Bringing Bitcoin To Cuba

Bringing Bitcoin To Cuba
Carlos M. Gutierrez, Jr. - Innovator, Lawyer, Investor, Skateboarder
Posted: 09/22/2015 5:53 pm EDT Updated: 09/22/2015 5:59 pm EDT

Since its introduction in 2008, Bitcoin, the world's most recognized and
frequently used crypto-currency has continued to grow in popularity.
Bitcoin's peer-to-peer decentralized structure has steadily attracted
global users seeking to make purchases and transfers of money digitally,
privately, and with minimal transaction costs.

At its current market cap of over $3 billion dollars, it is difficult to
find an area of the world which has not been touched by Bitcoin. Yet,
until recently, Cuba was one of these places. With low levels of
internet penetration on the island, not only are few Cubans even aware
of Bitcoin, but the lack of technical infrastructure can serve to impede
the ability of Cubans to undertake virtual currency transactions.

Into this scenario, stepped in Fernando Villar. A first-generation
Cuban-American tech entrepreneur based in New Jersey, Fernando made his
first visit to the island early this summer. As the founder of
BitcoinCuba, Fernando's mission was twofold: visit family and experience
the county of his parent's birth and explore the capacity for Cubans to
adopt virtual currency in their everyday lives. As a result, in
mid-July, Fernando became the architect of a historical moment: Cuba's
first documented Bitcoin transaction.

I recently had the opportunity to sit down with Fernando to discuss his
background, the goal of his organization, the potential of virtual
currency in Latin America, and his trip to Cuba. Hope you enjoy!

CG: Virtual currency is a relatively new and complex concept, what is
your background and what drew you to virtual currency/Bitcoin?

FV: I've been working with digital technologies for over 6 years as a
consultant and designer. I was drawn to Bitcoin a few years ago. I heard
about it on a forum and researched the potential it had in facilitating
payments, especially in the developing world. Bitcoin, in essence, is
digital cash and like the USD and Euro, can be used it to buy tangible
things. The only difference is that it isn't just money, it's the
internet of money. Bitcoin is a decentralized and deflationary currency
backed by math and not by a central bank or authority that can
manipulate it.This is a powerful technology because it eliminates the
need to rely on payment processors and banks. It's transparent with a
public ledger (blockchain), secure, nearly instant, and free for
everyone to use.

CG: You are the founder of BitcoinCuba. What's your organization's goal
and why Cuba? In the short term, what will BitcoinCuba seek to
accomplish? And in the long term?

FV: BitcoinCuba's mission is to inform average Cubans and the small tech
community about the use of digital currencies like Bitcoin. Cubans have
much to gain from using this currency and technology, especially now
that they are in a position to leapfrog current financial and
telecommunication infrastructures.

Cubans are not using credit or debit cards and most do not have a bank
account. Bitcoin and blockchain can serve the needs of the unbanked,
including entrepreneurs and individuals on the island. For instance, an
entrepreneur in Cuba can offer their goods or services and get paid for
it by a customer any where in the world instantly. A family wanting to
send money to relatives in Cuba, using Bitcoin, would now have a method
that is faster and cheaper than ever. This will take some time to be a
reality but it's already happening around the world.

In the short term, BitcoinCuba is planning on organizing workshops and
conferences to inform and educate Cuban entrepreneurs and anyone who
cares to know about this new technology. In the long term, BitcoinCuba
wants to help facilitate a marketplace for digital currencies so that
Cubans can start using and developing Bitcoin technologies.

CG: You recently completed the first documented Bitcoin Transaction in
Cuba. This event has been described by some observers as historic. Tell
me about this transaction, how it came about, how you did it, and can
you also talk about some of the challenges to scaling the use of Bitcoin
in Cuba.

FV: I was taking a personal trip to Cuba to visit family on the island.
There had been reports about the new Wi-Fi networks in public parks and
I wanted to test their connectivity. BitcoinCuba partnered with Chris
Groshong, CEO of Coinstructive.com, a Cryptocurrency and Blockchain
consulting firm based out of San Diego. As soon as I bought a Wi-Fi card
from one of the kids selling them in the park, I sent Chris an email to
go ahead and send Bitcoin in real-time to BitcoinCuba's public address.
The $20 Chris sent from San Diego made it to Havana in a few seconds
using Airbitz, a Bitcoin smartphone wallet with a fee of less than 1% .
It was validation that the government run Wi-Fi allows for these types
of transactions.

The main challenges with scaling Bitcoin in Cuba are the lack of
education regarding digital currency and internet connectivity. Cuba has
a dual-currency system; there is one national peso for mass use which
Cubans are paid in, and a more valuable peso pegged to the USD known as
the CUC in which most good are sold in. Although the government has
talked about unifying both currencies, Bitcoin can be another currency
thrown into the mix. There is going to be a need to teach individuals
how this new currency works and its value, which is why BitcoinCuba is
partnering with Coinstructive and other groups in the Bitcoin community
to facilitate the educational portion as well as galvanize a community
on the island that will hopefully learn all the ins and outs of Bitcoin
technology.

However, in order for Bitcoin and information to thrive, Cubans need
access to the internet. There is no other way around it. Cubans by and
large don't have home connections, and access at hotels costs about $7
an hour, which is out of reach for most. The Wi-Fi parks with their
$2/hour service is a start, but companies like Google, Facebook,
Twitter, Netflix and Airbnb, all who have recently come out and talked
about their interest in expanding their services in Cuba, can play an
important role in helping to open up the internet for all Cubans.

CG: Some observers believe that virtual currency can play an important
role in facilitating transactions in the developing world. What role do
you see virtual currency playing in the future of not only Cuba but also
Latin America and other areas of the developing world?

FV: The power of digital currencies like Bitcoin lies in the ability to
control your own money without any interjection from central banks,
authorities or governments. Essentially everyone can become their own bank.

Bitcoin is a solution that will help the majority of unbanked Cubans
finally tap into a the global market because it's almost effortless for
a recipient to setup a Bitcoin wallet on their smartphone even if they
don't have a bank account. In the case of Cuba, more people now have
iPhones and Androids sent from families abroad than have bank accounts.

The real break-through for Bitcoin in Cuba, Latin America, and the
developing world, is offering new ways of accepting payments and sending
remittances where there is low credit card penetration and a reliance on
cash. We are already seeing a disruption in the remittance market in
Africa and Asia with companies like BitPesa and Bitspark. In Latin
America, Bitcoin is making strides with remittance services, exchanges
and startups in Argentina, Venezuela and Mexico. Because Bitcoin offers
an instant and low-barrier solution, it will be a game-changer for Latin
America.

CG: You mentioned you are Cuban-American. Many reports from the island
note the emergence of a growing tech savvy entrepreneurship oriented
community. Is there a role to be played by young Cuban-Americans such as
yourself to collaborate with your counterparts on the island and help
foster the growth of such a community? Does a desire to do so exist? If
so, what kind of activities can facilitate such interactions?

FV: Bill Gates has said "when people are empowered, they will use
digital technology to innovate on their own behalf." Cuban-American
young professionals have the capacity to empower this growing group of
tech savvy entrepreneurs in Cuba by establishing people-to-people
connections and sharing their knowledge with them. During my trip, the
digital entrepreneurs I spoke to are knowledgeable and hungry to learn
even more.

My belief is that our generation of young entrepreneurs on the island
and in the U.S. are not responsible for the political problems of the
past, nor should we have it hanging over our heads forever. This is an
incredible time in history where technology can solve many problems, and
keeping politics aside, we should be in a position to help give young
Cubans the tools and knowledge to innovate. I truly believe Bitcoin,
blockchain and other digital technologies will be the tools used by
Cubans to develop their own future.

CG: As a young entrepreneur with a grand vision, you are a role model
for all of us seeking to turn our dreams into reality. Any parting words
of wisdom or advice on how you've been able to do it?

FV: Being an entrepreneur usually involves a series of missteps before
finally nailing the right idea. Most good ideas don't emerge from thin
air, they involve a ton of thought and work to get it to be successful.
Being persistent is crucial because what might initially seem like a
misstep can derail a potentially good idea.

As relates to Cuba, the most important thing to do, as hard and
impossible as it may sound given the political strife between both
countries, is to remain optimistic and open. I'll never forget the
reasons why my family was exiled from Cuba but I can try to forge a new
future built on transparency and trust. It this happens, Cubans and
Americans can mutually benefit from each other. I believe digital
technology can help build powerful connections between people that have
been separated politically. If our two countries are going to build a
new relationship, our two tech communities should do so as well. I'm
excited to see the innovations that will come when this happens.

Follow Carlos M. Gutierrez, Jr. on Twitter: www.twitter.com/cmgutierrezjr

Source: Bringing Bitcoin To Cuba | Carlos M. Gutierrez, Jr. -
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