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See it to believe it: Real-world applications are bringing people to crypto

If you talk to someone who’s new to crypto, chances are the first wall you’ll hit is, “can i actually use it in the real world?” Because the truth is, you can believe in the genius of the technology, you can believe in its potential as an investment asset, but it’s often not until you see it being used in the real world that the penny drops.

Throughout the making of the Pennydrop initiative, we heard a variety of reasons why people first began to believe cryptocurrency was the future. The vast majority of these answers were theoretical – “I realised Bitcoin was the future when I understood that it could do this.” But what of the ways that it is changing the world in the here and now? How is it impacting people’s lives on a practical level, solving problems that you encounter every day?

Payments and purchases

When Satoshi first published the Bitcoin whitepaper, there was a key problem that it solved. One that many others before had looked to solve in their own, failed incarnations of digital case. This is the ‘double spend’ problem – the issue that digital assets are relatively easy to duplicate and use again. The key word here is spend – a verb. Cryptocurrency was built to be used, to add new functionality to cash and improve on the financial system as we have always known it.

This is no longer just a hypothetical. Cryptocurrency has long been accepted by major retailers for a number of years, and this is only increasing. New startups such as Flexa have introduced slick crypto-payments platforms for retailers. More importantly, there are now a diverse array of retailers both big and small, willing to integrate their services. Among them are Whole Foods Market, Office Depot and Nordstrom. Starbucks has also announced that they’ll be integrating Bakkt’s crypto-payment service in the first half of 2020. Starbucks owns almost 30,000 outlets across the world.

We spoke to Vinny Lingham, founder and CEO of Civic. His aha moment was when he realised he could receive payments in cryptocurrency more securely than traditional banking methods.

“I ran a company called Gyft, it was a mobile payment company,” he explains. “When we started accepting payment in cryptocurrency, it meant people could pay us from anywhere around the world and we were guaranteed payment. Before that, we had credit cards, but the credit cards could be reversed and so people could claim there was fraud or people could use stolen credit cards on our service and we would lose the money.

“In the case of Bitcoin, once the coins are sent and we receive them, we know that no one can take them back and we can ship the goods. So, from a global digital currency perspective, the penny dropped for me when I recognised that digital money and the equivalent of being able to pay online without reversibility was the key to building out a crypto ecosystem.”

And it works the other way too, with a number of people seeing it used for a payment method jumping into the crypto market. Sonya Kuhnel, CEO of Blockchain Academy, has her moment when she witnessed someone seamlessly purchase a car without going through a bank. James Lanigan, Head of Marketing at Luno, had a similar experience. He was searching for a black cab on a chilly London evening in 2017. Upon getting into the cab, he discovered that Bitcoin could be his payment method. Manenga Mungandi first understood the power of Bitcoin when he realised he could send money across the world to any country. “I have family across the world,” he explains. “It’s always been really tough to send money to them. This makes it so much easier, and I love it.”

Seeing something you’re not used to, like Bitcoin as a payment method, in a place or situation that you are used to, can really start to make you think. Whether it’s buying a car or paying for a cab, people are starting to realise the uses for cryptocurrencies.

Lorien Gamaroff, CEO of Centbee, remembers reading about it in 2011 in an article about using Bitcoin as a payment method. “That was when the penny dropped because I thought, if this can be used in a transactional way, if people can actually use this to buy things online, then this is going to definitely work.”

Is this your moment?

How’s your exploration of the world of cryptocurrencies going so far? Let us know what you think! Maybe you’ve seen the practical applications of it in real life. If so, we’d love to hear about it. Drop us a line with your pennydrop moment on any of our social channels with #pennydropmoment

Why building a transparent society is bringing people to crypto

It has long been the mission of world leaders and governments to eradicate poverty and corruption. Their success rates have varied wildly, though, and you would be hard-pressed to find anywhere that poverty has truly been assigned to the dustbin of history. It has long been argued that technology, rather than legislation, holds the power to overcome such social ills – whether it’s AI, cloud technology, or even 5G connectivity. One of the most widely touted is cryptocurrency and blockchain. But could they really provide the foundations for a new and better society?

Throughout the course of the Pennydrop initiative, we met many people who first got into crypto because of its potential to help build a better society. Whether it was understanding something in the fundamental design of cryptocurrency that brought them to the realisation it was the future, or seeing first-hand its impact on a more personal level, there was a real belief that it could be used for good.

Power to the people

Cryptocurrency is uniquely positioned at the apex of technology and finance. It has been lauded as a potential game changer for society, poised to eliminate corruption, bank the unbanked, and redistribute wealth in a way that’s fairer and more equitable.

Those who prescribe to this theory cite cryptocurrency’s ability to give power back to the people. To eliminate current social structures and systems that disenfranchise individuals. To provide the foundations of a system that’s transparent yet secure. Where corruption is exposed and rampant inflation ended.

Cryptocurrencies can do this because of the technology that underpins them – blockchain. Blockchain technology is decentralised. This means that no one person, institution or government has central control. Rather, it is the network that is in control. Policies are hardcoded in and it cannot be manipulated to suit agendas. The financial system as it exists today is built on trust. But people no longer trust that it exists to help them – that it helps only people working in the industry. Cryptocurrency removes this need to trust people’s motivations.

Breaking free

Christopher McArthur first realised what a difference cryptocurrency could make when he was reading a moving account of a woman born into a society where access to financial services was restricted on the basis of gender.

Unable to have her own bank account, she had limited control over her livelihood and potential. Cryptocurrencies gave her access to banking and the power to forge her own path. As Christopher puts it, cryptocurrencies are about:

“People being able to harness their own value”.

That’s what this woman did. Ghostwriting in exchange for cryptocurrencies as payment, she was able to buy herself a plane ticket and seek refuge in a country where she had full rights. Now imagine if everyone had access to the same financial system and a fair chance at participating. No matter who they are or where they’re from. That’s the world cryptocurrencies offer.

Transparency and trustlessness

There were also those excited at the opportunities cryptocurrencies offer on a national or global scale.

The trustless and transparent nature of blockchain technology led to Tamarin Gerriety’s penny drop moment. Living in a Cape Town, where they are so focused on safety and security, she realised that there’s a huge lack of trust. “We live behind high walls, and electric fences, and our guard dogs, and our security companies,” she explained. “The thing we don’t have here is trust.”

A decentralised system flips that on its head. In a trustless system, it’s much harder for people to exploit vulnerabilities and manipulate information for their own ends. Open and immutable public records mean accountability and security – even for those who are most vulnerable.

The transparency of cryptocurrencies also caused Katharine Suy’s ‘aha’ moment. She points to those in countries still recovering from war and oppressive regimes, where corruption is one of the greatest ills that continue to hold them back. And as Katharine puts is:

“So many people take advantage of everything. The way to get rid of that is by making sure those avenues are no longer available.”

This transparency puts power back in the hands of the people. There’s no longer a need to take a leap of faith and simply trust others will act with integrity. All the players in a decentralised system have equal power.

From 1 to 8 billion

The issue of trust occurs several times throughout our interviews. Dawie Roodt, an economist, explains that his penny drop moment came when he saw its potential to solve problems inherent in the current system and the necessity to trust a central party.

“Why is it that we have so much trust in a central bank to create money? Why can’t we privatise money the way it used to be?”

Dawie believes we should let the private sector decide how money should be created. This would mean individuals making decisions, rather than a select few people. With blockchain technology, that’s possible. A decentralised system with no central control, much like the internet, means individuals have equal access.

It’s in your hands

Has the penny dropped for you? Or are you still exploring the world of cryptocurrencies? Let us know what your perspective is.

Why the promise of financial freedom is bringing people to crypto

“The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” – Satoshi Nakamoto

In the late 2000s, Bitcoin’s pseudonymous creator, Satoshi Nakamoto, set out to find solutions to the problems inherent in the financial system.

Nakamoto’s vision for Bitcoin was of a digital currency independent of centralised organisations such as governments and banks. In 2008, these entities had proved themselves poor custodians of the financial system. Many believed time was ripe for change. Time for a system that wasn’t reliant on trust. Time for a system without those who had exploited currency for their own short-term gain.

Nakamoto believed that money could be fair, equal, and trustless. To do this, they wanted to give control back to the people. They set out to create a decentralised financial system where you have control.

Who’s in control?

The idea of a decentralised financial system is extremely popular. For many we spoke to during the Pennydrop project, it was what brought them to Bitcoin. Centralised control over currencies dates back centuries, and back then it made sense. But not today.

Today, we live in a digital age. Technological innovation has exploded over the last two decades, driven by the desire to make things cheaper, safer and easier to use. Our financial system, unfortunately, hasn’t quite caught up.

For economist, Dawie Roodt, crypto affords users the opportunity to make decisions for themselves. He believes that “people are fundamentally good” and they will mostly make the right decision. Therefore, they should have the freedom to make their own mistakes.

Ultimately, as an adult, you wouldn’t ask your Mum for permission to attend a party. So why do you need your bank’s permission (and a whole lot more) to send money across borders?

Roodt also explained the difficulty he had when wrapping his head around the concept of Bitcoin for the first time five years ago, suggesting the concept of control is going to take some getting used to.

“There’s this idea for a private kind of money and it was difficult for me to get my head around that because we’ve been brainwashed to believe that it’s only a government that should be allowed to or can make money,” said Roodt. “Why is that? The only reason it has value is because we believe it has value. It’s exactly the same as the Rand or the Dollar.”

“I realised that Bitcoin was to money what the internet was to human communication”

Our lives rely heavily on the expectation that our financial system will function and deliver the way it was intended to, every day without fail. But that’s not possible. There are so many external factors that affect our money that we, as individuals, have zero control over.

In countries with political unrest, access and equality are giant obstacles for people to manoeuvre around.

For entrepreneur Simon Dingle, Bitcoin brings transparency to the financial system. It removes oppressive forces such as censorship and corruption and opens money up to everyone.

“I’ve always been excited about open-source software, open educational resources, open content movements and really the distribution of our human networks. It’s always for the better […] Money was always centralised, opaque and exclusionary. The penny dropped for me when I realised that we can use the internet to create a financial system that benefited everybody potentially – that was resistant to censorship, that no-one could take control of.”

Today, we’re no longer only interacting with people in our immediate circle, or within close physical proximity. Our world is becoming increasingly interconnected, which means our financial system has to follow suit.

“Governments can continuously debase and devalue their currency”

Laurence Tilli, founder and manager of crypto group, BBAG Community, went even further in his Pennydrop moment. He explained to us the negative consequences that centralised control has historically had over the financial system and how he saw Bitcoin changing that.

“Governments can continuously debase and devalue their currency,” he explains. “And the more money central banks create – or whether it’s through quantitative easing – the less purchasing power individuals have. We saw it in the 20s with the German Papiermark, in the 40s and 50s with the Greek drachma, the Zimbabwean dollar early 2000s, the Venezualen Bolivar.

“Since the Federal Reserve was created, the US dollar has lost 98% of its value. Bitcoin is a finite resource. There will only ever be 21 million. It’s the first time we’ve had a currency that supply can never be changed, it can’t be manipulated by any central power. So there’s no possibility for Bitcoin to be debased as a currency.”

When did it finally sink in for you that cryptocurrency is the future? What excites you about its potential? Was it the shiny new technology? Taking back control of your own money? Was it just plain old human curiosity?

There’s no tale too big, no tale too small. Whether it’s a video, a social post or even a blog article, we’d love to hear from you. You can share your story with us on Twitter, YouTube or Facebook using the #pennydropmoment.

Share your moment today and help inspire a movement.

Why the technology behind crypto is so important

The benefits of cryptocurrency are many and profound. Over the course of the Pennydrop initiative, we’ve heard people from all walks of life discuss the myriad ways it will impact the world we live in. We’ve heard how it’s going to solve problems across the current financial system that nothing else could – everything from the truly significant, such as banking the unbanked, to the seemingly trivial, such as providing a more efficient way to buy a car.

However, while the applications of cryptocurrency are undeniably important, cryptocurrency is not just a financial instrument. There are two sides to every coin (geddit?). The functionality and benefits it offers are only possible because of the strength of the technology that underpins it, because it works. And we encountered many people for whom excitement about the technology was what brought them to the conclusion that crypto is the future.

Money for the digital age

Cryptocurrency is money for the digital age. It leverages technology in such a way that it’s able to integrate seamlessly into the digital ecosystem. It’s native to the internet, which allows it to work in conjunction with other technologies. A square peg in a square hole. Not money as we know it today – a round peg in a square hole, developed and built for a different age and ill-equipped to exploit the potential of the internet, connected devices and AI.

Bitcoin creator Satoshi Nakamoto was not the first to come up with the idea of digital cash. He/she/it was the first to come up with a solution to the double-spend problem that proved such an obstacle to those who came before him/her/them. The technology that underpins Bitcoin, and the majority of other major cryptocurrencies, is known as the blockchain. For many out there, it was the creation of the blockchain rather than Bitcoin itself that was Satoshi Nakamoto’s real discovery.

Lorien Gamaroff, CEO and co-founder of Centbee, explained to us that crypto is simply a mechanism for sending “digital assets from one owner to another without there having to be a duplicate.”

He gives the example of an MP3 or a digital photo. “It’s very easy to make a copy of that digital photo or MP3 and send it to multiple friends.” Blockchain solves this – and theoretically it’s not just applicable to Bitcoin, it could work for any digital asset.

How it works

The blockchain is essentially just a new way of storing data. It’s a distributed ledger which stores all the Bitcoin transactions ever made across a vast network of nodes and miners. This means there is no single point of failure. This ledger is completely open and transparent, visible to anyone who chooses to find it on a block explorer (it’s pseudonymous, so no identities are relayed here). It relies on a consensus mechanism, which means that each transaction has to be validated by the majority of nodes.

Where fiat currencies are issued by central banks, new Bitcoins are “issued” to miners via a block reward for solving a block, which is then added to the blockchain. Bitcoin’s consensus algorithm is called proof of work. In proof of work, miners compete to add the next block in the chain by using special hardware to solve a complex computational problem, which produces a hash – a seemingly-random 64 character output.

Proof of work ensures that the next block in a blockchain is the one and only version of the truth, and it keeps powerful adversaries from derailing the system and successfully forking the chain.

Riccardo Spagni is a world-renowned developer and the former lead at Monero. He explained to us that it was the security properties of cryptocurrency that first brought him to the space, although he started as so many before him have – heavily sceptical.

“A lot of software developers claim that ‘oh this is secure,’ ‘this is robust,’” says Ricardo. “And I always go, ‘Oh, no it isn’t. Let me see if I can figure out how to break it.’”

Ricardo spent a lot of time initially trying to break Bitcoin’s consensus mechanism. “That was really difficult,” he says. “And when I realised I couldn’t do it, that it wasn’t feasible, that I had really come to an understanding of how Bitcoin’s consensus mechanism works. That was my Pennydrop moment. That was when I realised this is a thing that could last decades. This is a thing that could really shift power. That could change the dynamic in a lot of ways.”

A secure asset

Bitcoin’s security is the reason it works. The crypto in cryptocurrency stands for cryptography – an ancient science that protects information from nefarious parties who would use it in ways not intended by the originator. Many, like Ricardo, have tried to crack Bitcoin, but it has still never been hacked.

There is a common misconception that blockchain technology is too complicated to understand. It is this complexity that dissuades many from entering the space, fearful that they simply will not get it. But how much do you know about your bank’s security systems? Do you know who has access to your funds? Who could go in and steal it?

For the end-user, the technology that underpins it might not really matter – who cares when you’re buying a coffee with Bitcoin or sending it overseas to family? As Simon Dingle said to us, “I believe that one day, it’s something that you won’t have to understand. It will just make your life better. Very few people can explain how their smartphone works. It doesn’t matter because the narrative has become about why it’s good for them, what it enables in their lives.”

This may well be true, but as we realise the financial and economic benefits, and as new use cases for blockchain and cryptocurrencies emerge, it will all be possible because the technology is so strong.

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