Money on the Edge: Provoking Products

In this series of articles, we have surfaced key insights for designers, technologists, and policymakers who want to do something for Venezuelans living under repressed economic freedoms and high inflation, but who weren’t familiar with how people living through this situation are using money or what limitations they must face every day. Here they are again:

1. Networks of people have replaced the roles of companies and institutions.
2. Necessary transactions often feel as uncomfortable as drug deals.
3. Despite scarcity and economic collapse, some are thriving.
4. People are enduring constant swings between modern and primitive existences.
5. People increasingly rely on income from the informal economy rather than stable salaries.
6. Leaving the country is like going from a sinking ship to a lifeboat with few provisions.
7. Nobody wants the local currency, but it’s necessary to survive.
8. Product sellers have the power to choose the means of payment.
9. Residents have no ideal ways to save.

Keeping these points in mind is crucial when envisioning products and services that could really become useful at addressing the needs of the Venezuelan people. Now, returning to the question that motivated this study:

How might we use technology to serve Venezuelans who are currently under monetary and economic duress?

We have leaned on our own familiarity with novel financial technologies and our insights-driven ability to empathize with Venezuelans, and we have come up with several product concepts. We have started discussing them with the industry through workshops and conferences, and we now present them to you, hoping to kickstart an open conversation about their implementation.

General properties of our inspirations

We believe successful products and services in this space must enable confident, resilient, and open access to financial systems. Let’s take some time to explain what we mean by that before we delve into the specific concepts.

Confident: leverage trust

The cryptocurrency industry is often adamant about making products “trust-less”, to encourage people to place their trust in the software they use and in the underlying, hard-to-change consensus of systems.

However, we have observed that people are used to trusting: in friends’ recommendations, in other network participants, in brands. Therefore, our suggestion is to make products that, rather than aim to be “trust-less”, leverage the trust already present in networks of people: by being well-informed about the entities its users already trust, about what the common breaches of trust are, and by actively working to prevent trust misplacements that result in scams and social engineering schemes.

Resilient: ensure consistent access even under bad infrastructure

As we have seen, Venezuelans have to deal with frequent and unpredictable outages of services. Digital financial systems need some base level of electricity and internet access to operate, but we encourage designs that could at least partially operate offline, assuming the networks will be generally unreliable, and that are compatible with legacy infrastructure (like smartphones with low processing and memory capacity, running older operating systems, and lacking modern sensors).

Open: accessible to everyone in practice, not just in theory

Bitcoin has made digitally native money available to everyone with a computer connected to the internet. Or has it? For people to want to use these new forms of money, they must be highly usable and interoperate easily with systems that they already recognize as money. Think about the way WhatsApp made end-to-end encrypted messaging be actually used by millions, accomplishing what PGP-encrypted email didn’t. We should aim for a similar development for the use of digital open money systems.

Product concepts

1. Digital Finance Ambassadors Program

A certification program to recruit widely-trusted, tech-savvy members of small communities, and train them as digital finance ambassadors via personal meetings or video lectures.

Ambassadors guide and support their local community — family, friends, neighbors — in learning about and trying out software that involves the use of electronic money. In particular, they could help onboard people onto bitcoin wallets and exchanges and walk peers through their first digital transaction, to show them how tangible digital currencies can be.

2. Growing Circles Marketplace

A marketplace that shows product offers by degrees of separation, prioritizing those from people the customer knows, then those from people that know someone she knows, etc. This is a way to incorporate the trust people have in their friends and family in the system, using it as a filter for safer transactions.

3. Offline Mobile Transfers System

A digital wallet that enables offline phone-to-phone payments. The wallet could periodically verify the available funds when it is online, and allow for offline transaction signing that is shared via NFC or Bluetooth between purchaser and merchant. It should be reasonably hard for a person with average computer skills to tamper with the system. As soon as a device is back online, the wallet submits the offline transaction to the ledger.

4. Crypto Bills

Simple, inexpensive, cardboard-based hardware wallets with chips that store an irretrievable private key loaded with a specified amount. The chips can be activated by an NFC-capable phone to sign messages and, with an internet connection, verify that the key does indeed hold the funds.

5. Easy-Cash-Out Dollar Wallet

A wallet to store USD value allowing instant, easy sends from one device to another. The wallet enables cash-in and cash-out functionality available anywhere by leveraging both local and global pools of liquidity.

To convert bolivars into USD, the wallet can facilitate a seamless exchange of the Venezuelan local currency, bolivars, for bitcoin, using a liquid local marketplace like LocalBitcoins.com. Then, bitcoin can be converted to a USD stablecoin using one of the globally available exchanges.

6. Money Changer Training Program

A platform that makes it easy for anyone to serve as a money changer. Traditionally, money changers needed to hold accounts in more than one financial jurisdictions. Now, any account-holder has access to at least his own country’s jurisdiction and bitcoin. This means other jurisdictions can be reached through multiple hops: A Venezuelan may convert bolivars to bitcoin, then pass it on to a European partner who will turn the bitcoin into euros.

The platform includes access to peer-to-peer exchanges, as well as a suite of training tools to equip money changers to be efficient and project their earnings.

7. Universal Point-Of-Sale System

A point-of-sale system centered around the buyer, not the seller, that allows them to pay for goods or services using any of the systems they already have access to. The money is exchanged in the background so that it reaches the seller in his preferred form. The system leverages existing trading networks and products to abstract away the complexity of exchanging money, passing the fees on to the buyer, as the seller of scarce products has the upper hand.

8. Joint Crypto Accounts

A digital currency wallet that enables family members to collaborate on their finances. The system is integrated with exchanges that allow the money to be cashed out to local currencies.

Money in the joint accounts can be provided by family members living abroad or by locals with greater means. The wallet integrates tutorials and training tools to guide families on how to use digital currency.

Opening the conversation

The concepts you see above are intended as provocations based on our familiarity with Venezuelans’ use of money and our technical understanding of systems that are currently available. We would like to offer them as starting points for product inspirations. Are you working on applications that you think will benefit Venezuelans? Do you have an addendum or modification in mind for any of these concepts? Are you aware of coming breakthroughs that will open up the design space? Please leave a comment below, and stay tuned for our future blog posts.