GiveCrypto Monthly Update — May 2019: Hurdles, Victories, and Dreams from the Venezuela Ambassador Pilot Program
Since setting up the Venezuelan Ambassador Pilot Program in four locations more than a month ago, we’ve seen different levels of progress in each area. We knew this would be the case because setting up a new location isn’t easy. There’s substantial effort involved in recruiting a vendor that will accept crypto payments, finding trustworthy ambassadors, training participants, and responding to questions and roadblocks that arise.
But despite (or maybe because of) these difficulties, phase one has been extremely informative in helping us identify a fertile location for the development of a crypto-economy. In phase 2, we’ll use this knowledge to scale the selected location(s).
This month, we’ll give you details on what we saw and learned, as well as share more about phase 2 plans. As always, stay tuned on Twitter for up-to-date information on the pilot program.
Learning from Unexpected Behavior
When we started this pilot, we aimed to understand how people used crypto on the ground in Venezuela. While most participants have used the funds predictably (i.e. holding or purchasing from the recruited vendor), we’ve seen some unexpected behavior and applications. This is very exciting and will inform future phases of the pilot.
In one of the locations, the recruited vendor canceled at the last minute. The (very scrappy) field-operations contractor decided to set up their own store. This involved finding suppliers, renting a space, and staffing the store so that participants could purchase food and supplies. They were able to get the store up and running in less than two weeks.
Since the pop-up store doesn’t have refrigeration, they are not able to sell perishables (e.g., milk, eggs, cheese, meat). The field-operations contractor running the store felt that these items were key to a fulfilling diet. While the nearby butcher wasn’t comfortable accepting crypto, they would accept vouchers from the pop-up store. Participants who want to purchase from the butcher first purchase a voucher from the pop-up store (in crypto) and then exchange the voucher for goods at the butcher. At the end of the day, the butcher trades the vouchers for bolivars. This allows participants to buy the food they need to feed themselves and their families.
Moving Up The Supply Chain
This project has caused one of our vendors to increase their business by 4–5x. Unsurprisingly, the vendor’s suppliers asked about the store’s growth. The store owner described the program and how the participants’ crypto purchases generated the growth. The suppliers, most of whom were familiar with cryptocurrencies, were very intrigued, and a few of them have verbally agreed to accept payments in crypto. This is a very encouraging development, and we look forward to moving up the supply chain in phase 2.
It took less than a month for our first organic P2P transaction to happen. It began with one of our recipients getting a manicure. After discovering that the manicurist participated in our program, the customer asked whether the manicurist would accept payment with crypto, and the manicurist agreed. Although this is a relatively small transaction, it is the first time that crypto has replaced fiat in a real-world transaction through our program.
Opportunities for Growth
As expected, we encountered some issues during the initial phase, such as lost pass phrases, chunked text messages, and difficulty uploading images due to low bandwidth. We know this is part of the pilot process, and we’ve already added safeguards and features to minimize the impact of these issues in the future.
Analyzing the Blockchain to Understand User Behavior
Distributing cryptocurrency allows us to analyze the blockchain and see what participants are doing with the funds. Based on the blockchain charts below, we can see that most funds go to the recruited store, but P2P transfers are increasing. Additionally, most people are spending $10 or more, and they aren’t spending the funds immediately.
Planning for Phase 2
As we’ve discussed, the ambassador pilot is a multi-phased project. The purpose of the first phase is to experiment with multiple locations in order to determine which location is the most fertile for the development of a crypto-economy.
In phase 2 we will attempt to recruit more vendors, ambassadors, and recipients in the best location. Additionally, we would like to start experimenting with cash in/out partners and involving upstream suppliers in the program.
Progressing the project from phase 1 to phase 2 presents some interesting questions:
- What is the responsible way to close a location?
- How do we grow the number of recipients 5–10x while minimizing fraud?
- What roles do the field ops and ambassadors play in a larger pilot?
One intriguing idea is to promote current recipients to ambassadors. Allowing current recipients to become ambassadors (and to select future recipients) could offer a powerful way to scale the program. The existing recipients have already learned how to use the technology, and they understand the mechanics of the program. We are still determining how to identify which recipients to promote; perhaps initial ambassadors will be allowed to promote a subset of their recipients.
We are also exploring the idea of delegating some field ops work to ambassadors. The field operations contractors currently have a lot of administrative responsibilities, which will not scale if we want to significantly increase the number of participants. Tasks such as reviewing recipients’ contact info and validating receipts are obvious things to delegate to ambassadors.
It would also be very interesting to have ambassadors help us with vendor recruiting. Presumably, they have a broader network than the field operations contractor and might be able to build relationships with more potential vendors (and perhaps cash in/out partners).