hey everyone my name is Eduardo Gomes
I'm here with Alejandro Machado
we're Venezuelans currently working to
improve the crypto system and we wanted
to talk today about a very important
topic which is money is the first step
cryptid option in Venezuela living in
Venezuela so we in Venezuela there's a
vibrant Bitcoin community cryptocurrency
community and we all been using
cryptocurrencies since to start to
survive incredibly hardships like
hyperinflation infrastructure in
Venezuela has worsened the country is in
the middle of the worst economic crisis
in the history in its history and
essentially everyone in the country is
living on past glories like we are now
experiencing inflation rates of up to
million percent and there's no public
expenditure on infrastructure in the
country we're seeing things like all the
abandoned towers buildings are being
used by poor people to live in this
picture right here you can see is a
Tower of David it's an unfinished
building a skyscraper that was invaded
by by people to live in this is a state
of Venezuela right now and that's what
we wanted to address here and raise
awareness of Port in Venezuela in five
years has tripled doubled and
essentially now up to 90 percent of the
population is living in poverty the
monthly minimum wage in Venezuela right
now is about $5 per month of work this
of course as means that the whole
population depends on the government the
government has made itself basically the
bank the bank for the population the
population depends on the on the
government to give them handouts to
survive because the wages are so low and
they want it that way legality does not
equal morality in Venice all of their
laws and procedures were put in place by
the government that the National
Assembly the Congress approved to them
that seems like like good things but
they're not in Venezuela there's a
state-sponsored violence the country
since the government cannot repress
people I mean they repress people but
they cannot do so with the military or
the police because it looks bad what
they have done is that they have a
sponsor their whole paramilitary
guerrilla the way they do this is that
they have basically put people from a
political party and they have funded
them they have given their arms weapons
resources and these guys show up at any
dissident or any protest so it is
citizens repressing citizens that are
these citizens the case there is
sponsored by the government this is
exact thing that we're seeing right now
in Nicaragua with Daniel Ortega the
paramilitaries are running the are
running the country there we have been
living this since 2000 approximate since
2012 or something 15 years of exchange
control Venezuela is one of the few
places in the world where we can exactly
pinpoint where everything went to hell
in this case it was in 2003 when former
President Hugo Chavez in a public
speaking he expressed his frustration in
the fact that he could no longer fund
public programs because the government
had ran out of money the budget right so
since he enjoyed tremendous popular
support the Parliament there I proved a
lot that could essentially allow the
President to ask as much money as he
wanted these of course put tremendous
inflationary pressure into the economic
because the government the government
was printing money like crazy another
part of this is that the government
imposed the year after a currency
control mechanism this currency control
mechanism means that regular citizens
Venezuela Venice ones can
not by dollars euros or any other
currencies essentially the people the
population have to result to a black
market to get dollars if they need
Venice regular Venezuelans cannot access
these these hard currencies and so the
the control of the access to dollars the
government has it one of the one of the
worst aspects of this is that the
government has infiltrated all public
institutions even private sector because
they're the ones who decides who gets
the dollar if you're a businessman in
Venezuela and you want to invest in the
country and you want to purchase dollars
to import some goods you have to go
through the government and you need
connections with the government so these
currency control mechanism mechanism has
been used by the government since 2003
to seize power and to basically exert
influence all over the economy
Venezuelans in this scenario they have
to resort to the black-market to get
their dollars in my case crypto this is
the sort of crypto main drive in 2015 I
was basically seeking for ways to
generate income online get some work
done because minimum wage at the time
was about $30 per month everyone I was
hearing stories of people playing games
like World of Warcraft to mine gold and
they were selling that gold on the
internet and they were making more money
that engineers programmers normal
employees inside the country so after
hearing all these stories I decided what
the hell let's do some work on the
internet and I joined these platforms
things like upwork freelancer fiber to
some work things like translation
content creation etc the problem with
this is that these services they rely on
centralized payment system like PayPal
Payoneer and other gatekeepers of the
international in this case internet
money world these platforms also
cut so I was getting 70% of of the money
by using upward freelancer and then in
Venezuela I had to purchase a PayPal
account because the currency control
mechanism does not let me cash out those
dollars into my currency so I have to I
had to buy a verified PayPal account and
then I had to I was using a dealer to
sell these dollars that was earning
people for significantly less to put
things into perspective and make it
simple I was making like 40% less of my
work what I deserve just by using
decentralized service systems so I've
done in this cryptocurrencies in space
everything's in solving CAPTCHAs writing
articles and a bunch of other stuff in
at the end of 2015 I joined I stumped up
on Bitcoin talk for him and I saw there
there was some guy who was paying people
for solving CAPTCHAs and he was paying
with Bitcoin he was paying 0.0015
Bitcoin per thousand CAPTCHAs which
equals to 150 Satoshi's per CAPTCHA
there was at the time was one point
sixty five dollars per thousand CAPTCHAs
and I was making like five thousand
captures per month per per day yeah and
yeah so these this was a nice experience
I felt like it was throwing my life away
but it was a nice experience because I
was earning Bitcoin and Bitcoin was
easily tradable in Venezuela we had
served Bitcoin exchange which was the
main Bitcoin exchange in the country
which had instant feared withdrawals
something that neither of you guys have
even in the US so and there was also
local Bitcoin which was gaining
popularity back then so then this
happened I got rekt by the secret police
so in Venezuela there's disappear which
is basically the CIA and NSA combined in
the country they use these secret police
not to protect their country against
espionage or something they use
as a political tool they imprisoned
political descents and basically anyone
who is against the government this is a
2018 had just a poor stance he or
something so they detained me because I
was doing some things in the internet
and I stumble upon in an open FTP server
of these guys with sensitive information
pictures of agents they were doing some
internal stuff and they left an open FTP
server this is the level of incompetence
that we see down there yeah and some of
you may believe that this was a honeypot
no this was this wasn't honeypot this
was intentionally left open so after a
month of their Istanbul that that server
I got the team by them they raided my
house and they took not only means I did
police station but my mining rigs that I
have for etherium so this was a very bad
experience as you may imagine I luckily
I got out two weeks after that I spent
15 days in jail
and but they stolen many equipment and
they never returned it
they're probably my name's still my name
even by now or see cache or whatever
yeah so luckily about one month ago
this was all in 2016 at the end of it I
finally at the end of the year I finally
got a real job in the cryptocurrencies
scene I now work for purse darío as a
customer support agent I finally be I
was finally able to leave the country
last month and since then since then
I've been pretty much living cash a bank
list in Venezuela and in Argentina I'm
living I'm living basically with only
Bitcoin I have no bank account and it's
relatively easy in these countries to
exchange money the problem with these
countries is that gentlemen there's
there we have governments that have
decided upon themselves to control every
aspect of life they they control the
issuance of money and they have no
repairs into deleting or increase in the
monetary base which
the whole population so we are now I'm
now living pretty much some cash and
Bitcoin in Argentina by using local
Bitcoin in Venezuela sadly sir Bitcoin
exchange which was which was the biggest
description he got shut down by the
government so everyone there is now
relying on local Bitcoin to make their
payments and to try their Bitcoin yeah I
know want to leave this stage to
Alejandro who is going to talk about
more initiatives that he's working on to
improve this situation and hopefully we
can inspire some of you guys to build
tools for the people in Venezuela
[Applause]
you can also intervene I can stay here
yeah we're very lucky to have you here
and like to tell us your story and we're
really happy that you were able to make
it out thank you
so here we are this is Def Con we're
super excited about the world computer
and decentralized applications we are
talking about the things that these
design / applications could enable money
identity governance the real state of
things is that money is a beta stage
like zero point Oh identity and
governance they're coming but still very
very early so what we're doing at the
open money initiative we believe that
access to a free and open financial
system is a basic human right and we are
focusing on enabling people to get
access to free money to open money
systems we believe that decent Aliza
plication x' will be enabled by the use
of money first so what can you do as a
Venezuelan that is doesn't have access
to to monetary systems that are open
that doesn't have access to exchanging
your worthless money into sound money
you can earn across borders as Eduardo
said you can mine
you can mine ether you combine Z cash I
have friends who are doctors who are
earning like five dollars a month if you
can mines eke as your ether if you have
like a old rig at your house you can
earn 200 and that's a lifeline for many
many people we want to
or more people to get access to to to
this you can also earn across borders
and you know
Eduardo talked about this briefly as
well you can have systems that where you
can earn money by trading your labor for
cryptocurrencies that then you can
exchange for for others
typically the setup is you mine a coin
or you earning a coin and then you cash
out to Bitcoin because liquid coins the
most liquid cryptocurrency in Venezuela
the local bitcoins volume is around a
million dollars a day and it's very easy
to if if you know how to navigate the
local bitcoins interface which nobody
like not everyone does but if you if you
do know how to it's relatively you it's
it almost like earning and foreign
currency and being able to trade back
and forth so you you are almost getting
access to this open financial system and
you can almost say that you are banked
you can also store your value because if
you just keep the money in bolivars you
are subject to 98 percent depreciation
in in the year or something that you can
also defeat extortion I have friends of
friends who have crossed the border
recently and instead of getting harassed
at the border and getting seized they
could just carry a pass or in their head
and when they cross the border you don't
have bills with you who you how do you
have some bills and then they can just
seize a part of that but they can't
seize what you have here or what you
have in your phone if you protect it
well and we can provide on stop of
humanitarian aid the government has a
history of boycotting humanitarian aid
because they believe that all aid is CIA
agents I want to disrupt their
operations and they deny their the
extent of the humanitarian crisis so if
we're able to give people the tools and
45% of anis one's own a smartphone if
we're able to give people the tools to
store cryptocurrency and to get
cryptocurrency into the hands of people
getting people that live outside
Venezuela to send cryptocurrency to
their families that are earning in
Colombian pesos or in solids or in
dollars you can get money that is sound
money or real tradable money into Ana's
whele and then they're able to use it as
money then we can provide a lot of
weight for the people that are still
there so what are we doing at the open
money initiative we
creating campaigns for awareness and
education we have a wiki that's in
Spanish in English and we expect this to
be the hub for Venezuelans to come and
really learn about practical uses of
cryptocurrency we're not going to
explain how the blockchain to work we're
not gonna explain you know high-level
concepts metallics papers are not gonna
be here probably but what we want is for
people to use like just products and
services that are relatively simple so
we explain how to use opera how to use
some other wallets and how to gain
access to this open financial system we
were focusing on usability so we're
developing some wallets and some tools
that people can use to send for example
dye to each other using things that they
were use like what's up we are
experimenting with air drops and
onboarding in border cities we have like
partners
it's a project called cryptochrome said
hey is where they took this picture in
cucuta and they are experimenting with
different ways that people can get paper
wallets and and can pay with them and
get used to the idea of cryptocurrencies
and how can you help so please
first of all leave out your values if
you really believe in decentralization
you have to be aware that there's
enemies to these decentralization x'
there's people and states that don't
really care much for freedom and just
try to try to be coherent with what you
do design for those who need crypto
today and in this case we believe that
Venezuelans are very much at the
forefront of this Argentinians also
experienced very high inflation in Iran
they also experienced high inflation so
just look out for those cases where
money like the need for money is really
really pressing think about privacy
privacy don't don't put stuff on the
blockchain that you may regret pudding I
think really really hard about privacy
talk to the privacy experts talk to the
zkh community to the Monaro community
and you port for example is a great
project that really really cares about
privacy talk to them and then unlocked
by paying people in crypto if you if you
only are limited to paying in certain
banks and or certain countries you're
going to deny yourself from like this
huge pool of talent that lives in
Venezuela and elsewhere that can earn
money in crypto directly and then
finally support us we are very lucky to
come with the support of these
organizations especially shout-out to
the Z cash company which was supported
us from the beginning and we are
pressing forward with the research and
our experiments and please reach out to
us here if you were still interested
thank you thank you
let's have a couple questions people
over the closest coz hey guys first of
all thanks for you must be very
courageous courageous to do what you're
doing with the project and to stand here
in front of the world and speak about it
thank you my question is more along line
so I'm in verges and sent to get a
picture of what it's like in Venezuela
with all the challenges that yours are
facing does that mean that the market
adoption are much higher so the the
grandmothers the kids do they know
things about like how to use private
keys how to make sure that yeah ID well
address is a private account and you
know you don't want to share it so that
people can see all of your balances and
just I know just generally a picture of
MA Kurt yeah so adoption has still
increased in the country sadly we're not
at the point where people are paying
each other with crypto at the optioning
Venezuela mostly means that people are
using cryptocurrency to store the wealth
to put an example what I was doing I was
I was getting paid directly in crypto
which I hope and that was a point I we
made before I hope that more companies
who pay their workers in crypto I see a
lot of you here companies like Consensus
coinbase and in a lot of cases these big
companies don't pay their workers in
crypto they're unlocking themselves away
from talent that are living in this camp
in these countries they can get
so adoption in Venezuela looks like this
people are using cryptocurrencies to
restore the wealth to freely transact I
use it on a regular basis what I was
doing is I was exchanging each week due
to hyperinflation I was exchanging
Bitcoin each week into local currency to
spend and using using local currency
believers with the bank account but like
I said I was exchanging weekly the the
currency we're far away very far away
from massive adoption what we need in
Venezuela is you see two easy-to-use
interfaces apps exchanges sadly the
bottleneck right now is that we only
have one Bitcoin exchange centralized
Bitcoin exchange which is local Bitcoin
and there's the decentralized
alternatives RC are still very hard to
use normal people don't want to think
about all of that stuff so that's what
we're hoping to see yeah it's also it's
worth bearing in mind that adoption
Venezuela is probably at 1% or it's
certainly less than 5% of the population
are using cryptocurrencies to put
everything into perspective is just very
niche activity that we are just very
lucky to be a part of both me and
Eduardo we we got into cryptocurrency
and that we understand its benefits but
the majority population doesn't
understand when they think of
cryptocurrencies they probably think of
the petrol scam that the government was
trying to push so we still don't know or
we we we have a lot of work to do in
terms of public perception of
cryptocurrency in terms of awareness in
terms of yes it's it's a bit about
teaching people how to store private
keys maybe it's about doing that a
little bit as well but also lowering the
bar like what's up I think what subs
might might go to example all the time
because no one is was sending encrypted
messages before whatsapp came around and
not no one knows how what's up really
does it to like actually encrypt your
message and it appears in unencrypted on
the other side they manage the protocol
like people don't care about protocols
people care about products so if you
design products that normal people can
use people will use them so
yeah we're gonna do just one more
question unfortunately and then we're
gonna move on and ice I made eye contact
it was actually the person to your right
haha yes so you mentioned a lot of sort
of philosophical challenges and people
thinking more you know at those
fundamental levels but are there any
technical challenges that you feel you
know if these are solved that it's gonna
take things to the next level for your
kind of situation well yeah technical
challenges exist first one is well when
I suppose relatively is say a small
country it's 30 million 30 million
evidence mine is like 3 million that
reason to left and so I guess that
there's this project called play this
project that has been developed by the
pale blue foundation they want to do
this big airdrop to Venezuelans they
want to send millions of dollars in
bitcoin to Venezuelans that the
technical challenge is to build wallets
that are censorship resistance resistant
that can run on very poor hardware so
Venezuelans have old phones we're
talking about Android 4.0 phones so the
technical challenges are programming
applications wallets that can run on
these tiny few resources that
Venezuelans have and keeping stuff
decentralized enough so that no one can
really stop it and creating liquidity
this is not it's more like an economic
challenge rather than a technical a
computer science challenge but as I said
I believe that money is at zero point
zero stage it's it's its beta it's like
an experimental cancer treatment for
someone who's like really ill and it's
something that we might as well try
because there's no alternative like some
people say oh it's too early like people
don't have access like krypter krypter
is still in a very early stage but I
really disagree because there's there's
really no other choices the way we
there's this is the one shot that we
have at trying to solve the problem in a
way that is peaceful and you know it
gives people really access to to
monetary systems that are open so and
people already put up with a lot of
bureaucracy if you want to send money
into the country you have to like
basically give the birth certificate of
your grandmother and a whole bunch of
other records like we requisites to to
like be able to retrieve your money and
then the government ends up taking a 56
percent cut of what you send so there
were bars already so low and it's just
what the my main point of this talk is
that money is so broken in Venezuela
that even if we don't have fully
functioning money it's going to work
well enough for most people or better so
it's going to empower them
you