RESEARCH & IDEAS
UNDERSTANDING THE PROBLEM STATEMENT
There are three possible contexts in which we can put this problem statement:
Context 1: There are no banks in the world. We can imagine a world without banks, how would money work then? How can digital currency exists without banks?
Context 2: Design for the unbanked population. What would digital currency look like for someone without access to formal banking services? Can they be brought into a digitized economy without making them open bank accounts?
Context 3: Only we don’t have access to banking. In this you basically want to artificially create the problems of the unbanked population, for yourself, in New York. For example if you decide to go bankless for a month. How can you still digitally pay for day to day stuff.
Out of the three, I feel that we would be able to do most justice to the third context. That is because the scope of context 1 is too big and for the second, we won’t have an easy access to unbanked population in or near NY. This would mean designing in isolation, away from the users.
Links research ongoing:
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
A distributed database
Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.
Information held on a blockchain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
“The underlying tech behind much of this is simply peer-to-peer transfer technology based off of mobile phones,” explained Dan Kleinbaum, co-founder and chief operating officer of Beyonic, a tech firm facilitating mobile money payments in Kenya and Uganda; rapid demand is driving expansion to 25 more countries. “Pretty much anywhere you don’t have widespread access to bank accounts but [do have] very high penetration of mobile phones – I’m talking 50 percent to 90 percent – is a good recipe for mobile money and P2P transfers.”
A total of 75 percent of the world’s 7 billion mobile phone subscriptions are in developing countries and similarly high levels of usage are found among refugees. A research study in Uganda found that 89 percent of refugees in urban settings and 46 percent of refugees in rural settlements use mobile phones in their main income-generating activity.
There are 255 mobile money services in 89 countries, according to the GSMA, a mobile money industry group. Besides Kenya’s M-Pesa, top providers are Rwanda’s mVisa; Tanzania’s Tigo Pesa; bKash in Bangladesh, created by the development organization BRAC; and Globe GCash in the Philippines.
The essential ingredient, besides a telecom with a P2P cash transfer mechanism, is a large enough network of agents throughout a country so that no matter where a cash recipient is located, she can find a place to cash out when needed.
Like every Uber country office, Uber Nigeria is a locally incorporated company that hires employees, runs support services, and adapts the platform to meet the demands of local consumers. For example, while Uber riders in most markets pay via credit card through the app, riders in Nigeria and across sub-Saharan Africa have the option to pay in cash. Many of these riders and drivers handle these transactions via mobile money transfers such as M-Pesa.