Money is important — that’s one of the few things we can all agree on. We’ve spent decades building out our modern financial infrastructure so that most of us can easily exchange money and use it. But despite how robust payment systems may seem today — with credit and debit cards on our smartphones, and national real-time payments on the horizon — we’ve done a remarkably poor job of making sure that access to them is well distributed.
If you’ve spent any time learning about cryptocurrencies like Zcash, you’ve probably heard about censorship resistance, fault tolerance and decentralization — features that give cryptocurrencies a leg up on any other payment method we have available today. And while these technical advantages are real, cryptocurrencies have far more to offer underrepresented communities, especially when compared to traditional payment methods:
Better security — Carrying cash and cards is inconvenient for some, and downright dangerous for others. Anything that’s so easily stolen (and hard to recover) is especially risky to use in areas where petty crime can be common. But cash and cards are no match for cryptocurrency wallets — which are easily secured with biometrics and recoverable through a private key that can take many different forms.
Increased accessibility — To obtain a credit card in the United States, you must be at least 18 years old and pass a credit check. Cryptocurrencies don’t have age restrictions and aren’t prejudiced against anyone who wants to hold or use them.
Greater efficiency — Traditional payment methods like checks and cards are slow to settle and can carry high fees. Even worse, those without access to credit are often resigned to using pay-day loans and check-cashing services, which carry a hefty premium of up to 10 percent. Cryptocurrencies offer much faster settlement mechanisms, along with open lending protocols, and these efficiencies have the power to reduce the social cost of payments dramatically.
What’s more, all of these features add up to a means of exchanging money that’s more radically inclusive than anything we’ve seen before. We’d go so far as to say that in the entire history of commerce, there’s never been a better opportunity to push the “reset” button on our global economy. And if by doing so, we can open up the doors to commerce for more people in more places — creating a more efficient system for everyone — then we’re remiss to not take advantage of it.
But it’s important that we study the lessons from our past. We can’t squander the inclusive promises of cryptocurrencies by bolting them onto the existing, inequitable financial infrastructure. Instead, we must work to preserve the fundamentally open characteristics of cryptocurrencies in every new feature we build and surface these benefits in the most accessible way we can.
That’s why we’re working with Carlos Acevedo on the Crypto Community Project (CCP) in the South Bronx. Alongside Electric Coin Company, Casa, Gemini and Messari, we’re making sure that students who are growing up in one of the most disadvantaged school districts in the country (where 49 percent of children live below the poverty line) can start learning about how to get involved with cryptocurrency as an alternative to traditional financial systems. As part of this effort, we’ve provided students with Zcash credit toward the Flexa SPEDN app so they can securely spend cryptocurrency directly from their smartphones — all without touching a bank account, debit card or cash.
At the inaugural CCP summer bootcamp in August 2019, students used Flexa to buy ice cream, makeup, video games, and movie tickets right in their backyard. But we’re just getting started. In speaking with the students involved, we’re looking at ways to help facilitate additional kinds of payments and further expand acceptance across even more types of merchants around the world.
More than anything, it’s been inspiring to see how quickly these students understood and began to adopt cryptocurrency in their day-to-day lives. After all, these students have grown up digital. And as the first digitally-native form of payment, it’s not hard to imagine how these students might end up shaping the future of cryptocurrency themselves.