2013
07.02

I’m inspired! And I’d like to thank Chris Rezendes at INEX Advisors. You see, he presented a talk at our Connected World Conference a few weeks back called “Pursue Impact.” His theme was simple, but powerful: “We don’t need ease, we need meaning … it’s not about tech; it’s about changing the world.”

I love his passion for the role M2M can play in changing the world. So I’ve been keeping my eyes peeled for stories about how technology can make a difference. Then I was introduced to Zach Harvey. Harvey is the cofounder of a startup called Lamassu Bitcoin Ventures. And he is looking to give a positive view to Bitcoin–and there is a role of M2M in his process (including sensors, a QR reader, and of course the digital wallet aspect).

For those unfamiliar, a Bitcoin is essentially a worldwide peer-to-peer digital currency that requires no third-party like a bank or clearing house. Think about it as being able to send digital coins via the Internet. Anyone using a free app called a Bitcoin miner can generate and accept Bitcoins. Transactions are stored in a digital wallet. It essentially is a digital way to exchange money for goods and services, something that many believe will play a big role in developing countries.

Harvey’s Bitcoin Machine (which can be likened to an ATM for Bitcoin) is building some momentum. The machine, whch was originally presented at the Bitcoin 2013 conference in San Jose, has been reprogrammed to accept pound sterling (GBP) for the BTC London event today.

What piqued my interest was the “changing the world” role this machine could play for developing countries, since so many are, as Harvey describes “unbanked.” Could it be a better way for people in these countries to get money to their families quicker? 

I thought it best to take my questions directly to Harvey. Our exchange is as follows:

Me: Please explain more about Lamassu’s Bitcoin Machine ATM and its importance in the role with Bitcoins.

Harvey: The Bitcoin Machine has several advantages over online exchanges:

1. No need for registration or paper work. Registering to online exchanges requires the banking system’s approval and it could take up to 30 days. Our machine allows you to simple walk up, put in bills, and have your Bitcoin within seconds.
2. You don’t have to put in hundreds or thousands of dollars to experience Bitcoin; you can start with a one dollar note, just to get your feet wet.
3. Again, the banks. There are 2.5 billion adults without bank accounts in the world, and about 11% of the developed world doesn’t have accounts either. All you need to use our machine is cash in your local currency.
4. Placement in retails stores, such as convenience stores and cafes. Their interest being using less cash (messy, requires counting, easy to steal) and less credit cards (high fees, chargebacks). Having one of our machines would allow their customers to obtain Bitcoin on the spot.

Me: Let’s talk big picture for a moment: Which parties do you see as ultimately reaping the greatest value from such a machine?

Harvey: I think the parties which will benefit the most from this machine are retail stores, countries with limited banking competition, and developing nations which are already using mobile systems for remittance payments.

Retails stores for the reasons I mentioned above, Bitcoin is simply the best technology for receiving payment, and our machine would make it easy for any of their customers to use. No need to be tech savvy, it’s extremely intuitive.

In countries where the larger banks have more control, they can and have been claiming that Bitcoin is too risky for their customers own good. So Bitcoin enthusiasts in places such as Canada and Israel have had difficulty interacting with online exchanges. There is no way to transfer digital dollars without the banking systems, so all online exchanges must rely on banks for their operation. Our machine runs on physical currency, and is completely independent of the banking system.

That is important for developing countries as well, since so many are unbanked. By buying Bitcoins with their local currency, our machine allows them to be able to send that cash anywhere in the world. 33% of Kenyans are currently using the M-Pesa system to send remittance payments from the big cities, such as Nairobi, to the villages. Working members of the family go where there is work, and send the money back the family members. Bitcoin would allow them to work anywhere in the world and send the money back to their villages, only with lower fees. Our machine makes it incredibly easy to do so, since most of these workers are paid in cash.

Me: Explain the process of scanning the QR code and how this makes for an easy transaction for users.

Harvey: As seen in our demo the QR code is one of the quickest ways to relate info from a mobile device, or piece of paper to our machine. The other option would be to type in the entire Bitcoin address, and wait for everyone else to do the same. Plus, if you type one digit wrong, your money will be sent elsewhere.

By using the QR code that every Bitcoin wallet application has, users have an instant solution to transmitting their address to the machine.
 

I want to thank Harvey for taking the time to answer my questions. I must admit, I was not familiar with this machine, and quite frankly when he talks about how such a development would allow workers to work anywhere in the world and send the money back to their villages, only with lower fees, I started to think big picture.

Is it a game changer? Maybe. If anything, I think back to what Rezendes has been saying about how we need to look at tech with fresh perspective on how it can improve quality of life. And for those that missed his talk, check out his appearance today on The Peggy Smedley Show  for a powerful discussion that could change the way you think about technology’s role in the world.

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  1. “Traditional banks may not be happy to see their customers use alternate methods for payments and will probably keep a close eye on this whole Bitcoin phenomenon.”

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