WEBVTT - Here's How People Are Using Cryptocurrency in Venezuela 0:00:12.440 --> 0:00:15.880 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:15.960 --> 0:00:20.239 I'm Joe Wisenthal and I'm Tracy Allaway. Tracy, I think 0:00:20.360 --> 0:00:23.560 that recently we may have seen one of the most 0:00:23.760 --> 0:00:28.040 pivotal events in the history of money. Uh, that is 0:00:28.040 --> 0:00:30.160 a large claim, But I think I know what you're 0:00:30.200 --> 0:00:36.640 talking about, Facebook's announcement about starting its own cryptocurrency called Libra, right, Like, 0:00:36.720 --> 0:00:40.080 I don't necessarily think it's definitely going to be or 0:00:40.120 --> 0:00:42.720 that it's going to work, or that it's gonna take off, 0:00:42.840 --> 0:00:44.879 And in fact, I'm kind of skeptical that it will 0:00:44.960 --> 0:00:47.839 ever get launched at all because of all of the 0:00:47.880 --> 0:00:51.839 regulatory and political scrutiny that Facebook is under. But this 0:00:51.880 --> 0:00:54.520 is quite a walk back. No, No, I know it 0:00:54.520 --> 0:00:56.720 sounds like a walk back, but I think that, like 0:00:57.520 --> 0:00:59.959 with all existing capsts, it just seems like a really 0:01:00.160 --> 0:01:03.840 big deal to me that one of the biggest companies 0:01:03.880 --> 0:01:07.000 in the world is trying to launch its own global currency. Like, 0:01:07.040 --> 0:01:09.520 I think we kind of have to just step back 0:01:09.560 --> 0:01:11.720 for a second and be like, Wow, this is like 0:01:11.840 --> 0:01:17.360 pretty wild futuristic sci fi stuff here. So I will 0:01:17.400 --> 0:01:21.039 say I am sort of bullish on the idea of 0:01:21.160 --> 0:01:25.839 a global company, uh, sort of nibbling at the edges 0:01:26.000 --> 0:01:29.720 of traditional sovereignty. And I don't know if you ever 0:01:29.760 --> 0:01:32.080 read the Margaret Atwood book, but she talks about how 0:01:32.160 --> 0:01:35.280 in the future companies basically control the world and people 0:01:35.319 --> 0:01:38.880 live in corporate compounds. I can see that aspect of it. 0:01:38.959 --> 0:01:41.520 But I gotta say I'm a little bit more skeptical 0:01:41.600 --> 0:01:45.759 about exactly what Facebook is proposing here. Again, don't get 0:01:45.760 --> 0:01:49.000 me wrong, like I have plenty of skepticism on all 0:01:49.080 --> 0:01:53.160 kinds of front I just think that it's pretty wild 0:01:53.320 --> 0:01:56.640 and has the potential, in at least one version of 0:01:56.680 --> 0:02:00.520 the future, to be pretty enormous. That's what I'm saying. 0:02:00.720 --> 0:02:03.800 Maybe I maybe I oversold it. So one of the 0:02:03.800 --> 0:02:06.800 things that it was really interesting is in their launch 0:02:06.920 --> 0:02:11.000 material where they promoted Libra, their new cryptocurrency, they made 0:02:11.000 --> 0:02:14.760 a really big focus on, you know, serving the the 0:02:14.840 --> 0:02:19.480 underbanked around the world, people largely in emerging markets, who 0:02:19.520 --> 0:02:23.359 don't have access to traditional financial services, whose home currencies 0:02:23.400 --> 0:02:27.040 may be unstable, who don't easily get access to bank accounts, 0:02:27.480 --> 0:02:29.840 And you know, it's one of these things which that 0:02:29.960 --> 0:02:32.959 does seem like a big opportunity. But on the other hand, 0:02:33.639 --> 0:02:36.560 it's a very happy sheen to put on, here's this 0:02:36.919 --> 0:02:39.799 company that's worth like a half a trillion dollars, And 0:02:39.880 --> 0:02:43.480 of course it's very feel goody to say, oh, we're 0:02:43.480 --> 0:02:45.680 gonna serve all these people that the rest of the 0:02:45.880 --> 0:02:50.120 that all these other financial institutions have failed so far. Right, 0:02:50.400 --> 0:02:53.200 So two things there. First of all, I'm very upset 0:02:53.320 --> 0:02:56.080 that they've chosen Libra to be the name of this cryptocurrency, 0:02:56.120 --> 0:02:59.400 because it's my horoscope sign, and now I feel what 0:02:59.560 --> 0:03:03.360 all the people called Alexa felt like when Amazon launched 0:03:03.400 --> 0:03:06.760 that thing. But secondly, I totally agree with you on 0:03:06.800 --> 0:03:09.760 the underbanked point. And I think one interesting point of 0:03:09.800 --> 0:03:14.280 comparison is that cryptocurrencies like bitcoin have been saying similar 0:03:14.400 --> 0:03:17.359 things for a very very long time. So it's worth 0:03:17.400 --> 0:03:20.359 asking what is Facebook going to do in that space 0:03:20.600 --> 0:03:25.680 that bitcoin and other crypto coins don't already do. Right, 0:03:25.760 --> 0:03:28.200 the advocates and a lot of the developers and even 0:03:28.200 --> 0:03:30.600 a lot of the speculators in this space, a lot 0:03:30.600 --> 0:03:32.640 of them have gotten very rich and they try to 0:03:32.720 --> 0:03:34.760 come up with the story about how they're doing something 0:03:34.920 --> 0:03:37.320 very good for the world, and they usually say, oh, 0:03:37.480 --> 0:03:40.440 you in America, you don't understand the importance of all 0:03:40.480 --> 0:03:45.120 this stuff because you have a stable currency and easy 0:03:45.160 --> 0:03:47.800 to access banks. But this is all we're doing something 0:03:47.880 --> 0:03:51.400 very important for the world, and obviously a lot of 0:03:51.400 --> 0:03:54.320 that is just spin. And also it's just a lot 0:03:54.320 --> 0:03:56.600 more complicated than that, because the truth of the matter 0:03:56.720 --> 0:03:59.840 is there really aren't that many people yet and even 0:03:59.840 --> 0:04:03.640 in the near future, in the developing world, actually using 0:04:03.720 --> 0:04:06.560 any of these cryptocurrencies that people are touting as a 0:04:06.600 --> 0:04:09.880 benefit to them, right, And it kind of gets back 0:04:09.880 --> 0:04:14.720 to a really important theme, which is the problem of 0:04:14.760 --> 0:04:18.640 having the under banked out there, or the problem of 0:04:18.720 --> 0:04:22.799 having an unstable sovereign currency or a currency that people 0:04:22.800 --> 0:04:26.600 don't trust. Is that actually a technological problem or is 0:04:26.640 --> 0:04:30.320 that a political problem? Right? And another big problem is 0:04:30.360 --> 0:04:33.159 that at root, a lot of this is just about 0:04:33.160 --> 0:04:37.400 poverty rather than anything having to do with financial institutions. 0:04:37.600 --> 0:04:41.719 That being said, there is perhaps an opportunity for some 0:04:41.839 --> 0:04:45.840 new crypto based currency, whether it's a decentralized one like 0:04:45.920 --> 0:04:50.359 bitcoin or something, or maybe something like Libra, to to 0:04:50.520 --> 0:04:54.040 make a dent. And so today's guest I'm really looking 0:04:54.080 --> 0:04:56.400 forward to it is someone who's actually done the work, 0:04:56.920 --> 0:04:59.080 someone who doesn't just sit on Twitter and say, oh, 0:04:59.120 --> 0:05:00.920 this is going to be really good for the underbank. 0:05:01.240 --> 0:05:05.760 But someone who has actually talked to people in unstable 0:05:05.880 --> 0:05:09.320 markets about how money works and what it would take 0:05:09.520 --> 0:05:14.279 in theory to introduce a new, more stable cryptocurrency that 0:05:14.320 --> 0:05:19.360 actually benefited their lives. Great, I can't wait. Okay, So 0:05:19.440 --> 0:05:22.440 without further ado, I want to bring in Jill Carlson. 0:05:22.560 --> 0:05:25.640 She is a co founder of the Open Money Initiative, 0:05:26.040 --> 0:05:29.400 and unlike everyone else, as I said, she's actually talked 0:05:29.400 --> 0:05:32.160 to people and done the real work to see what 0:05:32.279 --> 0:05:35.480 it would take to introduce crypto into people's lives. So, Jill, 0:05:35.560 --> 0:05:37.600 thank you very much for joining us. Thank you. I'm 0:05:37.600 --> 0:05:40.120 happy to be here starting to do the work, starting 0:05:40.160 --> 0:05:42.280 to do the work. But what I've seen so far 0:05:42.320 --> 0:05:44.479 has been very impressive, and we'll talk about it. But 0:05:44.640 --> 0:05:48.039 before we get into that, I'm just curious. What is 0:05:48.120 --> 0:05:53.200 your background? How did you get interested in cryptocurrency? Yeah, so, 0:05:53.320 --> 0:05:56.640 I actually started my career working in finance. I was 0:05:56.680 --> 0:06:00.760 trading sovereign debt and derivatives at Goldman Um, and in 0:06:00.800 --> 0:06:04.200 particular I was on the Latin America desk, and that 0:06:04.240 --> 0:06:07.160 was actually the lens through which I first got introduced 0:06:07.200 --> 0:06:12.000 to cryptocurrency. Um, it was through trading Argentine debt through 0:06:12.120 --> 0:06:18.160 the default in and early in I had a broker 0:06:18.400 --> 0:06:20.760 come to me and you know, he would have some 0:06:20.880 --> 0:06:23.640 market color for me. Every morning. There was always something 0:06:23.640 --> 0:06:26.520 that he was excited to share, and one morning that 0:06:26.680 --> 0:06:28.560 thing that he was excited to share with me was 0:06:28.600 --> 0:06:32.960 all about bitcoin. Now this was early. The only context 0:06:33.040 --> 0:06:35.839 I had heard of bitcoin at this point was people 0:06:35.880 --> 0:06:38.320 trying to buy drugs with it on the internet. So 0:06:38.360 --> 0:06:41.120 I was very skeptical and I was like, man, I 0:06:41.120 --> 0:06:44.040 don't know, this sounds even sketchy earthan the pace, so 0:06:44.760 --> 0:06:46.320 I don't know if this is a good idea. But 0:06:46.480 --> 0:06:49.120 he kind of dragged me, kicking and screaming down the 0:06:49.600 --> 0:06:53.120 down the bitcoin rabbit hole, if you will. So what 0:06:53.160 --> 0:06:56.080 did you discover as you went down the bitcoin rabbit hole? 0:06:56.120 --> 0:06:58.480 What brought you to being co founder of the Open 0:06:58.520 --> 0:07:02.440 Money Initiative? You must have seen something in it? Yeah, Well, 0:07:02.480 --> 0:07:05.840 the thing that this broker actually, in particular, that he 0:07:05.880 --> 0:07:08.880 convinced me of was that there was something really compelling 0:07:08.920 --> 0:07:12.400 there that he was unable to do previously right, And 0:07:12.440 --> 0:07:15.880 that thing for him was to get his money offshore, 0:07:15.960 --> 0:07:19.240 to get his money out of the Argentine Paso and 0:07:19.680 --> 0:07:25.000 that ability to use this to basically evade capital controls, 0:07:25.120 --> 0:07:28.040 right is what he was doing that really piqued my 0:07:28.120 --> 0:07:31.920 interest because again that was something that you couldn't do before. 0:07:32.160 --> 0:07:34.920 You know, previously people were trying to smuggle money out 0:07:34.960 --> 0:07:38.600 of the country in suitcases. I remember talking to people 0:07:38.640 --> 0:07:41.880 I ended up doing research on the subject on Argentina 0:07:41.920 --> 0:07:45.600 and cryptocurrency in capital controls, and I remember speaking to 0:07:45.640 --> 0:07:48.480 people who had literally tried to smuggle money out of 0:07:48.520 --> 0:07:51.920 the country again in suitcases and been caught by sniffer 0:07:51.960 --> 0:07:55.560 dogs on the boat to Uruguay, all kinds of crazy stuff. 0:07:55.960 --> 0:07:57.840 And so then here, all of a sudden, you have 0:07:58.000 --> 0:08:02.960 this digital alternative that in many ways promises to to 0:08:03.080 --> 0:08:05.520 take out a lot of that trouble that people were 0:08:05.560 --> 0:08:10.200 having in in again evading capital controls. Now, whether or 0:08:10.240 --> 0:08:12.560 not that's a good thing for the world, whether or 0:08:12.600 --> 0:08:14.960 not this is something we want to enable or not, 0:08:15.520 --> 0:08:19.760 it's a phenomenon that cryptocurrency has enabled. And so that 0:08:19.760 --> 0:08:22.840 that was what really piqued my interest, and that's the 0:08:22.880 --> 0:08:26.160 thing that actually is stuck with me throughout the last 0:08:26.200 --> 0:08:28.720 five years that I've been working in this space of 0:08:28.800 --> 0:08:31.560 here's this thing that this enables that no one has 0:08:31.680 --> 0:08:34.439 been able to do before. It's interesting that you said 0:08:34.600 --> 0:08:37.840 your first introduction to knowing anything about bitcoin was that 0:08:37.920 --> 0:08:42.640 people bought drugs with it online, and then the next 0:08:42.640 --> 0:08:48.840 not me, this is this is this is all anyone 0:08:48.960 --> 0:08:53.720 was talking about. Please, I worked at Goldman their drug tests. Sure, um, 0:08:54.280 --> 0:08:57.520 we could have been dealing um. But the but then 0:08:57.559 --> 0:09:00.280 the next thing was capital controls. And although those seemed 0:09:00.320 --> 0:09:04.319 very different, I mean, in the end, the consistent category 0:09:04.440 --> 0:09:06.960 is these are the things the governments don't want you 0:09:07.000 --> 0:09:10.080 to do. Yeah, exactly, and I mean I I actually 0:09:10.120 --> 0:09:13.480 stand by this as one of the sort of primary 0:09:13.559 --> 0:09:17.679 underpinnings of that question. What is cryptocurrency good for at 0:09:17.679 --> 0:09:19.320 the end of the day, A lot of it is 0:09:19.480 --> 0:09:23.000 regulatory arbitrage. Now you can have all kinds of opinions 0:09:23.000 --> 0:09:25.480 about is that good, bad, ugly? A lot of it 0:09:25.559 --> 0:09:29.520 is very ugly, but you know it can be interesting nonetheless, 0:09:30.880 --> 0:09:33.560 So sorry to press on this point, but is there 0:09:33.559 --> 0:09:37.440 not like a sort of judgment call going on here, 0:09:37.520 --> 0:09:39.679 like you said earlier, whether or not this is a 0:09:39.679 --> 0:09:42.760 good thing that people are able to evade capital controls. 0:09:42.840 --> 0:09:46.800 But the fact that you know, you're sort of talking 0:09:46.800 --> 0:09:51.440 about and promoting the use case of doing that um 0:09:51.480 --> 0:09:55.440 in certain countries, it seems like almost a judgment call 0:09:55.559 --> 0:09:58.880 on the legitimacy of those countries or the legitimacy of 0:09:58.880 --> 0:10:02.480 the regimes or legal system. They're like, how do you 0:10:02.480 --> 0:10:06.280 think about the I'm struggling to find the word, but 0:10:06.320 --> 0:10:09.400 I guess like the moral aspect of this or how 0:10:09.440 --> 0:10:13.840 this fits in with existing government structures, it's really hairy. 0:10:14.040 --> 0:10:17.760 And and I'll clarify my organization, the Open Money Initiative, 0:10:17.760 --> 0:10:19.840 and the work that I've done, it's all just been 0:10:19.880 --> 0:10:23.160 research oriented, and so it's less about trying to push 0:10:23.160 --> 0:10:26.200 an agenda of this is right, this is wrong, and 0:10:26.240 --> 0:10:29.760 it's more about trying to look at what's going on today, 0:10:30.080 --> 0:10:32.720 what the world looks like, and then present that to 0:10:32.880 --> 0:10:36.240 the world so that people can make their own judgment calls. 0:10:36.280 --> 0:10:39.280 But I mean, I'll be very up front. We'll probably 0:10:39.320 --> 0:10:42.160 spend a lot of time this morning talking about how, 0:10:42.520 --> 0:10:46.080 you know, people who are being impoverished in Venezuela may 0:10:46.160 --> 0:10:49.480 or may not be using bitcoin in order to escape 0:10:49.520 --> 0:10:52.480 some of that poverty that, from what I've seen, has 0:10:52.520 --> 0:10:55.880 been really inflicted on them. By the government. But at 0:10:55.880 --> 0:10:58.760 the same time, it's important to also acknowledge that, you know, 0:10:58.800 --> 0:11:02.200 who's probably using bitcoin just as much, if not more 0:11:02.320 --> 0:11:05.480 than anyone sort of within the country of Venezuela who's 0:11:05.520 --> 0:11:11.120 being impoverished by these government policies is the government officials themselves, right, 0:11:11.240 --> 0:11:14.559 are also using these tools, and so it is very 0:11:14.600 --> 0:11:18.000 important to remember that any time we're talking about whether 0:11:18.040 --> 0:11:22.199 it's Bitcoin, whether it's other technology, whether it's other areas 0:11:22.320 --> 0:11:26.360 of sort of regulatory disruption. Anytime you introduce a new 0:11:26.400 --> 0:11:28.920 tool to the market, you don't get to choose who's 0:11:29.000 --> 0:11:31.360 using it, and it's going to be used by sort 0:11:31.360 --> 0:11:33.400 of the good guys and the bad guys alike. All right, 0:11:33.480 --> 0:11:38.040 So let's talk about the Open Money Initiative. And like 0:11:38.080 --> 0:11:40.319 I said in the beginning, you know, there's a lot 0:11:40.320 --> 0:11:44.560 of people that from their fancy start up offices in 0:11:44.600 --> 0:11:47.520 San Francisco tweet about how they're doing great stuff for 0:11:47.559 --> 0:11:51.320 the world and bringing financial inclusion and financial services to 0:11:51.559 --> 0:11:55.560 the under bank. But you've actually gone and talk to 0:11:55.640 --> 0:11:59.200 people and gotten behind the computer screen to learn about 0:11:59.240 --> 0:12:02.520 the potential or what's not working. So what is the 0:12:02.880 --> 0:12:05.600 open Money Initiative and sort of describe the work that 0:12:05.640 --> 0:12:09.160 you've done. Yeah, so we are a research organization. We're 0:12:09.240 --> 0:12:12.840 not for profit. That was a very important, uh, sort 0:12:12.840 --> 0:12:16.480 of foundation for us because we can't be going in 0:12:16.640 --> 0:12:20.040 trying to do kind of objective research if we're pushing 0:12:20.040 --> 0:12:24.360 a product, and so that again very objective neutral. We 0:12:24.480 --> 0:12:29.520 have partnered with and received funding from many organizations within 0:12:29.600 --> 0:12:34.079 the technology community, within the cryptocurrency world, and then also 0:12:34.200 --> 0:12:37.400 from outside from the activism community. For example, the Human 0:12:37.480 --> 0:12:41.640 Rights Foundation is a huge supporter of us. But again, 0:12:41.920 --> 0:12:45.920 all of those organizations have given us this funding because 0:12:45.960 --> 0:12:48.720 they have an interest in learning sort of the objective 0:12:49.120 --> 0:12:52.840 truths or facts of what's going on on the ground. Now. 0:12:53.120 --> 0:12:56.640 Our mission is to get a better understanding of what 0:12:57.160 --> 0:13:00.720 money systems look like in closed economy, is or failing 0:13:00.720 --> 0:13:04.840 financial systems. We went to what we believe is sort 0:13:04.840 --> 0:13:07.520 of the most extreme case of this that exists today, 0:13:07.559 --> 0:13:11.439 which is Venezuela, as our first case study to get 0:13:11.480 --> 0:13:14.200 a better understanding of what the world looks like. They're 0:13:14.840 --> 0:13:18.120 now I have sort of this background in cryptocurrency, my 0:13:18.200 --> 0:13:21.280 other two co founders due to an extent as well. 0:13:21.520 --> 0:13:24.360 But the questions that we went in asking, we're not 0:13:24.480 --> 0:13:28.880 just about bitcoin and cryptocurrency, but rather we're asking the 0:13:28.960 --> 0:13:32.000 question of what are people doing today in Venezuela, What 0:13:32.040 --> 0:13:34.840 are the sort of hacks that they're using in order 0:13:34.880 --> 0:13:38.240 to survive and in some cases even thrive, And then 0:13:38.280 --> 0:13:41.840 how can we take those and present those again back 0:13:41.840 --> 0:13:44.120 to the world so that people can, you know, whether 0:13:44.160 --> 0:13:46.680 it's these builders at these tech companies or again people 0:13:46.679 --> 0:13:49.680 in the activism community, whoever it is, take it, learn 0:13:49.760 --> 0:13:53.600 from it, and build with it. So Joe knows that 0:13:53.720 --> 0:13:57.720 I have a secret obsession with anthropology and ethnography, So 0:13:57.760 --> 0:14:01.199 I'm really curious. You know, you decide on Venezuela as 0:14:01.200 --> 0:14:04.839 your test case. You have the crypto background, but you're 0:14:04.880 --> 0:14:07.360 setting your sights on something much more broader, which is 0:14:07.360 --> 0:14:11.120 how people are using money in general. All right, so 0:14:11.240 --> 0:14:14.760 you're setting out to learn more about this subject. How 0:14:14.800 --> 0:14:18.439 exactly did you go about doing it? Yeah, So one 0:14:18.480 --> 0:14:20.720 of the first decisions we had to make was whether 0:14:20.800 --> 0:14:24.640 or not to go to Venezuela itself, and we determined 0:14:24.720 --> 0:14:27.920 that at the time, this was back in February of 0:14:27.960 --> 0:14:30.400 this year, there was a lot of upheaval going on, 0:14:30.480 --> 0:14:34.520 a lot of political uncertainty, and we determined that as 0:14:35.040 --> 0:14:38.680 an American, a Canadian who's basically American, and then also 0:14:38.720 --> 0:14:42.280 of Venezuelan himself. So my other two co founders and 0:14:42.320 --> 0:14:45.440 I we decided that it was not wise for us 0:14:45.480 --> 0:14:48.240 to try to go to Venezuela itself, so we did 0:14:48.280 --> 0:14:50.360 the next best thing, which was to go to the border. 0:14:51.160 --> 0:14:54.200 So we went to a city called Cucuta, which is 0:14:54.240 --> 0:14:57.160 in Colombia but it kind of might as well be 0:14:57.200 --> 0:15:00.520 in Venezuela, and spent a lot of time there talking 0:15:00.560 --> 0:15:02.840 to people who had just crossed the border, people who 0:15:02.840 --> 0:15:06.320 were crossing borders sort of intra day. One important thing 0:15:06.360 --> 0:15:09.120 to note about this research. The first thing people always 0:15:09.160 --> 0:15:11.400 ask me when I start talking about this work I've 0:15:11.440 --> 0:15:14.400 been doing. They say, oh, cool, So like how many 0:15:14.440 --> 0:15:18.040 people in Venezuela are using bitcoin? And the answer is, 0:15:18.200 --> 0:15:21.160 I have not the slightest idea because the type of 0:15:21.160 --> 0:15:23.560 work that we were doing, the type of research that 0:15:23.640 --> 0:15:26.800 we were interested in, was much less about sort of 0:15:26.840 --> 0:15:31.000 the quantitative or the macro here, but much more about 0:15:31.040 --> 0:15:33.480 what does this actually look like on a day to 0:15:33.560 --> 0:15:36.560 day basis. So, you know, Tracy, you mentioned sort of 0:15:36.640 --> 0:15:41.560 ethnographic or anthropological lenses. That's exactly right. So we would 0:15:41.600 --> 0:15:46.000 sit down with people for two plus hours, and often 0:15:46.040 --> 0:15:48.360 this was in context, you know, in their homes and 0:15:48.360 --> 0:15:51.480 their places of work, even sort of intercepting them on 0:15:51.520 --> 0:15:54.120 the street in the middle of of whatever they were doing, 0:15:54.400 --> 0:15:57.080 and get a really good sense of what their day 0:15:57.080 --> 0:16:00.280 to day lives look like. And often what would come 0:16:00.280 --> 0:16:03.800 out here was we would find these sort of extreme 0:16:03.960 --> 0:16:07.600 edge cases as well. Right, So, rather than looking for 0:16:08.200 --> 0:16:11.040 the men or the average, which is often what you're 0:16:11.080 --> 0:16:14.080 looking for and more kind of quantitative studies, we would 0:16:14.120 --> 0:16:17.560 be looking for outliers and finding out, Okay, what what 0:16:17.680 --> 0:16:20.600 does this guy who is really thriving and has actually 0:16:20.640 --> 0:16:23.520 managed to make a ton of money throughout this crisis, 0:16:23.560 --> 0:16:26.120 what is he doing? Or you know what is what 0:16:26.280 --> 0:16:29.000 is the woman who's managed to make it across the 0:16:29.040 --> 0:16:31.560 border with her family and with her finances intact? What 0:16:31.560 --> 0:16:33.840 did she do right? And then how can we learn 0:16:33.880 --> 0:16:55.480 from that and draw inspiration from it? So whenever I 0:16:55.560 --> 0:16:59.640 read about Venezuela, I just, yeah, obviously just boggles the 0:16:59.680 --> 0:17:03.600 mind that people can survive in such a chaotic system 0:17:03.640 --> 0:17:07.560 in which all money has been essentially rendered worthless. What 0:17:07.640 --> 0:17:10.960 were some of the most striking findings that you came 0:17:11.000 --> 0:17:14.480 across in terms of essentially how people hack the economy 0:17:14.600 --> 0:17:17.680 for their own purposes to survive or thrive. What were 0:17:17.720 --> 0:17:21.040 the things that surprised you. Yeah, so there are a 0:17:21.040 --> 0:17:24.240 lot of things that surprised me. So I'll start with one, 0:17:24.359 --> 0:17:26.800 which is that you know, as I'm sure many of 0:17:26.800 --> 0:17:30.679 your listeners know, the Venezuelan Bolivar has been in a 0:17:30.720 --> 0:17:33.560 state of hyper inflation for the last several years, and 0:17:33.600 --> 0:17:36.520 in the state of extremely high inflation for many years 0:17:36.560 --> 0:17:39.920 before that, to the point where every few years now, 0:17:39.960 --> 0:17:41.879 if not every year, they have to come out with 0:17:42.000 --> 0:17:45.760 a new denomination of boulevard that basically lops off the 0:17:45.840 --> 0:17:48.280 last three zero is because they just can't keep up, 0:17:48.680 --> 0:17:53.600 so a million note would become a hundred thousand right now. 0:17:54.080 --> 0:17:57.240 You would think in this context people would just say, 0:17:57.359 --> 0:17:58.720 the hell with it, We're not going to use the 0:17:58.760 --> 0:18:02.440 boulevard anymore, We're going to move on to some other alternative. 0:18:03.200 --> 0:18:05.760 But in fact that's not the case. There you still 0:18:05.880 --> 0:18:09.439 really need the bolivar to survive, and there are a 0:18:09.480 --> 0:18:11.919 few different reasons for that. One is because it's just 0:18:12.000 --> 0:18:14.960 kind of this this shelling points the natural standard that 0:18:15.040 --> 0:18:18.959 people still resort to and use when when you know, 0:18:19.119 --> 0:18:22.960 making transactions in the economy. Another reason for that is 0:18:23.040 --> 0:18:27.080 that the Venezuelan government mandates that the bolivard is the 0:18:27.119 --> 0:18:30.240 only currency that can be accepted, and so often what 0:18:30.320 --> 0:18:32.560 you would find is we would talk to shopkeepers who 0:18:32.640 --> 0:18:35.199 still ran shops in Venezuela or who were sort of 0:18:35.240 --> 0:18:37.919 crossing the border and leaving pine their shops, but what 0:18:37.960 --> 0:18:40.879 they would say is that they would still have to 0:18:40.960 --> 0:18:44.800 denominate everything in bolivar's. They would still have to accept 0:18:44.880 --> 0:18:48.639 bolivars for most of their transactions. But then if you 0:18:48.720 --> 0:18:51.160 went back to their books, and sometimes they would even 0:18:51.200 --> 0:18:54.919 show us their bookkeeping ledgers, they would all be denominated 0:18:54.920 --> 0:18:57.960 in US dollars. And so you have this dynamic where 0:18:57.960 --> 0:19:01.080 people have started to think in alternative of currencies, whether 0:19:01.160 --> 0:19:04.280 that's often you know, in cases like in Caracas, it 0:19:04.320 --> 0:19:07.520 would often be the US dollar. Close to the Colombian 0:19:07.560 --> 0:19:10.240 border or to often be the Colombian pass so close 0:19:10.280 --> 0:19:13.359 to the Brazilian border would often be the Brazilian rail. 0:19:13.920 --> 0:19:16.280 So you'd have these cases where people would be thinking 0:19:16.320 --> 0:19:19.479 in one currency and yet still having to deal and 0:19:19.560 --> 0:19:23.920 transact and list prices in another currency. So you have 0:19:24.280 --> 0:19:29.560 basically a duel or even triple sort of currency system 0:19:29.800 --> 0:19:33.600 that has taken hold, but it's just that no one 0:19:33.680 --> 0:19:37.040 is actually using or a few people are actually yet 0:19:37.240 --> 0:19:41.400 using dollars or pasos, etcetera. And so that's that's one 0:19:41.400 --> 0:19:44.399 example of kind of a quirk that that we've found 0:19:44.520 --> 0:19:47.760 that you know, it's kind of unexpected here. So what 0:19:47.840 --> 0:19:52.240 does that imply about the usage potential of crypto Because 0:19:52.320 --> 0:19:55.399 on the one hand, you do have people basically running 0:19:55.400 --> 0:20:00.040 parallel currency systems against one one another. But on the 0:20:00.040 --> 0:20:04.160 their hand, you have a lingering problem of adoption, right 0:20:04.200 --> 0:20:07.280 like people are just used to the boulevard, as you mentioned, 0:20:07.680 --> 0:20:11.119 and you also have the problem of the government exerting 0:20:11.200 --> 0:20:15.200 pressure on people to use the boulevard and to not 0:20:15.880 --> 0:20:20.359 basically evade regulations by using something like dollars or cryptocurrency. 0:20:20.480 --> 0:20:25.040 So putting it all together, what does that tell us? So, Yeah, 0:20:25.119 --> 0:20:30.040 one interesting thing here about cryptocurrency specifically in Venezuela is 0:20:30.119 --> 0:20:33.560 I mentioned that the boulevard it's mandated to be effectively 0:20:33.600 --> 0:20:37.439 the only currency that gets used by the government. Right now, 0:20:37.760 --> 0:20:40.439 there's kind of shades of gray here in terms of 0:20:40.440 --> 0:20:43.520 what gets enforced and where it gets enforced and how 0:20:44.240 --> 0:20:47.800 it's it's very patchy, right, there is very little rule 0:20:47.800 --> 0:20:50.280 of law left in many ways in Venezuela because you 0:20:50.280 --> 0:20:54.240 have to remember, often it's the police or the border guards, etcetera, 0:20:54.320 --> 0:20:56.919 are just as desperate as anybody else to survive, and 0:20:56.960 --> 0:21:00.560 so they kind of decide when and how they'll enforce rules, 0:21:00.600 --> 0:21:04.679 when and how often that enforcement it just takes the 0:21:04.800 --> 0:21:08.440 form of confiscation, right, and it ends up just being 0:21:08.640 --> 0:21:11.040 you know, the police seizing your assets or your cell 0:21:11.040 --> 0:21:13.639 phone or whatever it is to just hold onto for 0:21:13.720 --> 0:21:18.840 themselves for their own enrichment. Now, dollars are way on 0:21:18.880 --> 0:21:21.840 the end of the spectrum of not okay. If you 0:21:21.920 --> 0:21:25.080 are dealing in dollars and you get caught doing so, 0:21:25.720 --> 0:21:29.200 you are going to face some probably pretty serious consequences 0:21:29.400 --> 0:21:34.680 for all kinds of political reasons. Cryptocurrency is interesting because 0:21:35.520 --> 0:21:38.800 it's it's more of a gray area. It's kind of 0:21:38.880 --> 0:21:42.479 pactually enforced um to the point where when we were 0:21:42.520 --> 0:21:44.600 first speaking with people, I was sort of wondering, like, 0:21:44.680 --> 0:21:46.840 what is going on here? Half of these people lying 0:21:46.920 --> 0:21:49.360 to us, because you know what people are telling us here, 0:21:49.400 --> 0:21:53.000 it's it's completely incongruous. It doesn't make sense with each other. 0:21:53.600 --> 0:21:58.439 But in fact, the Venezuelan government has backed itself into 0:21:58.640 --> 0:22:01.960 an odd kind of corner when it comes to cryptocurrency, 0:22:02.000 --> 0:22:07.040 because the Venezuelan government issued its own cryptocurrency a couple 0:22:07.040 --> 0:22:10.679 of years ago back inen called the Petro. Now, we 0:22:10.720 --> 0:22:13.400 can do a deep dive on the Petro if you're interested. 0:22:13.440 --> 0:22:16.080 I have lots of thoughts on that as well. But 0:22:16.480 --> 0:22:20.320 the reality is is that because the Venezuelan government did that, 0:22:20.760 --> 0:22:25.600 the Venezuelan government now faces this sort of weird conundrum 0:22:25.760 --> 0:22:28.040 in which they can't just make a blanket statement of 0:22:28.240 --> 0:22:31.120 cryptocurrency is bad, you're not allowed to use any of it, 0:22:31.160 --> 0:22:35.000 because here they're almost mandating in some cases that their 0:22:35.080 --> 0:22:39.199 citizens do use their own cryptocurrency. And so there is 0:22:39.240 --> 0:22:41.640 this sort of gray area where it comes to cryptocurrency 0:22:41.640 --> 0:22:45.680 where people aren't so sure whether it's good bad, whether 0:22:45.720 --> 0:22:48.159 it's going to be enforced or not if they're using it. 0:22:48.200 --> 0:22:51.040 And so we saw some cases where actually people were 0:22:51.080 --> 0:22:55.400 more comfortable using something like bitcoin as opposed to the U. S. Dollars, 0:22:55.440 --> 0:22:59.840 which felt shocking to me. The people that do you 0:23:00.000 --> 0:23:04.760 who's bitcoin in Venezuela talk to me about the sort 0:23:04.800 --> 0:23:08.160 of usability issues because it has to be even okay, 0:23:08.240 --> 0:23:10.720 bitcoins more stable. Let's say you can find a retailer 0:23:10.800 --> 0:23:12.960 that will accept it, there have to be all kinds 0:23:12.960 --> 0:23:15.840 of difficulties of getting it, because I can't imagine there 0:23:15.840 --> 0:23:18.120 are people too many people that want to sell bitcoin 0:23:18.600 --> 0:23:21.600 for bolivars, which is the one that most people have. 0:23:22.200 --> 0:23:25.080 Even in the you know, the most developed market of 0:23:25.080 --> 0:23:29.639 the US. Cryptocurreties are sort of famously the U the 0:23:29.720 --> 0:23:32.600