venezuela

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Bitcoin, Blockchain, Cryptocurrencies, blockstream, first the rest, internet shutdown, locha mesh networking, venezuela

Blockstream satellites, Locha mesh networking and the Bitcoin domesday scenario

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TLDR. Analog Bitcoin fans (aka Gold Bugs) like to talk about domesday scenarios where there is no Internet and so Bitcoin will be worthless. In the real world (as opposed to the talking heads circuit) it is not Bitcoin or Gold it is Bitcoin AND Gold. However nobody wants worthless Bitcoin. This update to The Blockchain Economy digital book describes Blockstream satellites and Locha mesh networking . These ventures and technologies ensure that you can still use cryptocurrencies even in the domesday scenario.

This update to The Blockchain Economy digital book covers:

  • Domesday Scenarios without Internet
  • Blockstream satellites
  • Locha Mesh networks
  • Context & References

Domesday scenario without Internet

The Chapter entitled Why BTC = USD1 million may be possible, but not desirable even for those with Bitcoin describes 4 scenarios that investors plan for, the 4th being what we refer to as the domesday scenario:

  • Scenario 4. Legacy Finance assets suffer a catastrophic decline and Bitcoin goes to zero. In that awful scenario, shelter, food & physical safety become critical and financial assets become only a distant memory and it is the gold part of your tail risk insurance that you rely upon.

Bitcoin can go to zero because a) it was always just a mirage or ponzi scheme or b) it becomes impossible to use because it requires Internet access and there is no Internet.

There are three ways we can be deprived of Internet access:

  • There is a catastrophic disaster from climate change or nuclear war or economic/societal collapse.
  • Your Government orders ISP’s to cut off Internet access for everybody (possibly to prevent a stateless challenge to their Fiat currency).
  • Your Government orders ISP’s to cut off Internet access for you (because you are viewed as an enemy of the state).

We look at the two technological solutions to this domesday scenario – one from above (satellites) and one from your neighbours on the ground (Locha Mesh networks).

Blockstream satellites

The Blockstream Satellite network broadcasts the Bitcoin blockchain around the world 24/7 for free, protecting against network interruptions and providing anyone in the world with the opportunity to use Bitcoin.

Blockstream is a private venture funded business with a lot at stake in Bitcoin. The theory is that even if the Internet is not available, you can still use Bitcoin via satellites. The problem is that as a centralised venture funded business, they are susceptible to pressure from Government.

Locha Mesh networks

This is a more ground up initiative coming out of Venezuela. The best introduction in the English language is this podcast interview. There is a lot about the political situation in this interview; if you want to skip to the tech, go to around minute 15.

101 on mesh networking: Traditional networks rely on a small number of wired access points or wireless hotspots to connect users. In a wireless mesh network, the network connection is spread out among dozens or even hundreds of wireless mesh nodes that “talk” to each other to share the network connection across a large area. Mesh networks use publicly available radio frequencies.

In short, wireless mesh networking is a decentralized, open permissionless network like Bitcoin ie nobody can shut it down.

This is an example of why this chapter describes The Path To Mainstream Adoption Of Bitcoin Is Not Through Legacy Finance Institutions, It Is Through The Excluded

Context & References

Why #GetOffZero Gets Sensible Investors To Look Seriously At Improbable Bitcoin Based Solutions.

Why BTC = USD1 million may be possible, but not desirable even for those with Bitcoin.

The Path To Mainstream Adoption Of Bitcoin Is Not Through Legacy Finance Institutions, It Is Through The Excluded

Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

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The post Blockstream satellites, Locha mesh networking and the Bitcoin domesday scenario appeared first on Daily Fintech.

Bitcoin & Blockchain, Blockchain, Consumer Banking, Crypto, hyperinflation, petro, stablecoin, venezuela

Venezuela’s Petro: Does Blockchain deserve this?

May be you are tired seeing the Petro saga unfold and spam your social media feeds. May be you are thinking, there you go, the joke of the decade. May be you are angry that the PR nightmare that has affected Cryptos is getting worse with this.

I must confess, I had all these thoughts going through my head when I saw that video of the Venezuelan President, Nicolas Maduro talk about Petro. The question that popped on my head is, how can human greed create so much mess? Does Blockchain deserve this?

Philosophical points aside, I must share my brain dump of the thoughts I have around this episode. Let us start with where Venezuela are economically – and perhaps that will set the context.petro

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Venezuela’s currency Bolivar has been hit by hyper-inflation which is at about 16800%. What does this mean? An economist and an entrepreneur originally from Venezuela told me this week that he has had experiences of buying a property, and going to bed only to find the property value had depreciated by 30% the following day.

That is the reality on the ground when hyper-inflation hits. Its worse than the worst Bitcoin price action.

Venezuela has been hit with sanctions which meant they don’t have free access to world markets and in essence capital. They have historically relied on their oil reserves to bail them out.

Venezuela is one of the most crypto savvy nations in the world. Their per capita crypto usage is one of the highest across the world. Put all these points together, there can be a logical happily-ever-after finish with a state-backed-stable coin. And that is exactly what they have tried to do.

While that is the logical way forward to get back some economic sanity, it can only be fruitful if the transition from Bolivar to Petro was well executed. Well executed in this case would include words like integrity, transparency, governance, monetary policy etc.,

The Petro has its own Blockchain, and derives its value from oil, gold, diamonds and iron. 50% of the value is derived from oil, and the supply of the Petro has a cap. But the state owned oil firm PDVSA has debts which is almost 8 times the market cap of Petro. So, I would doubt the integrity behind the decision of using Oil as an asset to back the crypto.

While there were close to 200,000 global purchases of the crypto as per the government, there hasn’t been any audit of these purchases. That makes the decision sound like a scam. There have been several other complaints about the petro. But for me, if a state backed stable coin cannot demonstrate sound policy and principles behind it, it is prone to a major failure.

However, if this is a genuine attempt by the government to turn its economy around , and if it managed to succeed, it would become a case study for many emerging markets countries to follow. And it would be a stark warning to the global markets that an alternative capital market is born.

I really hope the anger from the crypto community is more with the HOW of this petro episode, rather than the WHAT and the WHY. If the fears of the sceptics are found to be baseless, this could be the best thing that could have happened to the world of Blockchain and Cryptos.

Arunkumar Krishnakumar is a VC investor focusing on Inclusion, a writer and a podcast host.

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