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
Reshaping The Immigration Narrative
by Lizania Cruz
October 15, 2019
Albert Saint Jean, the chief organizer for BAJI and Lizania Cruz, a designer and the founder of We The News, sat down with frank to discuss representation in the immigration narrative.
The partnership between BAJI and We The News exemplifies the ways that issues of race, immigration, and class can and should be written in conversation with one another.
This interview was conducted and condensed by frank news and was originally published on July 15, 2019.
Albert: My name is Albert Saint Jean. I am the New York City organizer for the Black Alliance for Just Immigration [BAJI].
When I heard about BAJI, this was before Trump, I had gotten interested in volunteering, in organizing with BAJI, because a lot of the stuff they were focused on were things I’d seen throughout my life. I was born here, but I was the first of my grandmother's children born here. Everyone older than me had migrated over and I saw what they had to go through with their status, their relationship with law enforcement, their relationship with the criminal justice system, their fear of deportation. I felt like BAJI was at the nexus of a lot of those things when I found out about it three years ago – and long before Trump, because they were things affecting black people. Basically I got into it because it spoke to the things that I saw in my own personal experiences.
Lizania: I'm Lizania Cruz. I'm an artist and a designer originally from the Dominican Republic. I moved here in 2004 when I was 21 to finish college. I started We The News – doing work around shifting the current narrative on migration and trying to figure out how we [people] change.
I was frustrated with the way the current immigration narrative was – only talking about the majority within the minority group, and how the media was taking over the narrative. I didn't feel represented. I didn't feel like our stories were pluralistic in any way. So I started wondering what if we told our own news and our own stories – what would that look like? That's how We The News as a project started. I was talking to different organizations and someone recommended BAJI. I thought it was super interesting how they were talking about migration, blackness, and at the same time talking about the correlation of that and the criminal justice system, which for me, no other organization was doing. Getting involved with BAJI has made the project what it is today. It has also politicized me in ways I wasn't thinking about.
What are those ways?
Lizania: Looking more at the similarities between disenfranchised communities already in the US and the immigrant movement. Again, I don't think we do that as often, and now I'm constantly thinking of ways that story could be told, and what are the lengths, and how do we organize collectively rather than organize in silos. We're organizing for LatinX folks and maybe labor workers, and we're organizing for people that have been affected by mass incarceration, why are those two things not organized in tandem while looking at the policies in the same way?
You mentioned you feel like the narrative is not pluralistic.
Lizania: Yeah.
And very mono.
Lizania: Exactly.
Does the division of groups fighting for their specific causes as separate give their stories more autonomy? If all these issues are nuanced, where do they blend and how do you deliver a message that covers, or even touches on, all of the personal?
Albert: Particularly with BAJI, they look at the nexus between the similarities between African Americans and black immigrants.
When we talk about the immigration issue, we shy away from the racial aspect of it. This is a racial issue. The diversity of immigrants we have now is only possible because of the rights that African Americans fought for in the early 60s. The 1965 Immigration Act was a part of that, the whole civil rights act. That allowed for the diversity of other immigrants to come here. When we shy away from that, we miss a large swath of what's going on in the immigrant community. We miss talking about what are the drivers that send people here in the first place?
US policy is responsible for a large bulk of us being here. My family wouldn't have come here if it wasn't for the United States supporting a dictator for so long. Her [Lizania’s] country wouldn't be the way it is if it wasn't for US agribusinesses and foreign policy.
Where did your family come from?
Albert: Haiti.
Another place that they [US] supported dictatorships. It's kind of like the stories we're able to show the common thread is US policy, and a lot of it is the racialized aspect of immigration in the United States.
Lizania: I'll add to that. I see specifically in the work that we've been doing with We the News, a creation of a platform where all these stories could live together. There's not as many platforms like that. Finding a place and a platform where people could come together and share their stories and have a voice. None of us are the same and we all have different experiences, but how the commonality becomes the difference, is always what I'm interested in questioning.
Even when we facilitate the story circles, we open with a prompt that is the same for everyone. But nobody responds the same way. How do these stories sit together and how do we make a space for that to happen?
The personal narrative is a driver for policy in this case. Are you guys interested in changing policy?
Albert: Exposing policy, changing policy. Those are important. But I think with my work, what's even more important is changing structural issues.
Is policy complicit in structural issues?
Albert: Well, there's policies that are a symptom of structural racism. Most people look at the Trump era as, for what it is, a terrible era, especially for immigration. But these problems have been going on long before that. The 1996 laws were implemented after Timothy McVeigh bombed Oklahoma City. A provision they made was that anybody that commits a crime that's a foreign national would be deported. Whether it’s retroactive or not, you don't even have to be convicted. A lot of people I come across aren't convicted. Yes, it's policy driven, but a lot of it is also sustainable. I'd say a majority of this is systemic. So yeah, there's policies that are pushing against it – but also these narratives show the systemic issues I see as well.
Lizania: It's a way of popular education. I think policy is important, but I think you have to start from the bottom up and create the popular education. People vaguely understand where all these issues are coming from. And you could potentially organize to create policy – but even at BAJI, those who are organizing and those who are going to Congress to affect policy, are different.
Albert: Yeah, that's true. Sometimes I'll go to DC and help lobby for certain things or meet with city officials along local issues. But the bulk of that work is in the hands of people who specialize in policy. Not that these folks have any faith in this system, it's just that they know that this is another strategy.
They feel as though we still have to use policy as a tool. So my job is to create the pressure that Lizania is talking about. Creating a space for people in the community to not only learn about themselves and their rights, but also learn to advocate for themselves. The more they start to realize that their experience is not an anecdotal experience, that this is more of a trend than a norm, they're able to do all the things she just mentioned. That's an organizer's job. To make sure that education is there. When we look at past movements, it wasn't Malcolm X or Martin Luther King who started those movements. They came out of those respective movements, to articulate the needs of the people. We have to start somewhere. I think the more we share this with people, the more likely people are going to be able to fight for liberation so to speak.
What's your dream in this?
Albert: In an ideal world?
Yeah. What do you want immigration in America to look like? To feel like?
Albert: I would say the way it was when my grandmother came in, in the 70s. You just come here – I honestly don't believe in borders, to tell you the truth. But, in my lifetime, I would like for people that are undocumented to obtain amnesty, I would like for there not to be any caps or quotas, regardless of where people come from.
Lizania: I ask this question to myself all the time. We're doing this work but what does it look like when the work is done? I think that if this system runs how it's supposed to, there wouldn’t be quotas for the people that could come here.
Albert: Diversity visas.
Lizania: There won't be diversity visas. I was just having a meeting with my lawyer, and the type of visa I’m applying for has a two year backlog, and he's like, "that's actually nothing." Plus the amount of money that goes into the process. It's just not realistic.
It’s interesting to look at the immigration argument coming from the GOP in the 80s, Bush H.W. and Reagan in 1980 are wildly different than Ted Cruz today.
Albert: What a lot of people don't realize, and this is where I hate the two party system, for the reason you pointed out, is at one point in time the Republican party was way further to the left than Democrats now, than Obama. What Reagan did, the amnesty – and don't get me wrong, all the fuckery that's happened started with Reagan in this country, it started before, but Reagan really took it off – but he gave general amnesty in the 80s. This is someone who right wing people worship, you know what I mean? When I look at Democrats and I look at how they're like, "Oh no, be realistic. This is what we can fight for."
When people claim to be moderate now and think, "Oh, I'm moderate, I'm in between. I understand both sides." No, you're a conservative. When you look at the historical analysis of it and how far right this country has gotten, how this country doesn't recognize that is even scarier. The fact that it is normalized, even on the democratic side, is scary. The fact that Bernie Sanders and Elizabeth Warren can be considered extreme, it's very scary because these were all basic ideas people had.
It's interesting you brought up this thing with Reagan and Bush. I mean, Republican, Democrat, they were always messed up. But Republicans were more strategic. Coming out of the New Deal Era, they knew they had to make concessions in certain places. Especially since they had a labor shortage for certain sectors of the economy. They needed the Bracero Program and domestic workers to come over. They were like, yeah, why would I be against this? They were very practical.
Wet foot dry foot for Cubans. If they made it to the mainland of the U.S., they automatically got a green card because they were fleeing communism. The Haitians, however, were fleeing a dictator who's indiscriminately massacring whole families, women, and children on the streets. 60,000 people were massacred underneath this dictatorship, and people were fleeing. I had family members who were fleeing, but they didn't have the same privileges Cubans had. Once their foot hit land they could be apprehended and found out. I just thought that aspect of it was very interesting to me. The US link. People magically forgot that the US created the situation in El Salvador and Honduras and all these places as late as the 80s, and no one's talking about that. Why are all these people showing up here?
Do you think there’s a lack of education in America about U.S. presence in Central and South America?
Albert: I think that's true globally. Even when we talk about the Middle East we're not really clear about the roots of all those problems.
Lizania: I did a poster that was also part of We the News looking at all of the different interventions in Latin America specifically by the US.
While you're critical of American actions abroad, are you also hopeful for the "promise" of America?
Albert: No, well, I'll say this. I'm hopeful if we can tear down the structures that we have now.
The majority of Americans want the same things. Majority of Americans do not care about if Lizania has access to citizenship or not. But politics makes us pit each other against each other. Politics is what uplifts white privilege and makes white folks say, "hey look, you know what? These immigrants and these black folks and these other folks are threatening my security." Politics does that. In reality, most Americans want the same thing and I think that the system we have now does not allow the will of the people to really be represented.
Lizania: If we aren't hopeful, why would we do it? With my work, I'm just trying to find ways that our reality could actually be a more inclusive, a better reality for all of us. I think the reason I do the work I do is because I believe that there could be a better way and that we have to construct that way for ourselves. Hopeful is not the right word. Let’s see how America could work for our communities in a better way. Or maybe it's not only America – how can we as people of the world, live better?