How Cryptocurrency Can Bank Everyone | Anton Mozgovoy | TEDxBanbury
Cryptocurrencies offer a potential solution to global financial exclusion by leveraging decentralized technology to enable seamless money transfer and value exchange. The speaker uses historical sketches and current global statistics—such as 1.7 billion unbanked people—to establish the scale of the problem, before detailing how blockchain and decentralized identities can provide a resilient financial alternative to failing fiat currencies. The ultimate vision is a world where financial participation is a basic human right, enabled by technology accessible to everyone. ## Speakers & Context - Speaker presents a concept arguing for decentralized finance as a means to bank the world. - Speaker frames the discussion by examining Arthur Radvanced's late 1950s futuristic sketches, comparing them to modern technological realities. - Speaker establishes the current state of global finance by highlighting massive populations excluded from basic banking services. ## Theses & Positions - Cryptocurrencies and decentralized finance offer a potential solution to global financial exclusion, though its large-scale success remains unproven. - Global financial inclusion is a critical issue affecting more people than assumed, impacting 1.7 billion people worldwide lacking basic access. - Blockchain technology and decentralized identities can bypass traditional banking failures (like those caused by international sanctions or hyperinflation) by creating transparent, verifiable, and decentralized systems. - The value of the global GDP is quadratically correlated to the number of economically involved people. ## Concepts & Definitions - **Decentralized Finance (DeFi)** — The concept being discussed: how cryptocurrencies can bank the world. - **Blockchain** — A decentralized technology used to record cryptocurrency transactions. - **Cryptocurrency** — A virtual tool used to store information in blocks; it is a "simply mathematical representation of the value you encode into it." - **Digital Identity** — Proof of existence and identity not reliant on traditional government-issued documents like passports or birth certificates. - **Smart Contracts** — Logic initiated on a blockchain that can solve disputes, removing the need to trust a third party. ## Mechanisms & Processes - **Financial Exclusion Documentation:** Struggles faced include lacking a birth certificate for opening a bank account or having to travel ten miles or more to reach a bank branch. - **Blockchain Voting:** Requires initial user authentication to validate uniqueness; upon casting a vote, the user receives a unique code proving the vote was cast, while the vote itself remains anonymous. - **Sanction Impact:** When a territory is cut off from international money institutions (due to sanctions), citizens become completely excluded, unable to transact online or use ATMs, as seen in the case of Donetsk. - **Solving Dispute:** Using smart contracts on a blockchain allows two parties to safely execute work and provide value without relying on a third party or government. - **Accessing Crypto Value:** Value can be created by learning how to buy, sell, or operate with cryptocurrencies through methods like third-party exchanges or peer-to-peer exchanges. ## Timeline & Sequence - **Late 1950s:** Time period of Arthur Radvanced's futuristic sketches. - **1950s:** Time when jetpacks were envisioned. - **2014:** Year the first ATM in Mogadishu, capital of Somalia, was opened. - **2014:** Period when two cities separated by 160 miles (Mennengi and Donetsk) existed in different economic realities due to conflict/sanctions. - **2018:** Year the World Bank calculated the 1.7 billion unbanked population; also the year the city of Zhuge in Switzerland performed a community-based blockchain vote. - **End of 2019:** Year Venezuela's local fiat currency, the Bolívar, lost 99% of its value. ## Named Entities - **Arthur Radvanced** — Artist credited with the futuristic sketches. - **Amazon** — Company noted for automated warehouse robots and logistics systems. - **World Bank** — Institution providing statistics on unbanked populations and issuing data about financial exclusion. - **Ripple** — Company associated with the XRP cryptocurrency. - **Aetherium** — Cryptocurrency that fuels global computing power. - **Climate Token** — Cryptocurrency used for exchanging CO2 emissions quotas by governments and organizations. - **Tether** — Cryptocurrency designed to represent the value of the US dollar. - **Tesco** — Retailer whose blue chip tokens are used for charitable voting. - **Venezuela** — Country experiencing hyperinflation, with its local fiat currency losing significant value. - **Mogadishu** — Capital of Somalia, noted for the opening of its first ATM in 2014. - **Mennengi and Donetsk** — Two cities separated by 160 miles that became economically distinct due to sanctions. - **Chuge, Switzerland** — Location where a community-based blockchain voting system was performed in 2018. ## Numbers & Data - **1.7 billion people:** Number of people globally struggling with financial exclusion (as of November 2018 World Bank data). - **22 percent:** Percentage of the entire global population represented by the financially excluded. - **10 miles:** Distance mentioned when describing the effort required to reach the nearest bank branch. - **300:** Number of crypto ATMs operational around the UK. - **10,000 atm:** Mentioned in the context of transaction volumes/potential. - **10 million percent:** The staggering inflation rate reached by the Venezuelan Bolívar by the end of 2019. - **99 percent:** Percentage of its value lost by the local fiat currency Bolívar throughout the year ending 2019. - **160 miles:** Distance separating the two cities (Mennengi and Donetsk). ## Examples & Cases - **Financial Inclusion Struggle:** Individuals struggling because they lack a birth certificate to prove legal existence for opening bank accounts. - **Geographical Access:** Needing to walk ten miles or more to reach a bank branch. - **Conflict Exclusion:** People in Donetsk becoming completely cut off from the global economy when international money institutions ceased operating in the region. - **Blockchain Voting:** Used in Zhuge, Switzerland (2018), where a community-based system was implemented. - **Hyperinflation Evidence:** The activity spike in one local popular decentralized crypto exchange in Venezuela, correlating with the drop in the local fiat currency. - **Lack of Infrastructure:** The first ATM in Mogadishu only opening in 2014 illustrates infrastructural delay. - **Digital Transactions:** The case of using blockchain to allow secure work execution between two parties without a mediating third party. ## Tools, Tech & Products - **Jetpack:** Mentioned in Arthur Radvanced's sketches, noted as existing, but not at a commercial level. - **Automated warehouse robots:** Mentioned as real technology (e.g., Amazon warehouses). - **Blockchain:** The foundational decentralized technology for recording transactions. - **Cryptocurrency:** The virtual tool for encoding and transferring value. - **XRP:** Cryptocurrency allowing for cheaper banking transactions via Ripple. - **Aetherium:** Cryptocurrency powering global computing. - **Climate Token:** Cryptocurrency for trading CO2 emissions quotas. - **Tether:** Cryptocurrency representing the US dollar value. - **Blockchain-based voting solutions:** Digital systems designed to make offline processes transparent. - **Decentralized Identities:** A conceptual replacement for government-issued documents for verification. - **Smart Contracts:** Digital logic on a blockchain that automates agreements and solves disputes. - **Crypto ATMs:** Physical machines enabling access to cryptocurrencies (over 300 in the UK). - **Peer-to-peer exchanges:** Direct person-to-person exchange of cryptocurrencies, governed by the two parties. - **Centralized/Decentralized Exchanges:** Types of platforms for trading (controlled by one party vs. controlled by code/group). - **Over the Counter (OTC) trading:** Mechanism for trading large volumes of assets, derived from stock market practices. - **Wallets:** Storage mechanisms for cryptocurrencies, categorized as paperless, paper-based, or for buying/creating. ## References Cited - **World Bank:** Source for the 1.7 billion unbanked people figure (calculated in November 2018). - **Backhaus Law:** Principle stating that the value of global GDP is quadratically correlated to the number of economically involved people. ## Trade-offs & Alternatives - **Traditional Banking vs. DeFi:** Traditional banking requires physical infrastructure (ATMs, branches) and government validation; DeFi offers remote, permissionless access. - **Fiat Currency vs. Cryptocurrency:** Fiat currencies are susceptible to hyperinflation and political sanctions; crypto offers a potentially more stable measure of wealth and value storage. - **Trusted Intermediary vs. Smart Contracts:** The trade-off between relying on a third party (bank/government) for dispute resolution versus using transparent, verifiable code logic. ## Counterarguments & Caveats - The answer to whether crypto can "bank the world" is not straightforward; whether it will scale to billions is "yet to be seen." - The speaker notes that current examples are not the universal reality, referencing the fact that the *need* for DeFi is immense, but the *scale* of adoption is uncertain. ## Implications & Consequences - If financial inclusion is achieved globally, the economic activity (GDP) will see massive growth due to increased participation. - In stable economies, inflation problems are manageable, but in extreme cases (like Venezuela), fiat currency collapses quickly, making crypto an appealing store of value. ## Verbatim Moments - *"I wanted to talk about decentralized finance to be more specific how cryptocurrencies can Bank the world."* - *"If that is something to happen in the future let's start by understanding how we imagine the future"* - *"the value of global GDP are is quadratically correlated to the number of economically involved people"* - *"we would all live in the era for a better finance or we're not there yet"* - *"1.7 billion people around the world that struggle with that every single day"* - *"access to finance just like access to Internet nowadays is just one of the basic human needs"* - *"a blockchain is a decentralized technology that allows you to record cryptocurrency transactions"* - *"there's cryptocurrency pretty much for anything"* - *"the votes remain anonymous and then as soon as the person does cast a vote"* - *"Nobody who has a council tax bill from Banbury could automatically prove that or Banbury resident"* - *"The people in MePro they kept using their banking cards... whereas people in Donas became completely excluded"* - *"The logic is transparent and it's verifiable by everyone"* - *"hyperinflation in that country has reached a staggering 10 million percent only by the end of 2019"* - *"what would the world look like if every person on the planet was financially included"*