interviews
Crypto For The Cash Economy
by Daniel Polotsky
January 22, 2020
Daniel Polotsky is the CEO of CoinFlip, the leading Bitcoin ATM Operator in the US.
frank | How did you get into crypto?
DP | It was around 2013 that I found out about Bitcoin for the first time. It kept popping up in news articles. I wanted to buy some after it appeared on my feed for the fifth or sixth time. I thought, "I've read about Bitcoin, it seems like a cool thing, like a cool alternative money investment that's not issued by the government, decentralized, something that's never been done before," so I decided to purchase them.
I went to the first Bitcoin ATM in Chicago, it was at an empanada place called Cassava. I put in cash, received a coin, but I didn't like the process. The bills kept going in and out – it took a really long time to get the bitcoin. I didn't want to do it again when I bought it again. Instead, I went on a site called locabitcoins.com which back in the day, had these listings where you could meet people in person to purchase Bitcoin.
We met at a Starbucks. I'd put down cash and she would send me the Bitcoin. We kind of got to talking and eventually decided even though the Bitcoin ATM I had used back in the day wasn't super user friendly, it's still in theory a better idea than meeting people in person because it's not safe. It's not really scalable. A single person can't meet with 23,000 people a day. There's a limit.
So we decided to work on the ATM thing. I was a sophomore in college, I was 20 years old, I was at Northwestern and I kept working on it. By the time I was 22 and ready to start a full time job, the opportunity at CoinFlip was too good to pass up. We had just under 20 ATMs – that was two, three years ago.
Fast forward to today, we're the largest Bitcoin ATM company in the world by volume, with 420 locations across the United States. Obviously we're growing and I hope to be able to get Bitcoin in the hands of as many people as possible.
This is different from the other conversations we’ve had about Bitcoin so far, in that most people aren’t treating it like a currency but rather a stock, or investment. But a Bitcoin ATM is tangible, immediate, more cash oriented. Do you find that because there's a physical component to what you're doing it's easier to explain to people?
What you were saying about currency versus investment, I don't know if I agree with that. I think Bitcoin can be used as a currency eventually, but in first world countries like the United States, it is still more of an investment or means tool.
I definitely agree that the physical element makes it very easy to explain to somebody. Its familiar. Essentially all you're saying is, "Okay get some cash. You already have a phone number, download a Bitcoin wallet, you're going to put the cash in, you're will see the exchange rates, you're going to input your QR code which is that black and white square, and then you're going to receive the Bitcoin instantly."
That sense of instant gratification and the physical component definitely makes it accessible. Because the ATM is something in a convenience store that you see in real life. They're not just moving imaginary money around.
How do you interact with something like Coinbase?
Coinbase is an online exchange where the exchange actually holds your money. You wire money from your bank, they hold it, and then you trade on the exchange, using the dollars that you have on the account. We don't hold customer accounts.
So for example, we don't have an account where you can deposit money and then hold it and then trade it. You insert the cash, we immediately do a conversion of the Bitcoin and then you receive the Bitcoin, it's on your phone. You own it, we are not the custodians.
You're not a custodian or a wallet at all?
We are working on expanding into a wallet, but no, we are more like a currency exchange. You go to a currency exchange, you get quotes for an exchange rate that tells you, “it's this many euros for this many dollars.” That's more similar to the model I see us as, as opposed to a company with a mechanism that people use to trade and speculate with continuously on.
Other than speed, why would I do this in person and not online?
Not everyone has a bank account. It's 30 million people that can't afford bank accounts, don't trust banks, don't have banks, think banks are inconvenient, or say they don't want to use bank accounts. They might want to use cash. There's a bunch of workers that get paid in cash.
There's a whole cash economy and you can't use cash at Coinbase.
They only take a bank wire transfer or a ACH. So you literally cannot use cash there. It’s a quick, easy and convenient way to use a different payment method to get it.
Does it work in reverse? Can I cash in my cryptocurrency for U.S. Dollars?
It actually does. We have around 30, 40 units where you can do exactly that. You send us the Bitcoin. Once we get network confirmation, you scan your ticket at the ATM and then cash will come out. It does go both ways.
Do you have competitors? Are there other ATM options?
Yes, there are other Bitcoin ATM companies. None of them have the volume and the low fees that we do, but they do exist. Like I said, we're the number one Bitcoin ATM company by volume in the world, but we do have competitors and they tend to be in the United States, but there are probably in the world 5 to 6,000 Bitcoin ATMs.
Are most of them in the U.S?
A pretty big chunk are in the United States. That's typical. The United States is often a leader in emerging technologies because we have systems in place where people are entrepreneurial and whatnot. Plus we have a large cash economy.
What is the sale for the convenience store? Why would they want them?
The convenience store gets the best deal of anyone. I mean, they get a check, our ATMs are really small. They're probably one and a half or two square feet by five feet. So it's really easy to place them inside a convenience store. The convenience store is not going to be able to monetize that square foot any meaningful way other than receiving rent from us, and we also give them the option for a profit share. In addition, we bring in around 1,500 people a year to any given location. So it's absolutely free advertising for them. It's not like you just see a Bitcoin ATM and you use it. You're literally searching for it and then you go to where it is. So we drive traffic specifically to that store and they can always buy something when they are in there, chips, soda, whatever it is. So there's absolutely no drawback for the convenience store.
What excites you about Bitcoin?
The thing I like a lot about Bitcoin is, you know it's deflationary, right? I love Bitcoin because of that. The U.S. dollar loses 1% to 2% of its value per year because of inflation and the government printing more. Bitcoin itself is limited in numbers, so it's a better way to keep your money long term. The blockchain it's built on is fraud proof. It's public, everyone sees it, it's fast. You can send money halfway across the world in 10 to 15 minutes, it's borderless, it's cheap. The average fee to send is probably $2 to $3. What's cool is that there's no one single issuer.
So you can't turn off the coin.
You can't sue Bitcoin. There's no company responsible for Bitcoin. It’s all around the world. It's very resistant to being able to be stopped. It's kind of like digital gold I would say. That's what I like to say about Bitcoin, it combines characteristics of a commodity and a currency. It’s something that's never been done before. And I think it's very important to keep the centralized entities like banks and governments in check. If they ever go haywire, which they have in the past, there has to be some alternative. Some digital alternative that isn't as cumbersome as gold to obtain that the average person can get.
This decentralized economy is what I’m excited about. My goal with CoinFlip is to get Bitcoin into the hands of as many people as possible so that people see what is really so cool about this Bitcoin and why it really is the future.
Not that it's going to replace Fiat currency and replace dollars, but it's an alternative and it's always important to have an alternative.
Is your prediction that this becomes a widely used and accepted form of currency in the US?
Yeah, I could always see it in unstable countries, it could even be the number one currency. In stable countries, it might be number two currency or it could just be used as an investment vehicle. But I do see it as being perhaps the global reserve currency, within 10 to 20 years as people build trust on it. It makes sense for the countries of the world to not want the global reserve currency to be issued by one country. It used to be the pound, now it's the dollar, it makes sense for it to be decentralized and not one entity responsible for it. It makes a lot of sense in my opinion.
If it does go that direction what policy will come form around it or do you think it can exist as free as it is now?
I think it's actually one of the biggest myths that Bitcoin is not regulated. That's what everyone loves to say, but it's not true. Pretty much every applicable brand in the U.S. Government has come up with regulations regarding Bitcoin. The IRS came up with guidance for how to pay taxes on it. The SEC declared it as not a security and also declared guidance on how to determine whether or not projects that are Coinbase, like blockchain-based are securities or not. The CFTC has also regulated Bitcoin as a commodity and FinCEN, which is our regulator, is the financial crimes enforcement network and we're definitely heavily regulated by them. We're treated as a financial institution.
We have anti money laundering in our customer policy, so there are rules for Bitcoin.
It's a great system and I think that it's come far from it's early days. But now I think that you still need some regulation, some basic rules to follow, even if it is a borderless, permissionless system and there are those in place in the United States.
I want to get Bitcoin again into the hands of as many people as possible and lead the financial revolution. I want to place 1,000 ATMs by the end of this year and hopefully 3,000 at the end of the next year. In addition, we're working on having an OTC desk. That would allow us to actually trade Bitcoin and other cryptocurrencies in exchange for wire transfers and vice versa, so that's something I want to expand into. And we're also working on a wallet and an app.
What is the app?
The wallet is the main component of the app but it's basically going to be an easier version of our website. You know, just the main parts, probably the map, customer service, or awards program, and obviously the wallet. So we're going to have our own wallet where people can purchase Bitcoin and that's something that's really cool because it's an additional service we can offer to our customers, an additional way we can communicate with them.
Amazing.
interviews
Waste To Energy
by Claire Arkin
February 28, 2019
This interview with Claire Arkin, Communications Coordinator for GAIA, was conducted and condensed by frank news.
GAIA is a worldwide alliance of more than 800 grassroots groups, non-governmental organizations, and individuals in over 90 countries whose ultimate vision is a just, toxic-free world without incineration.
Image via Claire Arkin, GAIA
Can you give us a baseline of the work you’re currently doing?
At the macro level view, the United States has 76 aging incinerators across the country that have been around since the '80's and '90's. They're on their last legs. A lot of them are notorious for being dirty, for emitting all kinds of toxic pollutants, and in addition they're also at the end of their lifespan. Cities are having to decide in the next couple years whether they're going to renew contracts with these facilities for another 30 years with toxic pollution, or go in a different direction, the direction that communities living close to these incinerators and have been polluted for decades want them to go in.
It's a really interesting fork in the road for a lot of these cities, including places like Detroit, Baltimore, Long Beach. In a lot of these places, folks really want clean, renewable energy, and they want to have a place at the table so that they can help steer the course of the city.
Listening to the community and trying to give the community access to resources to participate in change ties in the equity part of this conversation, for sure.
What's really interesting is that, in a lot of these places, we've seen similar proposals for new incinerators come into these communities andcommunity members have demanded that the land be used for renewable energy instead. There's a really great example of a 2014 trash, tire, and sludge incineration contract in Frederick, Maryland that was defeated. In December of last year the county just broke ground on its first solar project on the same land that was propositioned for an incinerator It's a great story about how these incinerator companies come into these communities and communities fight back and they end up not only sending these incinerator companies away, but then seeing these really incredible renewable energy projects in their wake.
What does that practical transition look like?
First of all is that incinerators are not only polluting, they're also incredibly energy inefficient, and in fact they emit carbon dioxide. They emit greenhouse gases. To consider them as renewable is a lie. And that's why it's so problematic that 23 states in the country legally classify incineration as renewable.
Going back to their energy alternatives, what happens when incinerators are included within the renewable portfolio standards of a state is that then real renewable energy, like solar and wind, have to compete directly with incinerators that emit greenhouse gases in order to gain traction. It's creating an unfair playing field for actionable renewable energy sources. By getting incineration out of states’ RPS standards, more subsidies can go to real green energy sources.
How do you approach people beyond those geographically linked to incinerators?
GAIA has memberships all over the country and the world, and our members vary from incinerator-impacted communities to organizations to individuals like researchers and academics. I think one of the big strengths of the GAIA network is that it holds people who come into this topic from all different ranges of vantage points and skill sets, and we create a space where these different members can interact with each other and share their information, share tactics, so a community that sees an incinerator proposal can counsel another community that's facing a similar proposal. We can provide a community with an expert who can talk about how incinerators emit these particular chemicals and how that affects human health. Our membership is really diverse and I think that that's one of our biggest strengths.
What do incinerator alternatives look like?
We look at it from a waste-reduction perspective, so incinerators lock in status quo waste generation.And so, basically, a city that has a contract with an incinerator has to provide a certain amount of waste for an incinerator to burn. You have to feed the beast as they say. The natural resources that need to be extracted to create the products that are then thrown in the garbage, that are then burned in the incinerator, cumulatively that's a lot of energy extraction through that whole lifecycle of these products that are being burned. And we just can't afford to continue to take natural resources, make products, and then burn these precious natural resources, enabling further extraction.
There are lots of places creating waste reduction programs, like the City of Baltimore is piloting composting programs that will divert food waste from the incinerator. That's a really good example. And there are other efforts that are underway to reduce plastic before it becomes waste in the first place. Berkeley is putting an ordinance in place that would lead to a sharp decrease in disposable packaging from restaurants and eateries.
What we're doing right now is working on a project with three incinerator-impacted communities that I think I mentioned before: Long Beach, Detroit, and Baltimore. All three are facing similar situations. All three cities are faced with these aging incinerators that have been polluting the surrounding communities for decades. In each of the three communities, the incinerator contract is running out in the next few years, and so they have a unique leverage point to convince their cities to go in a different direction. They all have really strong local campaigns that are pushing back against incineration and also seeding zero waste, community-driven solutions.
Whether that be a compost program in Baltimore or a a solar farm in Maryland, communities are building zero waste systems and trying to steer the city away from the cycle of burning into one of regeneration. We're working with these communities to create support systems, so that they have the information that they need to be able to bring to their city leaders on the impact of incinerators, the viability of the alternatives, and we're creating a platform for them to share their experiences and their expertise with one another. We want to tie these stories together in a national narrative that shows that cities are at a turningpoint and incinerators are holding cities back from energy democracy, from a zero waste society, where no community is disposable.
What information is critical for citizens to have in order to feel empowered within their municipalities?
A big part of how GAIA operates is that we go where the energy is and we take cues from the people who are actually doing the work on the ground because they really know best about what they need and they really have the wisdom to steer us in the right direction, and how we can best support. We've been connecting communities fighting incinerators with folks who are seeding zero-waste solutions in their cities, so that when they talk to their city council people they can show, "Hey, here is this piece of legislation that has reduced waste in part of the country that we could try, and here's this composting pilot program that has diverted X number of tons of waste from the incinerator, etc. " We also created a fact sheet that goes over the most egregious ways in which incinerators have polluted surrounding communities across the country that I'd be happy to share with you.
We're also looking into things like incinerator ash, so the material burned in the facility had this really toxic ash or sludge which has been landfilled, and that ash can contain a whole bunch of pollutants like mercury and other heavy metals and persistent organic pollutants like dioxins. The list goes on. And so that's a really powerful piece of information that a lot of city council people might not know about incinerators.
Our work is in supporting our members in their campaigns, so I think maybe the best thing to do would be for us to highlight a few really exciting things that are happening that our members are working on around the country because GAIA doesn't have campaigns in the way that Sierra Club, for example, has campaigns. We're decentralized in that we have a wide and diverse membership that's working on all sorts of good things. We're the hub that's connecting people to each other and making sure we're all aligned towards a common goal.