 I think 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're doing right now in Kenya and how we're trying to scale those kinds of solutions. These are all just pictures that I got sent yesterday from people in the field working on these currencies there, and then we're going to play a bit of a game soon. This organization I started in 2010, and we started printing vouchers in Kenya as a means of exchange for people, and we've been doing that progressively, progressively, until now we've got about 6,000 small businesses that use these networks. I started this work about, 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 for petic works. Turns out they don't exist, 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 gets to issue the money, and I was very connected with, my parents did a lot of aid work. Someone told me one day that people creating currencies was just a normal thing, that it was being done all around the world. There was a book by Bernard Leintar that started popularizing 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 local currencies were existing around the world, and ICE, so I left physics and I started going into economics, and I went and started studying these in the U.S. and Europe, and there's a lot of actually super impressive systems. I mean here in Japan, actually a lot of the history of community currencies started in terms of them being popularized, even by the state and national municipalities. So there's a really long history to this, and really you could say that people creating local currencies was how all currencies started in the first place. And I started doing development work in Kenya, thinking that all of these solutions that we saw all around the world in terms of groups getting together and creating the right endogenous local money, 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 in goods and services. So I moved into the slums, this is Kibera, but I was in all sorts of slums across Kenya, and we started getting together groups of businesses in those areas, and basically just coming up with basic agreements and playing games like we're going to do today, just as a demonstration and just coming up with what are the sort of rule sets we would need to make a functional medium of exchange in the vacuum of the Kenyan shilling. So when the Kenyan shilling is doing very well, you don't need this stuff, but when it goes down, can we create this sort of counter-cyclic mechanism so that these guys can still trade their goods and services, and it's good to see when does that break down and how we've been trying to bypass those challenges. A lot of the original work I did in Kenya was based on the idea that there's a lot of aid flowing into Africa, like Fenny mentioned, to melt over the world, and that mostly it's ineffective, there's huge amounts of middlemen that are taking 80% of the actual money, very little gets to actual 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 of this was that you're connecting marketplaces together so that people can build more and more on top of that, and that the money doesn't just come into a community and run back out, but there's a time for it to sink in. And so there's huge amounts of 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 given out vouchers for sorting through trash, and we're trying to clean up all the plastic, there's a lot of water and then there's a lot of mosquitoes, so there's a huge amount of malaria in the area, and so people would get these to collect trash, they could go and use them at the businesses, the businesses could circulate them, and then there was some collateral behind this in donor funds, in that case, and that was all great until the donor funds were over, right, and so that was like a one-year project where we were, you know, it was, we 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 effect. So 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 going to create vouchers 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, Nick spends his and then stops accepting them back, he had four guaranteeors that would go and beat him up, or do, you know, that sort of thing. Not really beat him up, but, you know, figure out what's wrong, and help his business if there was a problem. So it was a nice community support mechanism, and we had a huge bloom out of that. There was a lot of trade going on. We were, you know, we had grad students there that were helping do, like, tracking serial numbers at the time, and, you know, very low-tech bid stickers, so people would know where to spend them. We had quite a few schools involved, so kids could pay their school fees. There was charcoal, this is like a Mondasi, 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 so this is, you know, like, you know, as we start to talk about, like, what are the challenges of working in these areas, is, 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 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-Shubab, and we were doing secessionist plots, and it was a time where that was, there was a lot of that going on in Kenya also, so it was kind of, you know, had a timing in a sense. Eventually they charged us with forgery, and we went through about six months of court cases, and eventually the attorney general, we did a big petition internationally, so like all those projects I was showing you before, there was a meet-up in Japan just here a month ago, and every two years there's a meet-up of all these community currency practitioners and researchers, and it's 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 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, and no rights whatsoever, were making their own money, and it was circulating more and more useful to them than the Kenyan chilings, which were just there once in a while, so it was filling the gap, in other words. And the fact that the government would come after us in this way was really a, it was in, it ended up being very, very embarrassing to the government, and so the Attorney General came out and said, there's no lobbying 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 Bank 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 us a bit more, because they want to be a bit tech savvy, and so we'll see. 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 block, you know, essentially, so there was a lot of huge hype, and then pretty soon after we launched another five currencies around Nairobi and some more Mombasa, like this is the local chief, this is actually two different school headmasters, and always there was this idea of, you know, what's behind these, so back then, you know, like there was no hard guarantee, there was these a lot of soft guarantees, you know, it was essentially a social backing without the ability to litigate or anything like that, it was, and you would end up with a lot of often like traffic jams with these things, like, you know, if, you know, like Kim here stops accepting them one day and we were all expecting him to accept them, but let's say he just moves or, you know, his businesses shut down, you get a lot of this situation where people lose confidence quite quickly in them, so you end up with this kind of stop, go, stop, go, and most of these groups were about 100 to 200 businesses of that scale, and none of them really grew much bigger than that, and there was this general problem of like how do they even know each other, you know, that they're accepting it, and then how do they, how do they build cohesion around it, 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 bigger than that, and so, you know, the group size, the group unit, in fact, even today, we still kind of use that unit, the trip 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 how that works, so like a 20 shilling note here, what was really gratifying to me was that these notes were changing as maybe about twice a day, and you know, this is based on serial numbers way back then, we have actual data now 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 it, because it's huge, I mean, if you can imagine one piece of paper enables 700 meals over a year, one physical little stupid piece of paper, it's, it makes it ridiculous what we're doing as humans in a sense, like we, people are not eating because they're missing pieces of paper, it's weird, right, and here, you know, we're talking billions of people living in in this basic lifestyle where money is sometimes there, sometimes not, and the ability to barter is, it doesn't really exist, you have this kind of coincidence at once, you know, you can't really always be trading, you know, fish for water or things like that, just, it really doesn't work, and you end up with a lot of informal debt, and so one of the first things people do when they start using these is 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 were like 300 times more likely to start doing gifting with each other after starting these programs, because they cleared a lot of that debt. And just, you know, so we do a bit of 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 the group, and he's getting a lot more customers, is the idea. So his turnover is going up and up and up. I mean, generally we see something like an increase of about 30% turnover for a business in the first few months of joining one of these programs. This might be a question about why is the national currency not there in the first place? 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's remaining money should be enough. But prices are not elastic, right? And so you end up with a 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 paying for petrol or gas in your car. And so it just, it's like an analogy of having a bucket, right? Like, you've got a bucket of water and there's just this leaking hole 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 allow that money to stay there long enough to build industries and 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 bucket. And, you know, like, you would hope that the money produces enough capacity in the community to start absorbing more and more of that 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. We can discuss more. So we go a lot through the entire supply chain. Mostly this is all to I mean, really, it's what we go into a community, we do a lot of training with the chief and elders as we as we go in. But then it just becomes word of mouth at that point. It will. Yeah, something. Also, I mean, these are communities that are living on less than a dollar a day anyways. So the quantum of cash is more important in terms of that they may not actually have enough to live on, right, with 80% of the world's board is living like in these types of areas. And it's actually growing. So, so they may have some scraps of cash around, but it's the quantum of cash 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, or baby schools or 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 communities of schools ended up being a good seat for the currency and a nice kind of like backer of last resort. Cooperative maize mills, there's another thing that that was really super popular where like this group was actually working with Red Cross years before this and Red Cross coming came in and pumped a bunch of cash into the community because it was a food insecure area. And they had the community, they actually train them to do collective farming work and dig waterpans 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 groups that Red Cross did this in. And they saw what we were doing on the coast and they started their own system. And so like they're the one group out of this massive groups of farmers that started doing this, and they've grown to about 2000 users now. So they've gone to about 23 different villages now. And so they're spreading super rapidly. And so in this case, what they did was they said, well, to replace that money of Red Cross, we're basically going to create a voucher, we give it out. Essentially, just one air drop to the whole community of the same $4 about that $4 can be used at this cooperative maize mill so they can bring their 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 and that so they have some workers there. And then any excess operating cost goes back to pay for those activities that they were doing with Red Cross. So they created their own funding mechanism for doing that. And so it keeps going around. And then all the other business started accepting it. So as long as everyone knows, there was actually some fundamental backing there, that was enough to build that trust in that system. So I think we're going to go back to this idea of like, your your piece of paper or your token is a guarantee against what? And just how important is that trust? Same. 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 daughter. So she's the grandmother of those kids. And she makes Fuji, which is like a porridge. And basically, there's a huge there's there's quite a few periods like, like January, for instance, or maybe the first week of every month where like, the market generally crash. And people don't have enough money to pay for her Uji. But now she has a whole market of people that can still come in with these. She can use them to pay for her kids school fees. She can use them to buy her ingredients. So she has enough of a market now with us to stay. So her kids are less hungry. They're going to school more regularly. This is my co-founder, Carolyn Delma. And she basically goes into these communities. She's generally one of the people who does the additional 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 and 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. Rope right here. So everyone's going to get two fives and two tenths. And these are some of the currencies we've used in Kenya. And if you have a pen, if you can write your contract on the back, some, you know, like either Telegram or Twitter handle. So basically what you're doing here, you're minting up on you. So imagine you're a business. So think about what you can offer. So in this in this simulation here, we're a market. I'm going to 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, maybe it's advice, maybe you know some tips on pole dancing. And whatever it is, think about what you can offer. Think about what you need to buy. And basically go ahead and try to like buy and sell. We're just going to give you five minutes to just kind of experience this process, you know. And in Kenya, imagine, you know, you're a group of businesses selling different types of vegetables and shoes and imported items or services, right? So I'm going to tell everybody's got them. And I'm just going to give you guys a few minutes. I'll ring a bell when you guys stop trading. Everybody good? Everybody got some money? Venetian have some here? So yeah, if you would write your name on it, write your name on the backs of them. You'll see like there's an endorsement area on the back. Because again, these are claims against what, right? If you think about this, if you're a business and you're meeting vouchers for your services, well, you should essentially be liable for these, right? So if you're buying advice off someone, well, they should be able to come back for whatever you have or someone else should, right? Your name, slash contact, someone else is going to end up with those and then they're going to come after you. We've got to clear our debts. I'll give you guys just another minute to write your names on the back. You don't have to write what it is you're selling on there. You'll just tell the person. Are we all ready? Yeah, it's going to be fine. And think about your goal in this session right now is to basically buy and sell as much as you can. And feel free to like, call out like, what is it you're selling? You know, try to get some clients. Okay, so everyone started, should have started with 30 and, you know, who did we trust to make sure that was true? We had some sort of central bank here that was issuing money to everybody. Okay, so everyone started with 30 of these vouchers. They were vouchers for your goods and services, right? And you were trading with each other. So ultimately they should be claims against you as a business. Okay, this is our demo for kind of what we do in Kenya. In reality in Kenya we, 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. So everyone started with 30. Let's hear, who thinks they are the richest in the room right now? Anybody, so count your money. Who's got more than 30? Raise your hand if you have more than 30. Okay, who's got more than 40? More than 40? Who's got more than 50? 60? 70, okay. So Kim's up here and I'm sure we've got quite a few people along the way. Does anyone have none? So Fenny's down here. Actually, sorry, we started there. So Fenny'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've experienced some inequality now in the room, but these are these are claims of Kim, who's money do you have there? Do you have anybody in particular? I have Fenny. Okay, there she is. So Kim's got some of Fenny's money, right? What are you offering Fenny? Family legal advice. Yeah, okay. So what happens in this case where 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 situation? How do we clear these credits? Right, and so this has been this 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, there's like what's actually backing this? So you know, if it's just this social commitment, do we have a way to take Fenny to court? Probably not, right? Maybe we could go to her 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 Fenny's 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 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 got a lot of money. Well what happens when Kim leaves town, or maybe he takes some of that money, so it's not moving anymore, right? Or we have a lot of people, a few people way up here, and you end up with a lot of these balances, okay? So you know, it's nice that there's currency for these communities, but you see a lot of the same kind of problems. So I just, you know, what pops to your mind? You know, who's issuing these? How would multiple issues, issuers even know about each other? How would they develop relative pricing? So if you imagine like, 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 16 or 30 of these issuers within a region. How would that work? And so what we're really trying to do in Kenya is like, I don't want to be the central bank. 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 to discovery and guarantees and collateral. How would you put on chain collateral? How would you put something that is a guarantee so that, you know, even if FENI leaves the system and you're holding those bills, so there are claims against FENI, let's say, but they also claims against something else. And so we'll talk about about like actually the idea of staking dye into these systems, which is something that we've already started doing. And also, you know, with paper, obviously printing paper, I would never recommend to take one. It's not fun. You know, yeah, go ahead. These values here, FENI, are they like the national currency? So there's a soft peg to the national currency, right? It's a soft peg in a sense with these, like, you know, like there is no, there is no pool of money behind these, right? We're just calling them vouchers for Kenyan shillings, right? So, you know, there's a big challenge to them. But in terms of prices, people would recognize this like... They would usually, they would use them as mixed pricing. Usually they would, they would, mixed as in like whatever's, whatever you don't have in shillings, 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, we put a little stamp on this 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 you got in the first place. And then you just get the next stamp 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 at the end of the year, right? We want everyone to kind of come back to level. So we try to put in those mechanisms. So it, this, this, the idea is called stamp script, and it was popularized like in Austria, post-World War. And there was a mayor that started issuing these and he would accept them as tax credit and for the local, like bus services. And it really took off and really circulated extremely fast and it was outlawed by the National Government in a few months. Or no, I think it circulated for like two years. And so the the idea of stamp 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, 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, you know, smart contract. So we've got 3.7 billion people who are sort of not connected to the internet. So how are they going to use the blockchain? And we'll get into more of just the blockchain in general. But 2.5 billion of those at least live with a 3G or 4G signal. So there's a huge, huge population that has access to phones, right? And these are mostly, in our case, it's like a little low key of pushbutton phones. And so there's this thing called unstructured supplementary service data. It's an interactive menu-based technology and it's supported on almost all mobile devices. And it looks a bit like this. You dial what's what's called like a shortcode and we, we have a server sitting there on the telecom that's waiting for the result of this 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 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 do have a little ranking 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, you could say, I want to look for food. And it'll show you that day who are the top users of businesses accepting. Yeah, I call this, I mean, it's a centralized stepping stone in a way. I mean, but there's, there's a lot of ideas where we want to have this completely decentralized. We want them to be able to manage their own keys. That's just doesn't seem practical, at least for the time being. 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 they're trading goats, you know, and things like that. It's, and so here's, so USSD coming in, we've got an AWS, this is really simplistic. And actually, so Nick from Sempo's going to talk more about this after this, this idea. And then we're pushing up to a side chain right now. We've been using these proof of authority based systems and XDAI has DAI built into it. It's a hard spoon. So there's, and it's uploaded to Ethereum. So it's backed up on Ethereum. So we have the security of Ethereum, but the cost for this is almost nothing. It's like a 10,000th of a cent to do a transaction on that. So we can do as many as we want and they can clear in real time. So this is, you know, 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. So grassroots economics is going in on, you know, either behalf of a donor or when communities call us in, we go in and do a training and we, we mint that token for them. And we, we create an amount that's basically based on that population right now. This is some of the stuff we're trying to get away from where we, we want them to self-generate their own tokens and manage them themselves. So we're building those systems so that they can do all that work themselves. And our work is just going in and doing sensitization and training. So again, we're doing this, this air dropping for new users. And then we also get donors involved. 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 and we're trying to get them to change how they put their money into the community based on some parameters of how the community is using that money. So it's giving donors a way to, to actually get, you know, parameters or impact measurements in those communities. So savings in loan groups and other key businesses, like I showed you the schools, like what, what, you know, what's your, what's the backing? 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 backing 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 the ability to put collateral, take national currency, let's say from a donor or from the savings groups itself, they can put that, they basically can buy, die with it. They can stake that die into a reserve. And that, that gives 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 a foreign token comes into their wallet, it automatically converts into their own token. And that actually creates price imbalances between the communities and we'll go into that a little bit. 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 the price of your token is based on two things. Reserve. So what's, what's actually behind it? So we're in the situation now where we're just starting to connect this to die. Right? So if you've got die in reserve and let's say I have $25,000 of die, for instance. And I create a supply of $100,000. Right? So I've got a 25% here, you could 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 one, when I create the smart contract, I say, okay, we have a standard on what we're going to allow for the reserve ratio to be. And so basically, let's look at it this way. 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 collateral into the system. We don't have enough die to give everyone. Right? And people just don't have enough money to do it. So we need to like be able to create more money. And it's sort of irresponsible to do that with just pure social backing. It's really hard for groups, especially as those groups try to expand out. It ends up being something that may work with a dozen businesses well, that know each other well, speak the same language. But as those start to scale and grow out, it breaks down really, really quickly. And so I've, you know, doing this for 10 years with paper currencies, groups of 100 to 200 businesses, that's about it. Scaling beyond that, not so easy. So we've created dozens of these currencies all over Kenya. 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 leverage? So, you know, Red Cross again is pumping money into these communities already. And generally that money just leaks right the back, right out. And can we have them instead put that money into these reserves? That's the idea. So just looking at this graph again, so imagine you've got a total reserve for your, so 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 e-money in Kenya, so we have an interface that goes directly from that same USSD menu so to deposit into their own savings account, that is in DAI. So this DAI, so here's your DAI that's locked into this contract. And then we're going to mint four times that in tokens. So if we've got a 25% reserve ratio, we've got four times the leverage is the 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 started with 25,000 DAI, now I have 100,000 DAI, that's what I'm saying, that they're one to one. It's not DAI anymore, it's my DAI. It's my token. They name it themselves, so it's their credit, essentially. It's a credit against some reserve. So we've minted money here. And what's really exciting about this is we need something like $2.5 trillion in the next five years if we want to do any of these activities that the UN is specifying under the Sustainable Development Goals, like to deal with refugee issues. And that's also the same size as the World Bank's quoted credit gap. Like there's not enough credit in the world anyways at all right now 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. So that's the idea in terms of scaling all this stuff and working with Red Cross and Sempo, Nick, is basically designing those interfaces right now of how to on and off ramp money in and out of these systems. So I'm sure there's a lot of questions here. Like one is what happens when there's less and less reserve 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 essentially one twin with shillings, call it a die shilling. Okay. So once it starts dropping below a shilling, so I have a token now that is only, you know, it's, let's say we're down here at like, we get down to that far point. So people are starting to cash out. Okay. There's some mechanisms we can put in smart contract that 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 10% of their reserve, or their balance. So out of their supply, if they want to cash this out into this, they only do 10% a week right now. And that's a choice with the community. So the idea is that's their reserve. 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 and I'm in another community and I see that my currency is now more valuable compared to hers, there's this sort of arbitrage opportunity. And if I go and buy from her with my tokens from my community, basically the reserve behind mine, actually when she converts it to hers which happens automatically, that reserve goes into her currency and it brings that price back up. So there's a price stability among the communities when that happens. And there's also an opportunity for me to go in or for her to say, well, I can actually use my shilling now or a donor could come in and say I can use my dollar and shilling and 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? So that drives it back up. And so we're depending on basically two things or 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 Kenyon shilling 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 has that been? What's that? How long has it been stable? We've been doing this for about a year and a half now and the biggest fluctuation I've seen was about like a 0.8 to a 0.2, sorry, a 1.2 price gap and then those tend to clear within about a month of each other. So it's, I mean, it's really interesting to look at those all-solidatory effects. And there's also this sort of like concept of negative feedback. The collateral is die, not either, right? Yeah. Yeah. Let's see how you do that. So if the... Now it's cash. Right now it's just pure cash. In fact, so I have a top-level token. So instead of the die, we just have a temporary token that's not connected to anything. And then I've got a bank account and we're just, we're making that pay happen with the bank account, right? So we take that bank account, put it into e-money, and we just send it back and forth right now. And that's not a fun, not a fun process to do. And so eventually that, that whole interface for how this thing works will just be through the local e-money systems. And then, like Nick is also working in a lot of areas where there's no, there is no e-money system. And so in that case, he's working with like local vendors that sort of act as the e-money. Maybe he should... Yeah, I'll talk about it. Maybe it's a good time to just show some, show some slides. Yeah, because this isn't working at all. Think about also if like the Fennie situation, like imagine Fennie leaves the community or no one can get anything from her. Let's say she was representing a whole token, okay? So this is a village. People are using a currency, but now all of a sudden like the main thing people were buying from it is gone, right? Say the school breaks down or there's a huge drought and or like 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 backing and they can move that to the herd community over here. So the price of Fennie's token is going to collapse, right? Her token's value is going to go up. If there's anything this community can offer, let's say maybe not now, but next month when they 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 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 then that creates a market 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 people be like the buyer of last resort for their respective communities, right? Does having a reserve reduce the pressure on that like main social backer? Yeah, definitely. And so there's like a buffer now. So like if the school has accepted as much as they really want to at that point, then 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 to start putting more money back into the system. And so like really, I don't think wherever I mean, with tokens in general like there needs to be something behind it, right? And even if that's you know, like the savings of these groups they're actually saving in these currencies as well. So they have the 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 it's not really extractive interest like you would have in banks. And so that also creates some pressure and demand and we've had some municipalities accepting them for like there's a daily business fee for going to some of these market places. And so like if there's any demand for it at all then as long as you know, if that price starts to drop down well there's always a point at which it's worth it to buy back in because you need to pay for that thing whatever it is. Churches have started using these a lot for like tidings. Mosques are using them for like Zakat at the end of the year during Ramadan and they see it as like a but they don't charge interest on there. So different groups use them in totally different ways and I can't even tell you what half of those ways are. I mean we've got a lot of grad students and researchers to come out into those communities so but yeah the idea of having you know backing is I think super important to me why the community currency movement over the last like 30 years has been a very social movement. It's also been very like isolating. Generally they don't connect to each other. They don't connect to national currency at all. And there's this sort of wall you know like we don't need your currency. You know there's a remote down there. All right. It's here. I think the team just died. What I can just say is I can just put my laptop in the middle of the room. It's a little bit small. If there's savings in the community what's the average saving per community as far as the whole? Yeah so like they'll save up to something like like a group is like 25 women so even within one quote unquote community you can have many many of these groups and generally you have like maybe a dozen of these savings groups and they're saving like one to two dollars a week per person and they get up to something like two hundred dollars in total. So generally having a pool of two hundred dollars they start loaning that out in general. So what we're doing is saying well hey you guys can also start to leverage the savings that you have into more credit because you know as much as the whole savings thing has been amazing across Africa like these these table top banks have actually done amazing work and like Catholic Relief Services is one of these groups that have created that I think called Silk just savings and internal lending cooperatives and they do really amazing work and they do they do it all with these like three choir notebooks that they cut with like razor blades they're really amazing and I'm super impressed with Catholic Relief Services has developed this thing called Silk yeah which is working and they have a training manual and it's it's gone really viral because those groups go and train the next groups and they they get paid by the the next group to basically be the the auditor of that group the trusted party and what we've been doing is just so they use they can use national currency they can use ampeza and now they can also leverage so we're just adding a tool to their set right now and that's how we've been spreading as well. Is this possible to like supplement the programs that give directly does so if ours to donate rather than to give directly directly you would give it to the reserves of the community that can then leverage it as an internal party. That's totally the idea and and and be able to use the data for your decision so you know when we are like let's say Red Cross is is seeing that there's a drought coming that's a time now to start start feeding that that reserve they can 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 to them individually. No I don't really love it you're right because it's like the end goal. Yeah. It's been a big time. Yeah. Awesome. Just so I can like tailor this presentation who was here yesterday for my Oxfam talk. Okay so I'm going to do a little bit of overlap just to cover some of the stuff that's being done with people. So sorry. So my name's Nick and I'm the co-founder of SEMPO. SEMPO is really focused on creating payments infrastructure and savings infrastructure to create financial inclusion in exactly sort of markets that we were just talking about. So one way of looking at us is that I mean we're just another payments route which is kind of cool with this place but what I really love about what we're doing is that it really dives deep into like sort of token economics here. So it's a lot more than just a regular payment system it's about really setting in those frameworks in place to really set up tie in new ways that are like making infrastructure work inside communities from the ground up and really re-imagining a lot of that. And I think that this time whether we're doing it right now is really exciting because it's really the first time that anyone would actually seriously able to produce doing these sorts of like alternative financial systems inside communities about people who are like going nuts about it because of the nature of what decentralization brings to the capacity to create new technology models. So this is better watching. I just got back from working better watching. It's a collection of 87 islands in the middle of the city of Arshad. They're some of the most isolated islands on the planet and also some of the most disaster-prone. So we get Volcanoes. This is Tenna Volcano which is just super cool. I should show you a video on it. And they have Thai foods there and all those sort of things. So one of the nature of these by having these isolated islands is that banking infrastructure is basically non-existent because it's just too expensive when you have these little small populations in the rest of the most islands to actually put bank branches on each island. So there's actually more people who have Volcano on their landmass than there is with a bank on their landmass. There's more people who have Volcanoed than there are banked which is just like phenomenal. Don't get mated, get lava. So this isn't like something that makes sort of things a little interesting and if you want to get cash to people really, really challenging. And so what we do is because of the magic of the internet, we basically set up these entirely digital networks inside communities. Where we have, we give payment cards or mobile phone based into the payments and it allows people to spend things at local stores and then we can set up payment links with the stores themselves because it's a lot easier to get cash to stores who tend to have a higher level of financial inclusion than it is to get money to sort of to set up payments directly to individuals in terms of fiat on ramps and off ramps. So that's the space we're playing on top of these sort of token economics that we'll talk about. This is like a whole bunch of problems when you're actually trying to do this in practice though because once again we're talking about some really remote and quite isolated communities. Sorry, are these part of some margination? Yeah, bannewater, bannewater is an action. Bannewater? Bannewater, yeah. Each is basically a very old presentation, maybe two seconds. Raising hand if you've ever heard of that country. I didn't know about it yet or... Oh sure, just show where it is on the map. So that's where it is. It's like literally this whole scattered set of islands and this is what this is obviously for other communities to look like they're like highly sparse islands. Yes. So the classic problem we face is this sort of internet penetration. Just to give you an idea of what the communities actually look like these are the sort of places that these islands have. So there's not necessarily a high amount of internet penetration. What we've found is actually a really common failure mode is that there is going to be three or four gene networks but they're going to be... These communities are sort of right on the fridges. I don't know if you guys have ever experienced like the patchy connection what we find is really common in practice is that you ostensibly have internet that it will be there for like five minutes and it will be gone for five minutes. It's not at all nothing, I think. So you have, you know, you sit there and you send an SMS and then, you know, forget that you sent an SMS and five minutes later it goes whoop and you pocket your nightclubs out. It's like it's your SMS sending. And so this is like kind of okay for a lot of things that are like synchronous or asynchronous sort of actions that we go through. Like trying to send an email is actually you know pretty okay when you have questionable intent. But it really does break down for a lot of payment processes. Payments are something that you don't really have the privilege of going away and say, hey trust me the money will come into this. People need a guarantee on the spot because it's in-person interaction. So we really need something that's really quiet responsive. And so what we actually do, one of the things we've worked on inside communities is actually using contactless payment cards. The reason we use these is we do a little bit of centralization to our process that allows us to basically store the data and balance on-site the cards in such a way that we can pay transactions on them by mobile phones themselves and then put through payments at a later stage. And so the main challenge here, as you might imagine, is just the risk of a double-span attack. Because if you're making a payment at one store and you go to another store and neither of those stores are connected to internet right in this very moment and they're storing their transactions to make later, how can you be searching that the person hasn't actually just spent all of their money on the previous store now and you're accepting a payment from them? They've got no money left. The great thing about these cards is that they've got secure hardware on them. It's not full cryptographic hardware but it's hard to tamper with because it's a chip inside a card. So what we actually do in order to like prevent a double-span attack on the local level is that we record the balance on the card at any given time and the balance consists of basically two options. Your balance consists of the amount of money that you've had loaded onto the card in total subminus the amount of money that you've had subtracted off the card in total. So if you had 10 dollars you spent five of it or three of it, let's make it, your remaining balance is seven. But of course the big challenge of these sort of processes is that you don't want people to be able to basically reverse their card. They roll back in time. So we record the balances, these two numbers. The first one that Matt loaded on is verified using a signature that's basically the vendor will have a list of trusted attestors and so when the person goes and tops up their card at any point in time a signature is loaded on attesting to that balance then it can be any one of delegated organizations that actually set the balance for those communities. And then when they go and make the payment we actually use a one-way counter on the card that is incremented that can't be rolled back. So that means we can be pretty certain of what the balance is on these cards at any point in time and it means that when you go to restore the vendor's know the cards aren't going to be out of date. So that's some of the things we're sort of playing in so that's what we're doing. What are the biggest challenges we've actually found or traditionally an issue with sort of setting up payment networks in these inside communities is regulatory capture which is basically the process of existing incumbents regulating any competitors out of the market. Something that Facebook is really facing right now. So I'm going to I think it's like super interesting because like something that isn't discussed enough is M-Paison is like this fascinating story of payment mechanisms. So who here has heard of M-Paison? Okay. Who here knows like how M-Paison works? I don't know. Okay. So I'll go through it. M-Paison's origin story is like sort of one of my like favorite origin stories out there. I don't know how much this is true versus something was sort of manufactured after the fact but I like it anyway so I can tell if I pretend it's true. So basically M-Paison just started off as this way of sharing SMS credits amongst communities and I don't think there was a particularly strong hypothesis around like what this was necessarily supposed to be but in Kenya the classic problem it's a Kenyan product the classic problem people used to face is that there's a high amount of sort of local remittances between communities. So you'll have people in like rural villages who send family members back to some of the large city structure earn money earn a living wage and then send that money home and the process of sending that money home it was something of a chaotic process because there was no no money transfer mechanisms. So you either had a choice of getting on an eight hour bus ride yourself to send that money back and you're backpacked or you could go through some sort of delegated private type process like a wallet network where you are basically asking someone to get on the bus and give you trust that maybe hopefully they get the money to your family and they don't want that's unfortunate isn't it. And so M-Payser was what happens at Stuttgart is where I've said sharing these SMS credits but what people actually started to do is that you'd have these like basically informal kiosks that popped up on both sides in the city and in the local communities and someone realized that safety is in the city and I'm a worker in the city and you're in the village but I'm trying to get money to you. I could transfer my SMS or I could buy like that for you know five dollars I might not even have my mobile phone and I go hey Benny can I buy five dollars on SMS credits or and she goes okay I'm gonna charge you 10 cents for that and then she would send those five dollars of SMS credits to a kiosk in the village who would then take a small fee of those SMS credits and then provide cash to my family member in like on the spot. So basically this SMS credit transfer process was basically turned into a way of transferring but even though it wasn't designed to and voter phone voter system for was really really cool and built some more infrastructure around it and that basically resulted in this payment process that we have today and it's subsequently ballooned just from a way of making informal purchases to a way of making payments. So now it's really really common to see these sort of setups and I'm sorry the image is so blurry. Oh they had kiosks and they had these numbers that's a look at the end of that. So you can either send it to someone with their phone number or they can have a little agent number. And so Kenya has a population of what? 50 million? Yeah 50 million. And it was an absolutely flying success there. So 2014 well money was transferred in sub-Saharan Africa then Europe and North America put together. And then counterpart or counterpart of counterparty competitor of M.Payser. Yeah English is my first language. M.T.M. was also doing very well and decided to launch this into Nigeria. But they didn't go through the process of basically courting the Reserve Bank over there. What happened in the Reserve Bank basically completely kicked them out of the community by charging them they were finding them basically living all today. And this was a process of basically the incumbent banks basically forcing these communities for these existing telecom providers to play by their books. And this is actually one of the most common causes of failure of like any sort of financial system moving into our country is just being forced out by existing incumbents who have the ear of whatever the regulatory authority is there. And it's something we've had to be pretty careful about. When we went into Vanuatu Cryptocurrency was actually banned outright. And the reason was is because they had one of these sort of scams that I think was the one coin scam recently and the Reserve Bank was just like, I don't know. And so one of the things we're just like the hard ways is you just need to spend a ton of time before you even watch these things just by speaking for authorities and setting expectations around what's going to happen otherwise you could use your sort of space. Yeah, so sorry this is one that I really like but it's one that everyone yesterday has seen. So apologies for that. Yeah, so we've built a lot of the platform working in Northern America, Lebanon on the border of Syria. This is a refugee camp or war camp it's called the camp of a car that's in a car office. This is a really, really it's a tinder box community. There's about 20,000 refugees for every 5,000 workers. So the populations for this just completely reversed which makes it really, really interesting. Um, we built a lot of our Android app all working over the camp and we went to this pin-offed system that we thought was really going to work really, really well. So you've got your card you touch it to the back of the phone and then we go through it. What we found when we got there was that there was an existing cash based payment process in place that was using different masterguards that have industry as refugees. So and what had happened was that refugees were actually writing their pins on the back of their cards handing this across to recipients handing this to the members who would check their cards and then make the payment. What's super fascinating about this and this is something I've been covering yesterday but it's why I think it's like interesting part about this is the reason this breaks down or even the problem that actually arises here is that one of security. The communities we're working with like the concept of like what would happen to your card to sort of wasn't something that was super prevalent and super concerning to these communities. What actually caused the real breakdown that happened as a consequence of this was that the entire control over the payment flow actually swapped over from where you check your how much they paid and then as you pin to be controlled entirely by the vendor. And what this meant was that vendors were basically able to enter any amount into the payment terminal and then confirm it before they obviously need more that doesn't make the payment could even check the amount. So the pin wasn't even a pin so much as preventing security the key function of the pin in this case and I think it's probably joined a lot of societies is actually just to make sure that you have like the processes forcing the recipient to be able to check the balance before they make their payment. So we actually spoke to oh yeah this one's cool. I'll jump to the solutions and say but I think this is really this is a really fascinating example because we talk about our system being based on Arabic peoples but this is what actually Arabic peoples look like. They're pretty much crying so if you're forced to like if you imagine if you were someone who was literate or didn't understand what I would have said if you're not asking you guys to try to remember what the image looks like this. It just doesn't work. So some alternatives have been played with. But the end of the day what we actually did was we spoke to a lot of refugees and in Lebanon mobile phone penetration amongst communities is smartphone penetration is actually close to 100%. And recipients all told us the same thing. It was very much the language was very much focused around the spot that I said that it wasn't that we want to have security because we don't feel safe about our pins. It was we want to be able to check and confirm the payment before it goes through. The last thing we want is when we're talking about low literacy people there's a very big number that says how much we're about to pay and then and then a tick orange cross to make that payment. So it's actually what we implemented. This is a lady who has actually had learning difficulties. So really struggled with regular regular literacy. She's scanning a QR code that's generated by the vendor in the store and then the payment would come up to check across the payment would go through. One thing we learned about making in store payments in this process and it comes back to that internet connectivity thing is that you really don't have the luxury of a lot of time when you're actually working to actually make the payment for it. And this is something that really struggles when we're talking about decentralized finance. I my best guess is around after about more than so like we're talking about like 10 seconds not being like 10 or 15 seconds not being at all but we've got time to wait for a payment. But if I was to stand here for like 15 seconds it would probably be excruciatingly more than for all of us. Yeah wait 7 seconds and I'm done. So the point is is that like these payment processes think are happening really quick even looking at something like PLA and it took confirmation time on that it just doesn't work fast enough. And so this comes back to a lot more of this sort of optimistic settlement and why we had to do it that sort of speed which was something that sort of got us through a lot of that process um yeah this one's super so we talked about you know basically trying to make repayments to vendors what we found is that most vendors don't actually have access to a banking account at all so repaying a lot of the vendors became something that could be impossible as well. And so we actually basically see that means almost four line shadow banking processes. Where? What up? Where we actually had some larger vendors in the community who had liquidity in their own rights that we could actually use to pay back the smaller up vendors. So this is Lloyd she's one of the vendors who works with vendor watching and she had she had a larger throughput of money inside her community and so it was able to act as that buffer so smaller vendors would actually come and when they needed to cash out they'd actually go to the transfer their dye credits over to that vendor and then receive money back. One of the challenges around this is when we think of banks like we think of them as like in the absence of like total economic failure is basically having like cash on hand. Right? We don't think of like a bank run being like a very real problem on a day to day basis like you can't even go to an agent and you expect it to be pretty irregular for them to have that are physical cash to pull out. Um In the communities when you start to use sort of a shadow banking process liquidity becomes like this really really like constant challenge and you hear stories of like it is totally normal for like these sort of micro vendors to actually just run out of money on a day to day basis. So people have this expectation of like trying to cash out and then maybe they'll be able to do it on that day or maybe not to maybe they won't be able to use the vendor just doesn't have any cash on them at that station. And so one of 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 of the system actually have enough liquidity to do these cash these cash outs. And this is something I think is really exciting about like starting about swapping to entirely digital processes so that you can actually start to know liquidity becomes less of an issue. But you were talking about how like like $10,000 bill $10,000 can be chilling works basically would likely possibly be rid of. Yeah. Yeah. So $10,000 there's the highest denominator bill and if you walk around with that in a typical village or slum like you're going to spend probably an hour maybe you know like trying to break that into smaller smaller bits and usually it sounds like you would pay her for it and she'd be like hold on a second and then she'd just leave her shop and like she would come back to like maybe $10,000 in two minutes you know you hope she comes back and yeah I mean actually the worst thing is like if you're my tip to you if you're a foreigner and you're like if you can carry your own change definitely do it because you won't get that bill back So I think that's everything I got in terms of a lot of the challenges way to the first Is there any questions? Yeah. I've actually worked on a project to try to implement M-PES actually because after it was acquired by Vodafone they started rolling helping communities 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 concern while carrying large amounts of cash in Europe is yeah right and one of the aspects is that people are just used to having physical cash or settlements and like there are some countries in which the access to cash is very prevalent but there's still additional benefits for example it's like you have cash but you can't pay your mortgage in cash right so they try to actually implement systems in which 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 yeah so one of my favorite stories in the Pacific Islands is when someone an organization tried to implement mobile money in the solid islands and what we've found is like there's something really critical about the physicality of things because the physicality of things represents their existence in many ways and this organization basically got the messaging around mobile money like just completely got a problem and what they found was that like there's these stories of these people who would go to their like local vendors who had the cash and could act as these liquidity points and say here's my you know then pays their account I'd like to withdraw all my money and so they withdraw all their life settings they sit there they count it all and they go okay put it all back in place and it's just because they want to they wanted to be convinced that like this physical 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 didn't actually because they experienced hyperinflation within their lifetime so like they would take it out and they would literally bury it yeah so this is so the that I want to recently introduced plastic banknotes and everyone said the best thing about the in plastic banknotes is you can bury them ground for longer without them watching that is the revolution in banknotes but yeah so I mean these are like it really comes down to like I think like even Japan is discussing this example of me where this is still very much like a cash-based economy and I I would be moved to talk about like what single defining factor is like sets whether this thing is going to work or not it's you know far too complex I think it also has to do with the telecom provider yeah just like for example in in Zimbabwe if you have EchoNet which has EchoCash you know that does okay but you know in Kenya the Faricom is basically the government like it's huge it's massive and they control everything in so many ways so it just depends in countries where the government is less and eventually the government and the businesses you know I think that dynamic is really is really important I think the other thing is is that like I mean this is like all digital digital financial literacy things and all banking like trying to bring everyone on to like being banked it all comes back to like what's what's the value proposition actually for things like having money in a digital form is not that value proposition in its own right doesn't just because something's now 1 to 0 instead of digital don't make it better and what the number one reason that like Kenya works is because we're solving this problem of like geographic boundaries right people hate it the process of like taking money from like their local like getting money back to their local communities and this is something we've found specifically as well like the single there's about three things we'll notice in like two terms because payments like how they actually provide us number three is cost number two is like trust how much you know and your family members recommend this page right versus this one the number one thing that actually determines like choice of payment provider is locality people just very good reason cannot be bothered to drive four hours to their bank right so if you're in a community if you're in these like concentrated you know European communities where you've got an ATM around the corner or you know there's like geographically everything's quite concentrated then this motivation of or I don't you know I can get cash out like right now there's something a lot stronger or like the means for like providing a legal process just isn't there as much anymore because you don't need to worry about how to move the money actually I live in Germany recently I saw a news so the exact news report about rural Germany they have these the folks who have actually a car with an ATM running around because they have to close down on these ATMs that's fascinating and they're actually too costly to operate and that's in the country which is also very cash driven so maybe this is like even an emerging economy so yeah you know a unique problem I wanted to ask though about the privacy concerns of all this is that just kind of a first full problem and do you have to give it up in these situations especially in FESA 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 pool of information right there yeah this is like I mean this is something that we we're still working because we can do an anonymous thing between an individual and their die account but the reality is is like the die account is a full network right you can see every single transaction that's going in there because we're not missing the money or anything like that and so it's something yeah it's something that I think it's like not resolved complicated for us it's like how do you ensure that this is like as private as possible and how do you reach those balances one of the things we've found is that one of the big selling points that allows us to get around this regulatory regulatory challenge is that Reserve Bank to just especially in the Pacific Islands like just totally terrified of being blacklisted by like international government bodies or like inappropriate money or anything like after protection and stuff like that so that was actually on making you blacklisted until like a year ago because they were just too limited with the way they were treating regulation it was too easy for people to want to make and the blockchain makes this a lot easier so it's like how do you match like here's something part of the government this is like what is good for us exactly I just want to supplement question to that so part of that though is like that you were talking about digital literacy yeah but privacy literacy is there any literacy or is it even relevant yes no so this is like super interesting but I'll promise I'll continue and this is this is actually from the humanitarian space there's been these attempts to basically like what these communities office is not worrying about and not worried about it but they absolutely understand the consequences of this and one of the reasons they like the cards is the beautiful thing about a contact as a handkerchief or something like this is the only thing that is used to prove that it's yours is the physical possession of it it can be that simple which means that you don't have to have any other account information to prove that it's yours right if you have it it's yours that's how our wallets work right I don't need to have my name on a wallet with my money in a tool to restore paying people for it people really like this and there's been a lot of cases in communities where some sort of biometric-esque process has been used so at the very things like taking a photo of someone and people find this really, really disturbing to see like when you go make a payment so we go hang on you have my face attached to this payment account and some NGOs have tried to basically say that you know people don't care about this because the usability is so much nicer than the classic example UNHCR uses biometrics to authenticate all of their sort of NGO level going into a store you want to get your food or scan your virus and give you your food and they've said it's okay because the usability is all high which is actually it's why if you don't need to remember a pin you know like by the year by your virus it's great but communities like absolutely they hate this because this that's the written up refugees they're totally worried about this data being handled across to the Miami government that have basically been you know oppressed using this data and the thing is is that they don't really have a choice like there's this concept of consent and then there's like non-coercive consent so if you're a person that like has no other good alternative to like how you're going to get your money get your foods and vegetables and people are like well you can either have your virus scanned or you can go and starve and die that's not really consent right that's that's just coercing someone that's having their virus scanned and it's something that's just like like you know put on the rug and said I'll be okay with this then I'll be not too worried about this and it's absolutely not true so it's something that's like I think yeah I feel really sad I was a little sad probably you get this asked often but with cash like you can easily divide it so you don't have one point of failure so you can leave half your cash with your family and then go and go shopping but with the card you take it with you and if something happens to the card then all in one is gone basically yes so we actually we're possible so when we're usually in the past we use them for cash aid programs so what I mean is that it's money it's just you know it's like a weekly basis it's not like no one has high W on these cards at any point we follow collectively we follow the exact same process that you would have if you have to have a mobile for now which is the card is tied to one account and then ideally you have a secondary account that is not directly tied to the card and you have some highly authenticated play that is less user-friendly of shifting money between the two where possible but that once again requires some thresholds of literacy to put into the card how do you think that is? I think though if you could put some context around why you guys did the card because it was around the emergency relief right it's like it wasn't so much that it was meant to be able to circulate within the community it was tied to this kind of like you know pull cans do rubs how do you get money quickly into the ground without having to spend time registering everybody after the parallel right and and I think that's if it's something where they want to use as a community currency to circulate it then you probably have a different system that you might think of or a different process yeah I mean fundamentally cards aren't great for community currencies like we were all talking about because a card doesn't really what you want in community currency is for everyone to be able to act is basically both a consumer and for a buyer and a seller right because you're look usually you will accept community currency in exchange for you know a good resource and you've grown but just a different within service or someone else and a card is a like it's just a one way for it but so it really doesn't work in all context any other questions to take care of sorry to heart back on the privacy issue as well but for a cash donation project you do have to kind of identify the individual not necessarily through biometrics but like it's definitely part of it there's a whole registration process so you do have to kind of create a digital identity to tie to the Ethereum account okay that's quite a scent this one's good well it's not actually I mean I mean the the real question I had after this is like that like so you have a personally identifying information and then the second part is that like who runs the nodes of the sidechains because you kind of manage the data and if you have the ability to de-anonymize every account and anyone who has access to that internal sidechain that is like basically everyone's entire financial industry yeah that's kind of I was wondering like where does that data actually sit because it's that balance of like decentralization but if you actually put it on mainnet it's like broadcasting your financial history on Twitter right now yeah yeah yes okay I'm going to answer the first one first okay well but I hope there's actually not really a question there but yeah is that anyway so we had real trouble actually doing like KYC on each individual and the most common reason we found it matter was it was just like people never spelled their name saying on the way it was just ridiculous so you you couldn't actually get enough documentation for each individual to actually cross-check them enough to actually give them a full like KYC check and so like even people's dates and birth by days months or even years between you know birth different gross losses this isn't like you know something serious popped by people to consider like anything from the government it's just like the nature of like document keeping these communities right and it means that these sort of processes are like direct cash out just don't really work so what we actually do is we actually we play a little game with the regulatory system and we actually create a we use die we use the dies like the story value type inside the entire system but we actually wrap that in a secondary token and the secondary token includes a white list on it and so you can only so when you have a secondary token you can only convert that back into dye which is a fully very very good token and look if you're on that white list and so that white list is exclusively reserved for people who have KYC documentation if you're not on the white list you can still trade it with vendors on a day-to-day basis and we do KYC checks for the vendors but then you can't cash it out of time we just don't know who you are and what I really like this is it's basically taking one token and making me two things to two different people depending on their level of verification but it means fundamentally at the core it means that we can safely give these tokens to people and we we can have literally no idea that they are but because we know they can only spend it at these vendors who I know are selling fruits and vegetables or clothing or something like that not you know hand-to-the-air goff like this I don't know where you're going buy an air goff vendor um it means that we avoid a lot of those debates around like whether it's because it's KYC or not because now it's a neat voucher rather than an actual piece of data processing or good good processing so um this news story might actually have been about your work but there was like a 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 in which you kind of like we didn't get to everyone but we have a trust system that said it's like we have trust parties that are able to kind of like do it before us well so so what yes what we do is you you end off the tokens to everyone the tokens of the actual cryptocurrency and then you do you do you do you do KYC on the vendors and like okay this is going to give us coverage we know that you can buy 90% of your things through verified vendors so now we we sort of have that coverage does that make sense yeah it does it does okay yeah in Kenya we use the telecom as our sort of proxy KYC so if we know their phone number they already went through our KYC process to get that line and so you can identify who the person is by that phone and then we store all that information though off-chain and then the transactions though right now are on a public blockchain so if you do if you were to go in and try to find out the wallet ID of that that user by going through the community of doing transactions particularly good but you 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 coinbase of wallet management system in place right that it has that identity but then we're still using a public ledger right now yeah so we don't have a good answer to your second question that is the honest trick regarding who's running the nodes yeah because we're on we're on POA which is the public sidechain oh you're actually doing it on the xdi chain yeah xdi helps with those timing issues and cost issues got it got it I think you're running your own implementation we're running we're on the xdi because they're credible yeah I mean it's the same infrastructure and they're way below capacity so it makes sense yeah and I'll I'll talk about like a quantifiable management is a top chain it's a good but let me yeah some chips so what's kind of the flow if there's a disaster I imagine that you got to get everybody onboarded right you've got to get the merchants onboarded the the users onboarded so walk through just kind of the typical flow do you I guess is it you work with the nonprofits on the ground and they're the ones that are kind of onboarding everybody or yeah the flow though so so basically not for profits on water vendors and recipients I mean central type offices around like how we want to operate this company is that these sort of cash transfer programs are actually really great like the biggest problem with like the reason we haven't seen like any cryptocurrency spend processes actually come up within practicing countries I think is one because regulation of the risk experiencing right now and to it's this cold start network problem right you can't spend you can't even if I had crypto again right now I can't walk into you know a more sort of hey I'd like to buy something with my crypto yeah I think I'd be like who are you who are you um and so cash aid programs are actually this really awesome way to keep stuff these vendor networks inside communities because what we've found is that if you tell if you tell vendors we'd like to get you onto this something that you're carrying cash program um oh sorry you know some payments like like no it's a lot of effort if you tell them there's like a whole bunch of money you're going to be injected to the community and the people who would say that my payments will be once again the profit there's something a lot more willing because now it's just a financial decision and so we work with the NGOs to basically set up those networks um the NGOs do a lot of that work they're actually selecting recipients so we don't we don't have a strong opinion where our payments like not that beneficiary selection like and then the vendors is like a negative just regular sales versus um so that happens pretty quickly um can I think in the red cross like so the red cross will have like 100,000 volunteers in the country and I'll give you an example like in Malawi when they happened there was a flood or sometimes we can't get the money in the country quick enough we can drive and drop to South Africa full of cash across the border and then dumping them in a building actually we didn't air drop before I mean you don't know when you get the cash and or strapping to people's bodies so like we have to put in the context of how we do cash delivery cash assistance today not everybody gets registered and you don't know who actually is getting cashed because you have to drop it in a zone which can be totally devastating and so even getting this far is pretty remarkable and and I think you know the nice thing about what makes and the project is that they've cut down the registration process really quickly but you're already you're pre-defining who these people are and you gave them in the system that's also with the community currency it's good to because then you start to build this network like a mesh right where people are already pre-register and then I think it really important thing around air docking is that if there are like droughts or issues since they're already on the network you can start issuing tokens I mean that's the one thing with the community currencies that you can actually provide the leverage and as the peril gets more more proof positive you can increase the number of tokens but if it is like a false positive you can extract the tokens and learn along because the problem we have is we do cash if people want to have cash we've gone whereas if it's token based or or eval your base we can just distract it and then back to zero where we were so I mean it's still really archaic and how we just bring that it's getting better but not not a lot of areas with the phones getting kind of there's the ability to do like self wallet creation right so you just dial the short code you've never been on the system before you've created a wallet instantly to use within the network and that's you know there's the viral growth of it you go in and do implementation that can work as well but once people have those wallets like there's also information about them you know like so it who are the how who are you going to airdrop to there's already that network there and people can self register that that speeds things up dramatically this question is back yeah um I was wondering if this is a enabling system where people receive money they can start to transact two ways that they weren't able or receive money so instead of to make it money for a community could be possible to invest more in your community I don't know if you're going to talk about the way I don't know I mean you're better to talk about like I said that the community can't seem to the others to invest in the community I mean so this is the whole idea of like putting you know this idea of having collateral behind these systems is to basically say well can I can we invest into the growth of that economy so do you remember this this little bonding curve that we're 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 that profit back into the community and even you know using this potentially as a tool for remittances so I that's at least on our side that's 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 again to to do all these things so 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 of a micro finance for instance right like they need seed capital and so if there's a way to inject seed capital into these currencies there's there's the potential to really grow these economies much more one of my one of my favorite things that sort of has come out of these digital payment spaces in these emerging economies is the cost of like micro payments for like daily needs and so this really innovative program I think it's in Kenya where this organizations come in and basically we've been selling efficient hot water heaters to give you these all efficient small payments I can't remember which one it is and none of no individual can afford to make the payment for this our right on the spot because it's quite expensive but it's something that's going to be an end return for that family in the long run it's a lot better than the existing system they have in place and so what they do is to buy and hook it up to your end payers account and it just takes out a tiny payment each week for one favorite space of like a year or so and this would be something that would just logistically be impossible to like collect these you know that's what like 400,000 people on it would be there's no way it may connect your sense to like like you know a shelling at a time around these communities on a monthly basis and so by just having you talk to this like digital payment system that actually it's now feasible in a way it wouldn't be but I think it's fascinating because it's something that's just a lot twice into the process it's got an end to cover yeah but end to cover is to load it's a mobile lending system they do solar panels solar panels sort of stuff like that's really cool yeah next next everyone thinks so to the point about this investment side just just to add a little bit more color to it that you make the world why humanitarian budget is about you know 29 billion dollars a year and it's only up 1% over last year but the funding gap is over 30 something billion but when you look at kind of funding close you have like remittance around 550 million billion dollars a year to remittance and like foreign direct investment it's about the same about between those two it's about about a billion dollars so from remittance and foreign direct investment and then you have private equity funding which goes which is like kind of long time goes on forward to 300 about 300 billion a year and so the point about getting tapping field markets be able to play in that kind of net this is humanitarian and development assistance opens up this kind of floodgate to new financing and that's what these systems allow for the development trails to get in these communities and build a JCC value because if you invest in one community it helps the other network it has like this network of facts and so as an investor you can invest in one or two of these communities and see the uplift happen around and then get your cash out eventually I mean that's that's like like I bring this money because in Brazil we had social point of some part of social point that work is very like this community or that music that social point developed so much that it was much more efficient than government's problems that acquired money by taxes invested on health infrastructure and I have think as it's a good to have a a huge amount of investment and we are speaking about government footage being better applied for social impact or all of those communities and you started to mention on the bottom folks for that do you have any models for that or even prototypes of this working? Yeah I have got some agent based models that you can find online we go ahead and throw on GitHub as well so you can look at that and then I mean there's a lot of modeling around bonding curves right now coming out block science is doing quite a bit of that work as well which is very cool and the bonding curve we're using has kind of we basically forked a version of the what was originally the bank or protocol and it's got a very simple set of equations on it but it's been pretty battle tested I think they've put two billion dollars through the systems so far so yeah it's a preventable next time but yeah just just connected to me and I can send you that stuff yeah awesome to you Chris yeah he's the department you're in a lot okay I'll go first so if we wanted to donate get involved like what nonprofits is it right across is right across doing stuff here like what are ways in which like it sounds like you're like a tech startup and I don't know are you on a profit we're on a profit yeah but like what are ways in which we can participate in these things so I can see what things that all of us are working on a project called community inclusion currencies that we are building this global open source platform to allow any organization to do this type of work and the thing is right across which is where I'm from and we brought together their break across network along with Accenture and two other groups to build this platform and we're looking at like seven or eight different countries today so you can either go through break across you can go you know through one of these guys here and and or put it in die to directly give the dire I mean you know there's lots of rails in there but with that it but you know to really move the market it has to be something that we seem to get in some ways in some ways but it also doesn't have to be an estimate it could be what $10,000 dollars it just to see see Bitcoin right or $5,000 so it just depends on the quantum of cash and what's the project called Community Inclusion Currencies is there a website a project so Nick Nick is doing sort of I like you I like you not yet we're working on it again cool I mean you can on the terms of community currencies if you go to grassroots economics or look at grassroots economics you'll find what we've been doing for the last 10 years or so and this is sort of scaling that up and you know you know our organization is really trying to just do all the the awareness and you know create MOOCs and do the documentation and train you know and go and create the trainers or trainers well Nick's organization right now is they've just open sourced their whole platform so like all the stuff of bringing in ussd and all these payment rails is what he's he's working a lot on so and that's they're they're looking for BC I believe yep yeah definitely they say that's haha I think that's really exciting because they're basically saying we have here's an open 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 e-money licensing and all that stuff so I think it's a great investment on that side and and for us what we really want is the ability like something like Kiva where you could just or you could say look here's $200 to see the reserve of this women's group for instance you know and those types of things like quadratic funding always always kind of cool funding mechanisms can fit really perfectly into just saying we're going to push some money into these reserves and that's exactly what Red Cross is doing as well like how to parameterize how we give cash out to communities and then look at those impacts there's we have a we have a website called www.sarafu.cc which is sort of a temporary like dashboard for all the data that you can so you can look at I'll just write it up here hopefully it's it's up now but you can look at just some of those kind of like impact measurements sarafu.cc this is just the last year we've got about like 70,000 transactions on there and you know we've we've anonymized so you don't know who they are but you can look at the wallet IDs right and so you gotta 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 we just but this is this is among about six you know it's like I think we're at 5,600 users right now and they've done about 120k usd of transactions just in the last few months and so like the systems are starting to churn out a huge amount of information so it's and that information all 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 you know picking out like sustainable development goals and being able to say these transactions relate to these wash outcomes for instance for water and sanitation yeah there's a huge amount of work that needs to be done you know in terms of like also like customizing localizing the system like once this platform is really rolling and you know ideally even by in november we'll have I mean things are working but it's like sticks and welcome kind of you know stage at this point and once that's up there there's a there's a huge need for customization for data analysis for prediction for you know marketplaces you know like so bringing this to Bogota in colombia you would probably want a GPS app that's going to tell you where to go by or how to use your currencies and and marketplaces all all kinds of stuff like that so there's a there's a lot of players that need to be built up and localize completely so hopefully that's you know app store has you know concept where you plug-ins and stuff like that so I mean yeah there's a huge there's a huge there's a huge there's a huge there's a huge there's a huge there's a huge this is going to like totally change I mean and and it's going to get up for it because it's so $440 billion is set globally to like version of going because each year the most is and the overhead for that process right now just absolutely huge because you have to go through the banking services and the banking services is just charged you know up to 20 percent which is just my it's basically managers to the of organizations like Transurrice that got around is basically if I don't care to be a matching. The idea of I'm trying to send money between the US and Australia, and someone's trying to send money from Australia to the US, will rather go through the banking service so you have my money and I can have yours and done. Which is really clever, because it skips that middle process, but it only works in places. It only allows you to get banking processes in places where there's a symmetric flow of money in both directions, right? The second you've got all the money flowing in one way, then there's no one to match with. So the process breaks down. The really cool thing about these bonding curves and what we're doing with cryptocurrency, once you have the ventral network on the ground, you don't need a matching. So you can do asymmetric flows of money into places like Kenya. And we do some things that I'm close to today about. We basically re-peg to the local currency using the synthetic assets. We take the same concept of what DAI does, and then we do that to DAI again for more time. So good that it's pegged to local currencies and people aren't exposed to like exchange rate fluctuations. And that re-peg process is a lot more efficient than what goes on in the regular markets because it's basically, you can agitate things through your swap style exchanges. So we think there's like some really interesting things that can be done there at a portable scale just to totally change the way we do financing and get money to use. I actually was going to ask about that because people are exposed to U.S. style that are at a price risk as well, right? And what is it like because most developing countries that have rather used the U.S. dollar except obviously their governments would probably fall apart if they did. So isn't there kind of like a balancing act so that if you're very successful and you allow people to essentially completely escape the shackles of their own like local currency, would they just pay to develop rights? Two answers to that. One is that we tend to like, we've noticed people often, we haven't worked in the community yet where there's been like monetary failure or existing financial system breakdown. We like working communities where actually that asset to the financial system works well. And the reason we do that is because then we can use this synthetic asset process to pay to local currency. And that means that a government retains control over their monetary policy. So if they want to artificially lower the price of their currency by an order of magnitude just by printing a bit of money, they're able to and there's nothing we can, our system won't disrupt that. That's just a feel, not feel for it. It's just to design a pragmatic choice of tempo that like that is the way you don't use government since the way you end up not in jail. So yeah, we have where you get to operate in a place like this. That's the way that's well done. Kenya, there's a blockchain task force there in the government. They're very excited about this idea of potentially creating a digital kind of chilling by their own and treating these exactly as they would the private banking world. So they create reserve currency, banks can leverage that just like they do now. They have 10% reserve apartment. Well, we're just saying put that on chain and make it honest. Because you don't really know does the bank have 10% 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 act like that. 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 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 we're having some insurance or collateral requirements in their own token, wonderful, that could be a really wonderful way to bring governments on board. And I mean, I don't think Chase Bank should issue dollars, you know, or in Kenya, 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 they have. But they start, because we've had four banks over issue supply of credit and go bankrupt in the last four years. And it's caused huge harm across the world. I mean, this is not just Kenya, right? This is the whole world doing this. So if we can create honest banking this way, you know, and redo how we think about fractional reserve and put it on the blockchain, I think that would be a huge win. So I tend to love this thing into that sort of like, there was a movement towards like transparent fractional reserve or something like that. That would be super cool. Just to extend on that, I think like the concept of like a coin or some sort of global reserve, what we like about creating financial computing and actually being used like a payment process in a very new context is just like a totally naive myth. As, including the suggestion that it will help save a little bit of small business, things like ripple. Like communities fundamentally need to work on the currencies they're used to. And so if you're talking about trying to use something like Bitcoin to shift your money efficiently between one community and the other, if you need to take your Bitcoin, your ripple, and go through some sort of exchange process with a bank to then convert that into your local currency, you're basically missed out. You're going through an existing bank process again. All you've done is add an extra layer, back into the pocket, out of the first place. So really these sort of synthesization processes and these ideas are pretty much on-chain reserves. Is your way, this is actually going to create like borders. Is cash aid becoming more and more the way, like is that becoming more and more common among the ways? That's it. So it's going 20% of you on the end. Okay. So the red cross, is that something that is happening more and more just like straight cash aid? But the global cash market right now is about 4.7, 4.8 billion dollars. The red cross accounts for a billion dollars a year. And is it on, like is it growing quickly? Yeah, the red cross. I mean, we start actually looking at cash in itself and on it and understanding what that wants in a few years ago. It wasn't part of it. The United Nations is about 2.6 billion or so and accounts for probably like 15, about 50% of our overall aid and it's growing. I mean, 40% is like, I don't think it's quite 40% because growth, that's a huge, I mean, now we go from like five. So you're a year at a date and it's not 10 billion dollars a year starting with cash. It's growing that quickly. It's 10 billion dollars. 10 billion dollars now is not the cash rate. And the latest number from 2018 was 4.6. I don't know if I totally agree with that. Because how do we get cash? No, no, no, because if you get cash in different ways, it's like cash to other organizations. How do they actually calculate what that cash is? So I'm trying to cash out the digital cash to about four points. But whatever, still a shitload of money. Yeah. So I just kind of just jump in. So it's, yeah, I worked a lot with these guys but like my specialty is cash transfer delivery and humanitarian assistance. So I think what's important to know that's like not immediate knowledge in this space is that the World Monetary and Summit had a bunch of commitments, grandfathered calling from the world's biggest donors but also from the member countries of the United Nations and local governments saying that one of the number one priorities today is to deliver the maximum amount of humanitarian in the possible 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 considered the gold standard in humanitarian practice today. And that's what's really driving a lot of this growth. But the problem is that those actors that are delivering don't necessarily know and are not necessarily aware that there is now a technology that's like programmable money that can allow them to make their systems more efficient. So in that sense, I think it's a massive and untapped market of endless use cases for the blockchain sector to engage in. I think we're out of time. So I'm gonna put my Twitter or telegram is dnjdynjw, so my initials for this last calling. So if you want to get involved, I think. Have a good week. My name's Jan W. And Will's is WFO.