing you're meeting with money so imagine your business you've got a part in these nails so think about what you can offer so in this in this simulation here we're we're a market I'm gonna have you guys eventually all stand up and the idea is what could you sell to someone else in this room and let's say it's maybe a secret think it's advice give you know some tips on pull down things and whatever it is think about what what you can offer think about what you will need to buy and and basically go ahead and try to like find so I'm just going to give you five minutes to just kind of experience this process you know in Kenyan imagine you know you're a group of businesses selling different types of vegetables and shoes and imported items or services right everybody's done and I'm just gonna give you guys a few minutes long although we gonna ring the bells and you guys should stop treating everybody good everybody got some excellent yeah so if you would write your name on it print your name on the backs of them you'll see like there's the Norseman equal area on the back because again these are claims against what right if you think about this in Europe of business and you're using vouchers for your business services well you you should essentially be liable for those right so if you're buying and buying soft someone well they should be able to come back or whatever you have or someone else right sorry name your name you slash contact somebody else's land up with those and then they're gonna come after you gotta clear our debts like if you guys just a minute right print your names on the back [Music] it's pocket [Music] [Music] [Music] [Music] okay so everyone started should have started with 30 and you know who do we trust to make sure that was true we have some sort of central bank issuing money to everyone started with 30 of these vouchers they were vouchers for your goods and services right and you were training with each other so that ultimately they should be claims against you as a business and this is our demo for what we do and in reality in Kenya it's a group of businesses so what would be on the back of them would be the endorsement of that business Network and generally those are registered as like community based organizations in Kenya as a collective let's here's who thinks they are the richest in the room right now anybody so count your money who's God it was got more than 30 raise even if you have more than 30 okay who's got more than 40 or the money who's got more than 50 got more than 16 Kym's up here right and I'm sure we've got quite a few people along the way does anyone have none so many is down here actually sorry we started there Stephanie's actually going to be negative in our chart all right so here's our zero down here so what does that mean you know and how are we sort of like duplicating regular economics with this right like we experience some inequality now in the room but these are these are claims of Kim whose money do you have out there yeah but you have anybody in particular I have pity okay there she is so what are you offering so what happens in this case we're where she's she's got the credit by the community and nobody wants to go and buy back for her or maybe she's refused them you know like so what happens in that in that situation how do we clear these credits right and so this has been the sort of one of the challenges of these systems for forever where you create a closed system people start circulating these you create some sort of you agree on a credit line with people and if there's no real collateral here and they're like what's what's actually backing backing this so you know if it's just this social commitment do we have a way to take off any to court probably none right maybe we could go to our house and try to take some stuff out of it but you know that's not the situation you want to be in right like we don't want to have to go to Phenix house and start finding whatever you know value that she's sort of extracted from the community that she's defaulted on and so this this ends up being a huge huge challenge you know we try to solve it with social mechanisms but this can also cause a lot of traffic jams you know like Kim's not 11 what happens when Kim leaves town or and he takes some of that money so it's not moving anymore right or if we have a lot of people keep people way up here and you end up with a lot of these accounts dissipate so you know it's nice that there's currency for these communities that you see a lot of the same kind of problem so I just you know what pops to your mind you know who's who's issuing these how would multiple issues issuers even know about each other how would they know relative pricing so if you imagine like if you know me as the central bank here printing these out and issuing them fairly well maybe you trust me to do that but imagine you've got sixteen or thirty of these issuers within a region how would that work and so what we're really trying to do in like I I don't want to be the center of my I don't want to be the trusted party for this we want to create a system that's much more trust less right and so we need systems of price discovery and guarantees in collateral how would you put on chain collateral how would you put something that is a guarantee so that you know even if penny leaves the system and you're holding those bills so their claims against penny let's say but they also cool things against something else and so we'll talk about about like actually that I give staking dye into these systems which is something that we've already started doing and then also you know with paper obviously the printing paper I would never recommend it and it's not fun and are they national yes and there's a salt paid to the national currency right it's a soft bake in a sense with with these like you know like there is no there is no pool of money behind Meeks right we're just calling them vouchers four-engine shillings right so you know there's a there's a big challenge like they would usually they would use them as mixed pricing usually they would mix as in like numbers whatever you don't have in showings this is your top up so that's the most common use case is as a top up and then just on these bills you'll see expirations as well so every year we actually have liberal establish as it expires and if you want to keep using your vouchers you've got to come back to the group with as much as in the first place and then they do just get the next down on your on your vouchers if you have more than you started with they'll only stamp those that they gave you so it's sort of a credit clearing event of the year right and we want everyone to come and come back to level so we try to put in those mechanism so this this the idea is post stamp script and it was popularized like in Austria for World War and there was a mayor that started issuing these and he would accept them as tax credit and for the local like buff services and it really developing it really circulate extremely fast and it was outlawed by the months or two years and so the idea of spam script is just to basically tell people like this it needs to move right so it's sort of helping facilitate that credit clearing process you know like if Kim stays with these for too long they don't do them any good so there's a lot of monetary design that can go into the currency themselves and we can also put that sort of stuff on a you know smart contract so we've got 3.7 billion people are sort of not connected to the internet so how are they going to using the blockchain and we'll get into more of just the bump tune in general but 2.5 billion of those at least live with 3G or 4G signal so there's a huge huge population that has access to phones right and and these are mostly in our case it's like a little Nokia of push-button phones and so there's this thing called unstructured supplementary service data it's an interactive menu based technology and is supported on almost all mobile devices and it looks a bit like this you dial it what's what's called like a short code and we we have a server sitting there on the telecom that's waiting or the result is menu driven system so they can do I'll show you some examples this isn't actually what the layout looks like but they can do things like p.m. we have a marketplace so they can access their wallet you know look at their balances they can do transactions they can look at a directory they can actually enter in what it is they want to sell we can have a little ray system which I'll show you in a second so that because you know you're really limited in character so we can only show like the top four of each marketplace category so there's that you could say I want to look for food and it'll show you that day when top users of businesses accepting yeah I call this I mean it's it's a centralized stepping stone in a way I mean there's there's a lot of ideas where we want to have this completely decentralize we want them to be able to manage their own keys that just doesn't seem practical at least for the time being I these are some examples of actual users we've got Masai guys who have little solar panels that they stick in their hair sometimes and their training notes and so so USSD coming in we've got an awl something this is really simplistic and actually so big from simple is going to talk more about this and then we're pushing up to a side chain right now we've been using these proof of authority based systems and an X dye has died built into it it's a it's a hard spoon so there's and it's uploaded to aetherium so it's it's backed up on aetherium so we have the security of aetherium but that the cost for this is almost nothing it's like a ten thousandth of a cent to do a transaction on on that so if we can do as many as we want and they can clear in real time so this is you know I I basically send a signal to you I say I'm going to trade with you and both parties get a receipt within about a second maybe you know up to five seconds and so that's and the receipt is just an SMS coming back to both parties so what we do today we we are still in this process some grassroot economics is going in on you know either behalf of a donor or when communities call us in we go in and do a train and we we meant that to them for them and we we create an amount that's basically based on that population right now this is some one-step we're trying to get away from where we want them to self generate their own tokens and manage them themselves we're building those systems so that they can do all that work themselves and our work is just going and doing sensitization training so yeah and we're doing this this air-dropping for new users and then we also get donors involved and food security is one thing but there's quite a few other categories where we have donors that are already putting money into those communities we're trying to get them to change how they put their money into the community based on some parameters of how the communities using that money so it's giving donors a way to to actually get you know parameters or our impact measurements in this community so savings-and-loan groups and other key businesses like I showed you the schools like what you know what's your what's the vacuum you know it's a guarantee against what so you know there's still that you know there's a huge need for that social vacuum to be there and then all these community currencies are now exchangeable with each other as well and so we'll go into like what is those mechanisms we're also getting into the point where they're exchangeable to national currency so they ability to print collateral tank national currency let's say from a donor or from the savings groups of selphie they can put that they basically can buy dye with it they can stake that dye into a reserve and that that used these local currencies the ability to essentially cash out and in and we have automated conversion between tokens so each user right now when they go into the system they choose their community token and whenever foreign token comes into their wallet it automatically converts into their okay and that actually creates price imbalances between the communities and again we're using POA it's a side chain yeah okay so we're not going to go too much into the math here but the idea is that your price of your token is based on two things reserved so what's what's actually behind itself were in the situation now where we're just starting to connect this to die right so if you've got die and Reserve and let's say I have $25,000 of diamonds and I create a supply of $100,000 right so I've got a 25% here you can imagine right so my reserve ratio is 25% if I choose an F so f is a target reserve ratio so if I say F is once when I create this more contract I say okay we have a standard on what we're gonna allow for the reserve ratio to be and so basically let's look at it this way so so imagine here's this example where we've got a price of one to one with a reserve at a point so here's what we want to do we want to be able to create currency we love the idea of this sort of social backing it's very nice but it breaks down quite easily so we want a way of putting actual lateral into the system we don't have enough dye to give everyone all right and people just don't have enough money jobs so we need to like be able to create more money and it's sort of irresponsible to do that with just pure social knocking it's really hard for our groups especially as those groups try to expand out it ends up being something that you know may work with a dozen businesses well that know each other well speak the same language and as those start to scale and grow out it breaks down it's a lie you know doing this for 10 years with paper currencies you know groups of you know hundreds of 200 businesses that's about it a scaling beyond that not so easy so we've created dozens of these currencies all over opinion now the question is well how do we bring them together is there a mechanism to allow them to trade with each other but also how do we allow them to put real collateral into those systems and and leverage so you know red cross again this is pumping money into these into these communities already and generally that money just leaks right the back-right right out and can we have them instead put that money into these reserves yeah so just looking at this graph again so imagine you've got a total reserve for your to say you're a token creator now in the community or you could be a group of businesses that come together that are doing savings and you've got a reserve of Kenyan shillings there's their money in Kenya so we have an interface that goes directly from that same us as the men used to deposit into their own savings account that is in Dominic so this die so here's your die that's locked into this contract and then we're gonna mince four times back in tokens so if you've got a 25% reserve ratio you've got four times the leverage is that idea so we've created a whole bunch of tokens here and we say that they're one-to-one with each other in other words every one of my tokens so if I is if I started with 25,000 I know I have a hundred thousand die that's what I'm saying that they're one-to-one it's not dieting or it's my die right it's it's it's my token they name it themselves there's their credit essentially it's a credit against some some reserve so they we minted money here and that's what's really exciting about this is we need something like 2.

5 trillion dollars in the next like five years do any of these activities that the UN is specifying under like the sustainable development polls like to deal with refugee issues and that's also the same size as the World Bank's that couldn't credit gap like there's not enough credit in the world anyways at already in terms of demand so if communities have a means of creating their own credit and doing it safely with some actual collateral behind it this could be the solution for that and so that's that's the idea in terms of standing all this stuff and working with my profs Sembach Nick is is basically designing those interfaces right now of how to on and on.for have money in and out of these systems so the I'm sure there's a lot of questions here that one is what what happens when there's less and less reserves in that system so let's say people start pulling out that reserve well what happens is the price is going to drop down below so if we said okay this is this is essentially one to one with shillings call it a die shilling okay so once it starts dropping below a shilling so yeah I've been token now that's that is only you know it's let's let's say we're down here and like we get down to that farm progress so people are starting to cash out okay there's a mechanism so we can put in a smart contract that will limit how fast they can cash out that can be a choice of the community so actually what we do in Kenya right now is that they can actually only cash out ten percent of their their reserve or their balance so I love their supply if they want to cash this out into into this they only do ten percent a week right now and that's a choice with the community so the idea is that's their reserve if they own it they should feel as they're pulling that reserve out their price is dropping and dropping what does that mean well it means there's an opportunity for the next community over here to buy into that community so if I want to buy her tomatoes I'm in another community and I see that my currency is now more compared to person there's this sort of arbitrage opportunity and if I go and buy from her with my tokens for my community basically the reserve behind mine actually when she converts it to hers which happens automatically it that Reserve goes into her currency and it brings that price back up so there's a price stability among the communities when that when that happens and there's also an opportunity for me to go in order for her to say well I I can actually use my shilling now or a donor becoming say I can use my dollar showing I have more purchasing power with it right so for one shilling now I'm going to get more tokens out does that make sense of that drives it back up and so we're depending on basically two things or but depending on markets between communities in terms of that sort of market arbitrage we're also depending on the market in and out of the Kenyan show to stabilize those prices and in this curve this curve the shape of this curve depends on that reserve ratio okay and so right now we've actually been using 25 percent quite a bit here and we've got 12 communities trading with each other and they've all been very stable with respect to each other how long is that vein how long how long we've been doing this for about a year and a half now and the biggest fluctuation I've seen was about like a point eight to a point to area 1.2 which was a price gap in that those tend to clear within about a month of each other so it's I mean it's really interesting to look at those oscillatory effects so and there's also this sort of like concept of negative feedback right now it's just pure crap so I have a top-level token sensitive the dive you just have a temporary token it's not connected to anything and then I've got a bank account and we're just we're making that peg happen with the bank account right so we put we take that baby out put it into money and we just send it back and forth right now and that's not funny none front process to do it so eventually that the whole interface for how this thing works we'll just money systems and then like nick is also working a lot of areas where there's no there is no money system and so in that case he's working with like local vendors that serve as it's a good time to just show some have some slides yeah [Music] think about also if like the funny situation like imagine that he leaves the community or no one can get anything from her let's say she was representing a whole new token okay so this is a village people are using a currency but now all of a sudden like the main thing before we're buying and buying from it is gone I think like say the school breaks down or there's a there's a huge drought and or like the the water source for one of these communities is completely gone well people still have a claim against that reserve now is the idea right so it's giving them some talking and they can move that to the her community over here so the price of that new stove is going to collapse right her tokens value is going to go up if there's anything this community can offer let's say maybe not now but next month we'll need to rebuild or something like this well they can use that money back in her community and so this idea of like being okay with the idea that you know like the the value collapsing completely doesn't have to be a bad thing because it means that those people move their reserve somewhere else and you know like I think tokens should be able to fail I think that's a bad thing and if there's a community of tokens of currencies and that creates that in a market where where things can be more stable before you said that there was a need for like a kind of social backing like the school where you can be like the buyer of last resort for their respective communities right does having a reserve reduce the pressure on that like main social bathroom yeah definitely and there's like a buffer now so like if the school has accepted as much as they really want to at that point then you know like that people always have the option of cashing out and as they start cashing out that does start dropping the price and it also gives an incentive for other people that are putting more money back into the system and so like really you know like I don't think we're ever I mean with tokens in general like you you there needs to be something behind it right and even if that's you know that like the savings of these groups are also saving in these currencies as well so they have a savings in the national currency right that goes into their collateral but they actually demand savings also in the local currency and so that creates a demand as well and they actually these groups of women will loan into each other as well and they charge interest that goes back into the group itself so some of the extractive interest like like you would have a banks and so that also creates some pressure demand and we've had some municipalities setting them for like there's a daily business fee for for going to some of these marketplaces and so like if there's any demand for it at all then as long you know what if that price starts to drop down well there's always a point at which it's it's worth it to buy back in because you need to pay for that thing whatever it is that churches have started using these a lot for for like tightenings moms are using them for like opted at the end of the earth during Ramadan and they see it as like that but they don't charge interest on their so the different groups use them in two totally different ways and I I couldn't even tell you what half of those ways are I mean we've got a lot of grad students or teachers researchers have come up with those communities so but yeah this the idea of having you know backing is super important to me why the community currency and even over the last 30 years has been a very social movement it's also been very like isolating generally they don't want to do each other they don't connect to the national currency at all and there's this sort of wall you know like we need your currency and I press or move down there that's here again when I can just cycle it's always decide things in the community wants to every time in communities the whole yeah sound like they'll save up to something like like a group is I than 25 women so even within one code of a community you could have many many of these groups and generally you have like maybe a dozen of these savings groups and they are saving like one to two dollars a week per person and they get up to something like $200 and total all think so so generally having a cool chair guys they start loading that out so what we're doing is just saying well hey you guys can also start to leverage there's names that you have it's more credible because you know as much as the whole savings thing has been amazing in that across Africa like these nice tablecloth banks have actually done amazing work like Catholic Relief Services is one of these groups that have created a thing called still to saving some internal lending cooperatives and they do really amazing work and they do they do it all with it's like three choir notebooks that they cut with my razor blades and they're really amazing and I'm just super Catholic Relief Services does develop this thing called silver yeah which is perfect man they have a training manual and it's it's gone really viral because those groups go to train the next groups and they they get paid by the the next group to basically be the auditor of that group the trusted party and what we've been doing is just update so they use the national currency they use it and now they can also leverage of adding a tool to their set right now and that's how people might as well is this possible so like supplement the programs that give directly does so if our so Tony rather than take it directly directly he would give it to the reserves of the communities up in that leverage it as exactly that's totally the idea and and and be able to use the data for your decision yeah you know when we are like let's say red crosses is that a seeing that there's a drought coming that's a time to start certain feeding that that reserve they give it more value and they could also look at metrics like if you want to support education and and everyone's also got a wallet so you could just give it to them too yeah yeah just just so I could like Tyler this presentation whose yeah yesterday for my host family culture me I guess I'm gonna do a little bit of I like just to cover somebody up and stuff sorry so when I think about that were simpler simpler is really focused on providing payments into structured seconds into structures right financial inclusion in exactly sorta pockets that's really talking about sir one way on us just planets are just fun to call that's what I really love about what we're doing is that it really dives deep into like sort of the target economics it is so it's a lot more just regular banking system its battery be sitting you that is primary surplus it really still too high anyway instead of a life thank you even structure where the inside convenience from the ground up and really pretty much thinking one of them and I think this time of the about tells really exciting edges that's really the first time we're actually seriously angry do we be so loved so it's like alternatives like financial systems inside reason about their life complain about it because so this is not what I just go back to work it's a collection of 87 islands in the middle some of the most isolated islands all of the planners and also some of the most disaster-prone so we get no penalize this is just suitable I should show you so one of the nature of these provocative is class I love banking infrastructure is basically non-existent because it's just too expensive when you have its little small populations mistrust of the most islands to actually approach bank branches of a plan so there's actually more people who volcano on their land mass of the reason of a bank on their land mass there's more people who are okay note that there are facts so this is like something any it has to be really really challenging and so what we do is because the magical beauty we basically set up these entirely to deliberate since our communities where we have depend cards or based into place and the last people to spend things at local stores and then you can set up payments with the store themselves because it's a lot easier to get cash to stores it to have a higher level of financial inclusion learns to get buy-in to sort of which you would start and it's directly to your individuals in terms of vehicle perhaps a conference so that's the space we're finding the property sort of target economic sample is very talking about this is like a whole bunch of problems when you actually find do this in practice though because once again we're talking about some really reversed and watch like the Beatles sorry are these part of margination there that I wasn't gonna watch elucidation Ben wasn't okay it is the easy part to say raising ended you've ever heard of a pension I didn't know about a network of shared sugars that's where days it's like literally this misses after the set of islands and this is what Lisa's opposite from TV news report airline response spots on earth so the classic problem is is sort of internet fresh just to give you an idea of what the community sector you look like these are the sort of places that they fathers have so there's no mister 902 integration what we found is actually really common fatty lines that there is going to be three or four gene networks but they're going to be these commuters sort of lots of the fridges I don't know if you guys have ever experienced like potential connection what we find is really common in practice is that you distinctively have internet but in every day for like five minutes they don't be going for five minutes it's not at all so you have you know use in there you send SMS then yeah forget big assessment and so this is like kind of okay for a lot of things that are like serious or isomers sort of passions are we gonna put my trying to send an email is actually you know questionable internet but it really does break down for a lot of painful message because payments is something that you don't really have the privilege of going away it's an alien trust me might will come in 10 minutes later down T on the spot because it's being the person in touch so we really need something that's really quiet responsive and so what we actually do one of the things we've worked on with our communities it's actually using contactless payment cards the reason we use these is we do a little bit protective little decentralisation trial process but it allows us to basically store the data balanced outside the cards in such quality in patient transactions on the mobile phones themselves and then put through the latest age and so the main challenge here i think might imagine is just the risk of a double spam attack because if you if you draw maybe a penguin one store me go to another store and meter and personal identity internet right this very moment today storing their transmissions to think later how to beat insertion - you're the person hasn't actually just spent all of their money and the previous story now when you're like okay from it they've got no money left the great thing about these cards is that they've got your hardware on them it's not forged - graphic card whether it's heart attack with because it's a chip inside a card so what we actually do in order to like prevent a double spend a tactical level is that we recall the balance on the card in any given time and the balance consists basically to watch these humans consists of the amount of money that you had voted onto the card in total lots of so - the amount of money that you've had subtracting off in total so if you know ten dollars has been part of it three of them it's like if your remaining balance is seven when it goes the big challenge of these are the price you don't want people to be able to basically reverse their cod and all that in time so we record the balances these two numbers the first one the map learned it on is verified using the signature that's basically this beyond then we'll have a list of trusted testers except when the person grows up that Club in any one time a signature is loaded on a test internet fellows organizations that actually simply balance members names and they when they go to make the payment we actually use a one point count up all the Cod that is incremented that cannot be rolled back so it makes you can be pretty certain about the balances on these cause at any point of time and it means that when you go to restoring yeah Bendel's Northern College doctor to be out of touch so that some of the things are sort of playing in that's one community one of the biggest challenges were rather the down over this traditionally initiative sort of setting up networks at least like innocence regulatory capture which is basically the process of existing comments regulating any on you know your competitors pocket so I'm going to I think it's like super juicy enough you can sign something that isn't discussed enough is in tiesm it's like this fascinating story of ten mechanisms so here here's okay who can knows like how and pace of words okay so I'll go through it makes its origin story my favorite origin stories out there are dark men how much this is true to us and some people so the benefaction after the fact but I wonder this white circus elephant attendants true so basically in case it just started off as this quaint us sharing SMS credits among students and I joined feet there was a particularly strong offices around like wall this was necessarily supposed to be but in Kenya the classic parliaments in Kenya moment the classic moment mister face is that there's a high amount alert local businesses the twenties so you have people in like rural villages who send family members back to some of the large cities to actually make money read a living wage and then say that money plan and the process was saying that my point it was something of a tire versus piece that was started night ransom references so you either had a choice of getting on a l+ white yourself to send that money back pain in your backpack or you could go through some sort of delegated product versus I'm like a wallet away where you must basically also want to give over must trust that maybe hopefully they can manage to do that me if they don't and so mm paisa wallets what happens in study this wave same as sharing exist as credits or what people actually started to do is that you'd have these like basically informed chaos that popped up on both sides in the city and in local communities and someone realized that same thing is in a city and I work in the city and you're in the village I'm trying to invite to you I transferred my business by five dollars how about I don't even have my mobile phone and I gotta kind of image my lifeline vitals or missing it's critical HRG it's excellent and then she would send those five dollar business credits through akhil skin the village who would then take a small fee of those SS credits and then provide cash but Adam Emma in life on a swamp so basically this SMS credit transfer process was basically turned into a way of transferring but even though it wasn't designed to produce part of notice is what is really really cool and build with some warning destruction around that and that basically was only Hispanic places that we had today and itself where people were in just from a way of making affordable businesses to a way of making payments so now it's really really common to see these sort of set ups I'm sorry the images I've learned only have heal system that how these not was absolutely a nice so you can either send it to someone with phone number or they can have a little agent number and sir Kenya has a population of 50 and it was an absolutely flying success this or MTN was also doing very well undecidable just into Nigeria but they didn't go through the process of basically pointing Reserve Bank over there and what happened was that Bank basically completely from out of the young community by charging them fell funding them basically living all today and this was a process of basically the incumbent banks basically forcing these communities these existing telecom providers to play by their rules and this is actually one of the most common causes of bad of like a niece of the financial system into our country is just beg for salads to come and so have the ear of whatever we or is there and it's something with has to be pretty careful about wait we mentioned Savannah logic Cryptococcus II was actually meant a lot and the reason was that I wanted these so stands though obviously one of the whites now recently the Reserve Bank is just like and so one of the things were just like the holidays and you just need to spend a ton of time before your militia he sings just like speaking of authorities and sitting expectations around what's gonna happen otherwise increase your so spaced it so sorry this is one that I really liked but it's son what they never I guess I say sorry apologies right it's rebuilt a little platform working in the water spirit this is the Ricky G capital gamma the CARICOM it's compromised this is a really its tinderbox visit mapped within twenty thousand refugees for every five thousand wonders sorry the population studies just completely reversed respectively we it was a lot about that or that or were they really there and we went to this ping off system of the goal is really gonna work really really well so if any consular alright what week fan we thought there was that those an existing cash based payment process in place that was using different master cards that industry is religious sir and what could happened was that refugees are actually rotting and use across to recipients had no sleep because what's super fascinating about this this is someone coming yesterday but it's apply things like usually thought about this is the reason this breaks down the rate of light at the problem that actually arises here isn't one of security the committees we working would like to concert of life what would happen if you call absolutely love wasn't something that was super prevalent citizens changes comes what actually caused the real breakdown that happened as a consequence of this was that the entire control over the planets life actually swapped over from when you check your the how much they hate and then answer you in to being controlled entirely by the wind or and what this meant was that they lose were basically able to enter any amount into the Pantanal and then confirm it before they receive or it doesn't check the amount so the pin wasn't even up kima so much as limited security the P function of a key in this case nothing is probably true on a lot of societies is actually just to make sure that you have liked the process is forcing the recipient to be able to check the balance before they make your pain so we actually spoke to is on school I'll jump to the solution but I think this is really is really fascinating example because we talk about a system based on power confuse but this is what actually are every point pretty much for I'd say field force delight imagine if you were someone who was literate or didn't understand what would almost say it looks like this so some motion is a big flavor but the end of the day what we actually did with service personal water refugees and in medical condition lots of uses of nutrition is actually poised to 100% and recipients all towards the same thing goes very much the language is very much focused on smaller I said that wasn't that we want to have security use we've got your site route onions it was we want to be out to change in fact the planet before aggressor the last thing we want is what we receive people it's very deep about that says how much we're about to pay and then and then ot porridge cross to make that power so it's actually what we implemented this is a lady so it's actually had learning disabilities some really struggle group like regular literacy she's scanning a QR close it's very fundamental in the store and then they come up the checkers across the paper go through one thing we learnt about making install planners in this process and that comes back to the Internet connectivity is that you don't have the luxury of a lot of times when you're actually working to actually let the pain go through and this is something that really struggles when we're talking about decentralize finance why and my best guess is around after that woman so like we talked about like ginseng it's not much of a wonder if you think send something over they don't want to wait for a plane but if also stand here for like 15 seconds would probably be excruciating it's excruciating leave over to all of us so the point is is that like these papers in to have a really quick even when he thought something like POA that it just doesn't work and so just comes back to a lot more miss r'mante mystic settlement and wanting to do it that sort of speed which is something has a lot of that process yeah this one's super easy so we talked about you know basically trying to make repairs to vehicles what we found is that most victims don't actually have access to a bank account so repaint a lot of the videos became some scorpions as well and so we actually basically show these almost like shadow banking processes where we actually had supplies who had the quiddity their own rights that we could actually use to pay that the smaller defendants so Lisa's voice she's one of the big words been open to and she had she had a larger through those money inside the community and so was anger the necklace that officer swore bit doesn't actually come and what they needed to cash out that actually go to their transfer their credits poke that bit done and then receive money back one of the challenges around this is when we think of thanks but we think of them as in the absence of one total economic failure is basically hiding like a passion one hand what we don't even want the bank runs being like a very real problem on a day-to-day basis life kind of been a good run anything expected to be pretty regular for them to have mental physical cash to plan in the communities when he starts you so the shadow banking process the grid need becomes life is really like the constant challenge and you his stories of like it is totally normal for life please sort of like remittance Direction is run out of money with other databases so people have this expectation of life trying to catch down and then maybe they'll be able to do it on that day I already don't you maybe they won't be able to use the vendor just doesn't have any cash on them at that station and so what are the things we've had to battle with a lot is once you've actually started to use like a distributed network for payments is actually ensuring that all the elements consistent actually haven't especially special doubts and this is something I think so really excited about life I'm starting about to apply the oil crisis and say that you can actually stop this invasion but you're talking about how like 10,000 building housing facility that's basically you will likely also be rid of yeah yeah $10 there's the highest number you bill and if you walk around with that in a typical village or slum like you're gonna spend probably an hour maybe you know like trying to break that I just smaller than small beds usually it was almost like you would pay her for it and she'd be like hold on a second and then she just leave her shop there like she would come back to my community ten 20 minutes you know you hope she comes back yeah actually the worst thing is like your mic might tip to hear a foreigner and Kenny like if you care go change definitely do it because he won't give that back so I think that's everything I thought in terms of like the challenges we have to the price is very special I actually worked on my project to try to implement pass actually because after it was acquired by Vodafone they started rolling but it was in Eastern Europe and it wasn't really that popular mainly because well at least so I heard in Kenya it was popular because carrying large amounts of cash was also security while carrying the large amounts of cash in Europe is yeah right and one of the aspects is that like people are just used to having physical cash or settlements like there are some countries in which like that access to cash is very prevalent but there's still additional benefits for example of like you have cash but you can't pay your mortgage in cash right so they tried to actually implement systems much like to try to facilitate digital payments to increase access to credit and additional banking services but kind of like what's the relationship essentially between certain communities and their ability and willingness to go to the digital route versus like yeah yes sir one of my favorite stories in the city of New Orleans is when somebody hey organization I tell you woman but all I need in the Solomon Islands hey what whip down is life this is something pretty cool about the musicality of it's just telling anything for access their existence in many ways and this organizer basically we call the messaging around but money like just completely gonna fall and what they found was that like there's these stories of these people who dirge they're like what vehicles who had to catch them could act as these include any points and say he is my taser captain I'd like to rule all my money and so they control all their life savings but today that counts goal and they got a pretty cool banking place because it wasn't they wanted to be convinced that like is he cool cash actually existed this is a classic example of that breakdown but at least they put it back in that's a crazy thing because the communities that I worked in they did it which is actually because they experienced hyperinflation within their lifetime so like they would take it out and they would literally bury it this is so good nothing better watch who recently introduced busted my clothes yeah and everyone said the best thing about me plus it might not seem very little ground for moment that is the revolution but yet so many things that are like it really comes to answer like I think like even Japan is discussing example where this is still very much like a passage based economy oh right I really like what what secret is why the factor is like sense whether this thing is gonna want to components in our foster complex and it also has to do with the telecom provider yeah it was like example and and Zimbabwe you have an echo an app which has echo cash okay but you know in Kenya Safaricom is basically the government intends like is huge is faster than and in control of everything in so many ways so it depends in countries where the government is less influential didn't government of businesses you know that dynamic that really is really important I think the other thing is it's that flight I mean this is slightly digital digital financial literacy things and old banking like China bring everyone on to life in fact it's it all comes back to like what's what's the value proposition actually like having money to always not that that the composition in its entourage doesn't just because something's now don't make bail and what the number one reason that like Kenya words ISM soldiers problem apply to your any matters right people hated the process of like taking money from that day when we play gave money next bell abilities and this is something worth them as well by single there's about three things work notice of like to terms of use pants like how that utilize number three is cost number two is like trust how actually no mm if there's pregnant especially those in this one the number one thing that actually determines like choice of eminent colada is locality people just very good reason cannot be ballot to drive four hours to near that right so if you're in a community you know if you're in these like concentrated kind of European communities where you're not a nation around the corner or you know this like geographically everything's quite concentrated did this motivation of oh I don't you know I can get cash out like right now is something a little stronger or like the means but like finding a new process just isn't there as much anymore because I need to worry about kind of funny actually I live in Germany is this abusive the exact news report about rural Germany how they have these folks well cash in a car or the ATM driving around because they have to close down on these days yes it's fascinating their their attitude costly to operate and that's the country was also very cash driven so maybe this is not even an emerging economies know any problem I wanted to ask though the courtesy concerns of all this is that just kind of a first point problem and you have to give it up in these situations especially in the face of right the moment that it turns into an actual payment facilitator that means that the cell phone companies knows every single transaction that you did and that's a pretty risky information right there yeah this is like I this is something that we ways to work out using you can do an anonymous between as an individual and then die account but the reality is it's like the die comes a fool anyway right you can see every single transaction that's going in that is what the money or anything about that and so it's something it's something about things like not results won't put for us it's like how you sure this is like as far as muscle and how you reach those balances one of the things we found is that one of the big selling causes allows us to get around this regularly regulatory challenges that Reserve Bank you just a suspicion it's apparent like just totally terrified of being blacklisted by life like an introvert so that it wasit was actually called like this until like a year ago because they were just treated with it with the way they were treating regulation was too easy for people to want to be and the blockchain makes us a lot easier so it's like how do you match like here's something positive we got like this is like what is this what a supplement question to that so it earned that though it's like that you were talking with leprosy yeah Priscilla disease is there any other procedure isn't even relevant yes the nordic beasts it's like super inches Wow interesting about proximity and this is this is actually from the humanitarian space this beam is intense to basically like what these communities office not worrying that they're not worried about it they absolutely understand the consequences and one of the reasons they like the cards is the beautiful thing about a context can occur also how this is the only and that is used to prove that it's causes that it can be that simple which means that you don't have to have any honor and health information to prove that it's yours right if you have any tools that's how our wards work right I don't need to have my name on a wallet with my money in the toilet or magnet for people really like this and there's being a lot of cases in communities where some sort of biometric acts process has been used so that the varices architecting a photo of someone and people thought this we can begin to study to see you I can you know make a payment to go hang on you have my face expressions payment account and some insurers have tried to basically say that young people don't care about this because with usability is so much nicer because the example you NXT is biometrics to authenticate or they're sort of and your level going into store you want to get the food will scan your iris and they say that's okay because the usability is all supplied which is absolutely is why if you don't need to remember opinion by the you by your virus it's great but communities like absolutely that hate us because bringing up many days they're totally wider than its Donna may have moved across to the my government that basically made great achievements done and the thing is is that if they don't really have a choice like this is comfortable its consent and then there's like the local West it's a so if you're a person that life has no other good alternatives so like having those get the money the vegetables that people like well you cannot have your iris net or you go and stop Dominic that's not really consent why that's just coercing somewhere that's a female artist it and it's something that's just like like you know put all the projects at albany chiverses that all they're not don't worry about this that's absolutely not true so it's something that's like what you get this whiscash like you can easily divide it so you don't have one point of failure so you can leave how to cash with your family and then go and or shopping or visit card you take it with you and if something happens then basically just so we actually make it possible so we'll use these positivism for cash line programs so what I mean is that it's funny to see students like a weekly basis is more like no one has high value always cause of any one wreath forward collectively we follow the exact same process that you would have to do you ever borrow now which is the time is applied to one account and then ideally you have a secondary account as long directly tied to the card you have some highly educated labor that's less user-friendly or shooting by between two with that wants to get requests on thresholds of literacy there's a lot of independence and if those even put some context around why you guys did with the car because it was around an emergency would be right it's like it wasn't so much that it was manfully it was certainly late he was tied to this kind of play you know volcano erupts how do you get money into the ground without would happen to spend time register peril right and I think that's if it's something where they want to use as a community currency to circulated then you probably have a different system that he might think over a different process yeah living fundamentally cuts criteria becomes easy by because a con doesn't really 21 community currencies with everyone to the ounce Act is basically about to consume up and for a while so it really doesn't I'm sorry to mark back on the privacy issue as well but for a cash donation projects you do have to kind of identify the individual not necessarily through biometrics but like if it's definitely part of it there's a whole registration process so you do have to kind of create a digital identity to touch the imperium account okay that's fine this one's good I'm so much I mean I mean the real question I had after this is like that like so you have a personally identifying information and then the second part is like who runs the nodes of the side chains because you kind of manage the data and if you have the ability to do normalize every account and anyone who has access to that internal side chain has like basically everyone's entire financial history yeah that's kind of I was wondering like where does that doesn't really sit just because it's that balance of like decentralization but if you actually put it on main that it's like broadcasting your financial history on Twitter right now dude good yes okay well delicious not really yes sir we had real trouble actually doing like chaos 8 on each individual and the most common reason we found an etymology was this like people never spelled the same there was this particular city you couldn't actually develop documentation for each individual French across Japan but not I wasn't given a fool like hey what's each chip Acton sir like even people's takes a good deed by days months or even years between two data sources this is implied you know I saw the various fault by be able to conceal identity from the government it's inside the nature of life document keeping in these communities right oh and it means that these sort of processes of like to reattach not just don't really work so what we actually do is we actually we play a little game to the regulatory system and we actually tried to use dive is the dyes like the store of value targets on the entire system but we actually grant that innocent retirement that's second region includes a oneness and so you can only sort when you have a safe return you cannot to die is fully very very liquid toilet and even you're on that one list and so that one list is these people that I was able can touch it if you're not on the one is it still strainer with bindles on a day-to-day basis and we do kyc checks for the bengals but then you cut casually out of money just to talk about who you are and what i really like this it's basically taking one target of anything to things through different people depending on their level look very professional but it means fundamentally of the court means that we can safely give these targets to people and we can have you read our idea to lay up but because we know anecdotally spended that they said those who do not always having fruits and vegetables employed legal something like that and all our problems it means that we avoid one of those tonight sounds like where this doesn't tell us a lot discounts in the attachment private an actual Wisconsin so this news story might actually have been about your work but there was like a disaster natural disasters and kind of like hurricane and all of a sudden there was like a massive community need so that they decided to airdrop like actual payments directly to a community that had this type of program implemented right so is that possible only through kyc people or would you like have systems and which should you kind of like right we didn't get in everyone but we have a trust system that said it's like we have trusted parties that are what so kind of like is it that works well so well it's what we do is you end all the targets to everyone the toilet it's not the actual creature cards in anything you do do you koc on the Vandals I've had this assembly this punished for doing that you can find not used to giving street verified members so now we we sort of have that coverage does that make sense yeah it does it's us okay yeah and in Kenya we use the telecom as are certain problems we know their phone number they already went through a process to get that line and said you can identify with the person is by that point under and then we store all that information though opportunity and then the transactions that are right now are on a public long chain so if you do if you were to go in and try to find out the idea about that user by going to the community of doing transactions technically clippety you kind of have to be there in the community so I mean there there is a security level where there is sort of like a you know like point base of wallet management system in place right that it has that identity but then we're still using a motive ledger right now yes so regarding who's running the new digs we're on it we're on POA routes to the public subject oh you're actually doing it on the X tied chain yeah exec stuff supposed to talk to you choose accosted caught it I thought you're running here on the way out for this time they're critical yeah it's the same infrastructure and their weight little capacity so make sense yeah under quantifiable measures of content so what's headed the flow if there's a disaster I imagine that you gotta get everybody on board it right you've got the merchants on where the the users on worded so walk through just kind of the typical flow but I guess is it you work with the nonprofit's on the ground and they're the ones that are kind of on warning everybody or service so basically I mean that's that's doctor Publix of water metals and I mean simplest hypothesis around like carburetors company is that research cash transfer programs are actually really great like the biggest problem with life the reason we haven't seen my name cryptocurrency spend processes actually come up in practice in countries like me is one big regulation there is a road map and to assist whole star network what you can spend even if I had to and so cached programs are shoes many awesome white to to Sully's than more networks inside community because what we've found is that and you know if you tell them those we'd like to be onto this Sun returning cash program oh sorry you know something I know it's a lot of effort tell them there's like a whole bunch of money you have people who said with my pants who wants to get their father there's something a little Willie is now a difference and so we would use yours as instead of those networks did you enjoy all of that work but actually you're selecting recipient sweetheart you don't have a sort of way okay been a mystery selection month and if the main goose is like a just regular sources so that happens pretty good they're very crossly so the Red Cross will have like and I'll give you an example I could Malawi when it happened there was a flood or sometimes we can't get the money in the country quick enough we try to draw himself I've heard that pulling the cash across the borders and or extravaganza people's body so like we have to put in the context without we do cash delivery cash assistance today not everybody gets registered and you don't know who actually is get attached you have to drop it in a zone to be totally devastated and so you and getting this far is pretty remarkable and I think you know the nice thing about this project is that it cut down the registration process really quickly way already you're pretty defining who these people are you gave them a system that's also the community currency it's good to be business maybe you started building this network a Ganesh right where people are already registered and then I think they really sitting around airdrop and if there are lake droughts or issues since they're already on the network you can start issuing the coatings I mean that's the month they are they [Music] self wallet creation might say just out of the shortcode they were gonna the system before a great wallet to use within the networking that's the viral growth have it go into its limitation work as well but once people have those wallets but there's also information about them you know like so it who are they how are we going to airdrop - there's already that network there and people and self registered that these things up it's Christmas but I was wondering if is his in England Sicily were people receiving money they things not to turns out two ways that they were able for the supported so instead of the next morning for a community would be possible to invest more in their community visit I said this is the whole idea of like putting you know this idea of having collateral systems is to basically say well can I can we invest into the growth of that economy said if you remember this is some a bonding curve that we were using you know that the idea is that like if here's my price and here's you know my reserve and here it is you know here we're at a price of one to one with the reserve so if I'm an investor into that economy well the more demand on that there is the better so as that economy grows if they're exporting that those prices are going to go up and I can extract that off like if you're an impact investor you could donate have profit back into the community and and even you know using this initially as a tool for remittances so I that's at least all of our segments how we're thinking about this is sort of a an investment opportunity to bring in private equity you know like Red Cross doesn't have enough money or to get to do all these things and bringing in private equity to invest into the into these reserves so that's it's similar to like investing into the collateral of a microfinance for instance right like they need seed capital except there's a way to inject seed capital into these currencies there's the potential to really grow these economies much more what am i one of my favorite things of service come out of these difficult exercises in these emerging economies is the clumps of life water plants like daily needs and so this is really innovative program ten kids in Kenya where this organization is committed basically means selling efficient hot water is to leave these operations and not knowing that you can afford to bank the bank this advice on the spot because it's quite intensive it's something's gonna get in return that family in the long run what better than the existing assistant my hiding place and so what they do is to buy who could up to your old man taser account and it just takes out a shiny penny each week for my favorite aspects of life the ural site and this would be something that would just would just be impossible to like collect these 400,000 people wanted to be there's no way they connect to sensitive I like them a shilling at a time around these movies on a monthly basis and so by just have you talked to this like to your packet system it actually is now feasible in the way it wouldn't be but I think it's fascinating something was just multi-storey process is going to be : yeah and capacitive loads as a mobile lifting system and they do solar panels and some pirates the point about this investment scientist just a little bit more close with that he made the world wide and turn budget is about you know twenty nine billion dollars a year and something up one percent over the last year but the funding gap is over thirty something billion but you look at kind of funding flows you have like Romanian sit around us five hundred and fifty billion dollar difference and like foreign direct investment is about the same about between those two is about about a trillion dollars or so are there millions of foreign direct investment and then you have and so the point about getting happy to be able to play in that humanitarian and development assistance opens up this kind of floodgates of financing and that's what these systems allow for their alt communities built the JCC value because if you invest in one community it helps the other network it has like this network effect and so as an investor you can invest in one or two of these communities and see the up lift cutting around and get your cash out eventually that's directly I bring this money because ingress you we have social point of some politics which upon the book is there like this community that use it that social point development so much that it was but for an instant involvements problems acquire morning by taxes investments on health infrastructure and having else the good papa a huge amount of investment and we're speaking about government voltage being better applied force of impact on we do sell information on all the morning books for that do you have any models for that or even purple types of this water well I got some agent-based models that you can find online we go and are on github as well so you look at that and then there's a lot of modeling around bonding curves right now coming out lock science is doing quite a bit of that work as well which is pretty cool in the body curve we're using as condom we basically formed the version of the was originally the bank core protocol and it's got a very simple set of equations on it but it's been battle tested I think dollars yeah x5 but yeah just just so if we wanted to don't need get involved like what nonprofits is it Red Cross is very prostitutes out here like what are ways in which like it sounds like you're like a tech startup and I don't know you another problem a profit yeah but like what are ways in which we can participate in the uh things so I can see what things that all of us working on project including parentheses that be are building this global open source platform to allow any organization to do this network and the Danish Red Cross where I'm from and we've brought together their breakfast Network along with Accenture and other groups to build this we're looking at like 70 different countries today so you can either go through Red Cross you can go you know to one of these kind of scary and or put it in the head directly to the higher I mean you know there's lots of rails community but we've got you know to really move the market in some ways in some ways but it also doesn't have to be custom it could be what $10,000 it visit seceded see to cooperate or 5,000 so it just depends on the quantum of passion what's the project called community including appearances is there an obscenity I mean even in terms of community currencies even a grassroots economics the president's economic field - what we've been doing for the last ten years or so and this is sort of scaling that up and you know our organization is really trying to just - all the awareness and critiques and do the documentation and train you know and go and bring the trainers of trainers about next organization right Nellie's they've just open source federal platforms so like all the stuff about bringing in USSD all these payment rails is what piece is working on so and that's they're looking for PC I believe yeah I think that's really exciting because they're basically saying we have gear Snowden source platform that we're building along with Red Cross and other other partners and they want to be the cheapest rails in and out of that system right so they're doing the emoney licensing and all that stuff so I think that's a great investment on that side to end and for us what we really want is the ability like something like emo where you can just or you can say look here's $200 to see the reserve of this woman's burger for instance you know those types of thing like Audrey onic funding all these always kind of cool really perfectly it is just saying we're going to push some money into these reserves and that's exactly what Rick Ross is doing as well like how do we parameterize and how do we give cash I went out to communities them with impacts them there's we have a have a website www.rinaldin.com that you can look at just some of those might impact measurements a little about CC this is just the last year you've got about like 70,000 transactions on there and you know we've we've anonymize so you don't know who they are but you can look at the wallet ids right and so you actually download that entire database of every single transaction you know the gender of the both parties you know the products of both parties you know what they're buying it's a huge data set I mean and we just know that this is this is among about six you know like five thousand six hundred users right now and their duke they've got about 120 k USD of transactions just in the last few months and so like the systems are starting to turn out a huge amount of information since and that informational all relates to things like food security education you know what types of food are they buying nutrition and all that kind of stuff so you know picking out like sustainable development goals and be able to say these try out transactions relate to these walsh outcomes for instance for water and yep there's a huge amount of work that needs to be done you know to resume play also like customizing localizing the systems like once this platform it is really rolling and you know ideal even by and November will have I mean things are working but it's like sticks in Buncombe is pretty good once that's up there there's that there's a huge need for customization or data analysis or prediction for you know marketplaces you know like so bringing this to Bogota in Colombia you would probably want a GPS app that's gonna tell me where to go by or how to use your currencies and marketplaces all kinds of stuff like that so there's it there's a lot of players that need to be built up and localized completely and so hopefully that's you know App Store s you know American concept plugins 440 else and it's really been hit with my process right now especially because you have to go through the banking service it's the bank service is discharging about 20 percent precision light it's basically managing organizations like transferwise the program especially by the computer imaging we do if I'm trying to save money between when Australia which might save money for my astrology in the US will rather than going through the banking service you have my money and I had mules in the dump which is really fun obvious that middle prices but it only works in places you only allows you to keep making processes and places where this symmetric flow of money in both directions right safety you've got more money flowing in one one way and there's nothing to match so the person strikes down the really cool thing about these one because and what we're doing with one cryptocurrency once you have the mental network on the granite you don't need a matching so you can do a submission place of money into places like Kenya and we do some things to them all started a well we basically repaid we repaid to the local currency using the synthetic assets and tech the cencon support died us and then we do that to die again so good that it's excellent I've seen that people are exposed to like exchange rate fluctuations and that repainting process a lot more efficient than what goes on in regular markets because it's basically a contention three years one solid shows so we think it's interesting things that could be done every day portable sale just to totally change the library financing and get money to yeah actually I was going to ask about that because people are exposed to us Stalin or priceless as well did I and what is it like because most developing countries that have robbed they used the US dollar except obviously their governments would probably fall apart if they did yeah so isn't there kind of like a balancing act to that if you're very successful and if you allow people to essentially completely escape the shackles of their own like local currency wouldn't they just yes two answers to that one is that we tend to like we've noticed people often we don't we haven't worked between yet with it's being like monetary value or some financial support that we like working communities with actually that asset of their budget system works well and the reason we do that is because then we can use this synthetic asset process to paint a local currency and that means that a government retains control over that monetary policy so if they want if they wanted bodies usually don't well the closet they can see by order of language you just biking are pretty and it might dare a meter and there's nothing leaking out system or distort that that's just an assault pragmatic choice of second or that what that is the way you don't know someone since the way you might not want yet so yeah we have way to get to operate reflects life right as well right can you there's there's a blockchain task force there you never been there they're very excited about this potentially you know creating and shilling additional and chilling writing their own and and treating these exactly as they would the private banking world renovate they create reserve currency banks can leverage that just like they do now like they have ten percent reserve apartment right well we're just saying put that on chain and make it on it's like because you don't really know does the bank have ten percent reserve or not and the bonding curve gives you transparency to that situation and so we can basically say well let villages or groups also applicant everything's if the government wants them to have a reserve requirement wonderful that's a great situation now so they've just allowed communities now to act as their own banks and that would be a huge win so I can see you know like there could be a lot of play in the regulatory environment if they want to start regulating this in that way like having some insurance or you know collateral departments in their own token wonderful I could be able to wonderful way to bring governments on board and I mean I don't think Chase Bank should issue dollars in or or in Kenya and like Wells Fargo should not be issuing shillings they should be issuing Wells Fargo shillings right which should be on a bonding curve and they should be honest about how much reserve a of it they start because we've got poor banks over issue supply of credit and go bankrupt in the last four years and it's caused huge apartment across the ground meaning that this the whole world doing this so if we can create honest baking this way you know and redo how we think about fractional reserve and put it on the block tonight anything that would be a huge win so I like I tend to load this thing into that sort of like there was a movement towards like transparent fractional-reserve things like the concept of my point or some sort of global reserve like that creating financial food actually be used like a process and religion economics is just a like a totally - including is just that it will help saver with its focus and things like my communities other eventually need to work with the artistic and so if you're if you're talking about slightly something I've declined to shift money efficiently in between one community Ella you need to take the course your group will go through some sort of exchange for assistance with a bank to then convert that into your local currency you basically is that you're going through existing banking persons in a all you've done is add an extra layer so really really sort of synthetic ization processes of these ideas are preyed upon challengers this is your anyway this is actually very prototype for those ago this is cached becoming more and more the way like that become more and more common among the ways that's right except your cue okay sorry Red Cross is that something that has happening more and more just like straight caches the global cache markers the Red Cross accounts for a billion dollars a year this ends in I'm lazy growing quickly together across I mean actually it wasn't part of it the the United Nations about 2.

6 billion so and it counts for probably like it he about fifty percent of our overall aid and it's growing I mean forty percent is that like I don't think it's quite a forty percent because that's usually mean that look like you're doing your a year of data some tables in your stress level cache so I'll read that realistic goals Amazon capitalism doesn't mean I don't know because you get cached different ways it's like catch together we're going to take how do they actually technically what that caches so I'm saying the capsule ending out whistle - it's about four points but whatever the little load of money so it's yeah I worked a lot with these days but I like my specialty is cache memory so I think what's important to know that's like not immediate knowledge in this space is that the Unitarian Summit had a bunch of commitments grant market market college from the world's biggest donors but also from the members of the United Nations in local government saying that and one of the number-one priorities today is to live is to deliver the maximum amount of humanitarian impossible in the form of payments so whether it's cash in hand whether it's like debit cards whether it's using a blockchain rail whether it's paper vouchers that's that's considered the gold standard and a lot of growth but the problem is that those actors that are delivering don't necessarily know and are not necessarily aware that there's not a technology that's like programmable money that can be passive an untapped market of like endless uses for the blockchain sector my my video will Telegraph is eat and be why w NJ dummy somebody's will spin estas bully and Will's [Applause] you