I Build Money Bridges
7 Insights from 7 Years of Bridge-building.
Pandemic Update Note (3/16/20): I started this blog post at the request of Airtm’s CEO Ruben in mid-Feb, just as it was becoming obvious that COVID19 would become a global pandemic requiring long periods of social distancing and self-quarantine to slow its spread and reduce the number of people killed.
It’s now mid-March as I hit the publish button on the new AirTM Team Stories blog and it appears inevitable that the pandemic will have a devastating impact on small businesses and entrepreneurs all over the world.
Airtm was started by entrepreneurs for entrepreneurs. Since 2015 we’ve helped hundreds of thousands of people and small businesses in the developing world preserve their wealth against devaluation and free money trapped in financial systems. We’ve also created tens of thousands of jobs via Airtm’s network of agents who act as bridges connecting Airtm clients’ money to where it needs to go.
During this time of quarantine and global economic turmoil we are welcoming unprecedented numbers of freelancers and entrepreneurs from all over the world to join the Airtm agent network.
It’s a job you can do from home while in quarantine, using just your laptop or cellphone. And unlike driving for Uber, working as an Airtm agent is something you can do sporadically throughout the day while attending to your family or other business opportunities.
We expect Airtm agent services to be in great demand as nation states attempt to counter the economic impact of the pandemic. The U.S. government is issuing money at an unprecedented pace. Developing world countries will soon follow. It will all end badly, as it inevitably does, with capital/currency controls, and hyperinflation.
We can weather this storm together by connecting and coordinating as sovereign individuals and peers, routing around the giant centralized institutions that have abused our trust, debased our money, and stolen our labor via currency devaluation for far too long.
We are here for you at Airtm, no matter where you are in the world.
I like bridges.
Trees fallen across deep gully streams. Those rough-crafted creek crossers you encounter on ranches. The cable-hoisted big boys with their skyscraper towers and fist-size rivets.
I build money bridges.
Every day our team works to connect Airtm to banking and payment systems so that our users have access to legacy financial services: checking accounts in the U.S., cash machines in Mexico, and card-based payment rails all over the world.
Airtm is itself a bridge whose design we based on Localbitcoins, that simple but effective way to connect anyone’s money to bitcoin via peer-to-peer exchange.
Airtm does the same for digital dollar value (as well as bitcoin, stablecoins, and other cryptos): a peer-to-peer protocol for any money (bank fiat, gift cards, e-wallet digital fiat) everywhere (via our global P2P agent network) and omni-money (crypto) anywhere (all you need is an internet connection).
Building money bridges is what’s occupied most of my work hours for the past seven years. I’ve built small ones, big ones, B2B ones, and P2P ones. I’ve even built a bridge-building protocol (also check out Bisq and HodlHodl) that I expect will power hundreds of Airtm-connected local fiat/crypto bridges in 2020.
What follows are seven insights I’ve gleaned from the past seven years of bridge-building.
Airtm: a peer-to-peer protocol for any money (bank fiat, gift cards, e-wallet digital fiat) everywhere (via our global P2P agent network) and omni-money (crypto) anywhere (all you need is an internet connection).
1. Money is IOU Tech.
Money is technology for storing work and wealth as IOUs.
The work exchanged can be paid labor or the fruit of labor — the harvesting or the harvest. The wealth exchanged can be other assets, including IOUs from other money systems.
IOUs require trust in the issuer, trust that the IOUs will be redeemable in the future for something of equal value to the work or wealth that was exchanged to acquire the IOUs. Trust is our reliance on what we assume to be true about the world — that my hunting partners will share the kill, that certain objects are difficult to produce and therefore scarce, that gold coins are in fact made of gold.
With cash fiat, we trust the government to ensure the purchasing powers of its IOUs. With digital fiat, like the balance in your online bank or Paypal account, we trust government-chartered or regulated financial services to make good on those IOUs. And we trust the government will make us whole (up to $250,000 in the US for banks anyway via the FDIC) if those firms fail.
Decentralized public ledgers and their tokens eliminate the need to trust a central bank or financial service, but even bitcoin requires trust (some might call it faith) in the incentives and game theory of the protocol and its code (more on the future of trust below in Section 3).
We trust that with our private key we can spend our bitcoin and that the issuance of bitcoin will be as expected. We have faith that the game theory and incentives of the protocol will continue to prevent double-spending even during a precipitous drop in the fiat-expressed price of bitcoin or after the last bitcoin mining reward is issued.
Good money is money that does not betray the trust placed in the IOU issuer by the IOU receiver. Good money retains its purchasing power over time and can be used anywhere to buy anything. By this definition most money is terrible. The money bridges I build are technology to address this enormous and painful problem.
With Airtm, for example, money that plummets in purchasing power by the day can be exchanged for better money quickly and easily (just ask hundreds of thousands of Venezuelans). And better money like bitcoin and dollars can be used wherever it is needed (thanks to Airtm’s global network of agents).
Good money is money that does not betray the trust placed in the IOU issuer by the IOU receiver. Good money retains its purchasing power over time and can be used anywhere to buy anything
2. Money is Freedom (else, it’s Slavery).
Money earned is stored wealth, an abstract representation of our labor (or our luck, in the case of those who inherit wealth created by the labor of others), and labor is a voluntary application of our most precious and finite life.
The IOUs we receive in exchange for our labor are recognition by the payer that we’ve contributed something valuable and are owed something of value in return.
Like many, I’ve long associated money with freedom.
For some, the freedom money brings is the freedom to consume or experience. It can buy basic necessities for those in dire need and status-signaling luxuries for those nearer the top of Maslow’s Ladder.
I vividly remember many instances of this sort of freedom: buying my first plane ticket with money earned doing yard work as a kid, my first really good sushi dinner purchased with money from publishing articles and essays in newspapers and magazines while in law school, my first fancy vacation funded with the proceeds of my first startup exit.
But for me the money that freedom provides has always been more the freedom to create, rather than the freedom to consume or acquire. It’s the freedom to build something the world didn’t even know it needed or wanted yet, principally via tech startups.
Money from investors has made my startup experiments possible, from my first venture founded in 2000 while working for one of world’s greatest entrepreneurs, Ricardo Salinas to my latest money bridge platform that is still shaky and new.
And it’s an intense love of freedom that motivates me to build money bridges.
Legally-earned money that cannot be moved or converted freely is, in my worldview, a violation of human rights, tantamount to slavery. Many find this position extreme, but I’ve never heard a persuasive critique of its logic.
No one today disputes that slavery is immoral and should be illegal. No one denies that the fruits of one’s labor are one’s own. Why then should restrictions on or devaluation of the money received in exchange for that lawful labor be anything but morally odious and reprehensible?
Inflation, capital controls, and government-rigged exchange rates (i.e. currency controls) steal our labor and betray the implicit promise that was made when we accepted the IOU in exchange for our precious and very finite hours, days, weeks, months, or years of life.
Legally-earned money that cannot be moved or converted freely is, in my worldview, a violation of human rights, tantamount to slavery.
3. Decentralization is Essential to Freedom
Our loves are mirrors of our fears.
So it’s fair to say that I also build money bridges because to be controlled by others has long been my character-defining phobia.
A bridge is a symbol of freedom, a middle finger to gravity, the great tyrant that pulls down the mightiest among us and eventually floors us all. (Elon Musk’s rockets serve as similar metaphorical fuck you to gravity).
A bridge also defies time, our mortal leash. A journey that once stole days and cost buckets of sweat and tears is transformed by a bridge into a short, safe trip across an abyss.
I build money bridges because I strongly believe that decentralization is the moral imperative of our age.
Centralization also gave rise to fiat money and its inevitable debasement, bringing with it the great evils of our current age: forever wars and a global market for war-tech hardware and software, hyperinflation, sheeple who rely upon and enable them.
We are fast approaching Orwell’s 2+2 = 5 moment enabled by Huxley’s Soma in the form of sugar, porn, social media, and endless streaming entertainment. Only in a world of Soma-addled sheeple manipulated by near-omnipotent centralized entities can MMT and UBI infiltrate otherwise rational discourse about money.
When the issuers of money adopt policies that guarantee debasement and/or impose restrictions on those IOUs convertibility into more reliable stores of value, then it’s time for Plan B: bitcoin and the money bridges needed to get there.
And so I teach my sons to repeat the Parsa Plan B mantra:
“I will not be a mitochondria in another’s cell, nor a cog in another’s machine. I will not eat the bugs, nor live in the pod. I will not allow my labor and life to be stolen through inflation and government debt. I will be a sovereign individual, not a sheeple.”
4. Money Bridges Tolls (and Trolls)
Just like their road and path analogues, building money bridges can be a solo craft or a team effort, depending on the bridge in question.
I can traverse a deep canyon stream thanks to a fortuitously fallen tree. I can exit the fiat money system because a pseudonymous coder genius named Satoshi Nakamoto planned and built what may turn out to be the most important network of money bridges ever conceived. Thanks to Airtm, I can convert bitcoin to pesos in an Argentine bank account at a free market rate.
Building AirTM’s money bridge in 2015 with Ruben and Ton required dozens of specialists in compliance, engineering, design, and fin-ops. Operating our money bridge as it’s grown to be crossed by tens of thousands of people every day requires even more dedicated experts. What started as three guys brainstorming over how to cross a formidable gap in the global financial system (from weak to strong fiat) has become a daily effort by almost one hundred dedicated and passionate money bridge maintainers, expanders, operators, and toll-takers.
Every money bridge needs to collect tolls from those who use in order to maintain and expand its utility. Bitcoin has its tolls (network fees), as does every money bridge I’ve ever built.
A leading indicator of centralization going too far is when money bridges begin to resemble troll-operated traps. Your labor and wealth is stolen through fiat devaluation and government debt. Currency and capital controls make it impossible to exit the bridge. The commercial banks fail or impose new rules and exchange rates to confiscate savings. The bankers keep their bonuses and the hard assets they bought with their ill-gotten gains, like homes and land. The central bankers join investment banks after bailing them out. The Maduros, Mugabes, and mullahs of Iran betray the citizens and destroy the economies of the countries they swore to protect.
At the dawn of the web, Paypal was a shaky little money bridge connecting US bank IOUs to an internet compatible ledger of USD-denominated Paypal IOUs. It found “crosser/bridge fit” by leveraging Ebay’s need for digital payments and has grown through use to become one of the most frequently traversed money bridges in history. It’s a beautiful money bridge.
But for millions of freelancers in Latin America and throughout the developing world Paypal has become a money trap, with a heavy toll of time and cost required to convert those Paypal IOUs into local money useful to pay rent and buy groceries.
Arguably, the difference between a money bridge toll and a money bridge troll is just a matter of degree and intent. What’s not debatable is that the more money bridge alternatives there are, the lower the tolls, the fewer the trolls. Competition lowers tolls and vanquishes trolls. It’s why monopolies are so odious and lucrative.
I believe bitcoin’s biggest near-term effect will be transforming the central bankers back to being reasonable toll-takers (via prudent debt and money issuance) instead of vicious trolls who destroy the wealth of their country’s citizens.
I believe this to be true because bitcoin and peer-to-peer agent networks like the ones created by Bisq, Localbitcoins, and Airtm make it easy for citizens to vote with their feet — sending their wealth across those money bridges and outside the grasp of irresponsible government bureaucrats.
Competition has the beautiful impact of lowering tolls and vanquishing trolls. It’s why monopolies are so odious and lucrative.
5. Institutional Trust is in Decline.
Trust co-evolved with money, like an orchid and its pollinating insect, toward increasingly large and centralized IOU-issuing entities, from collectibles traded tribe-to-tribe, to barter and coins in the bazaar, and then to the IOUs of governments, banks, and the e-wallets licensed to connect to banks.
To put it mildly, that trust in fiat and its enabling institutions has been badly abused, repeatedly, and all over the world. I view the money bridges I build as routes around that worst of that abuse. Satoshi was inspired by the collapse of trusted money bridges that culminated in the 2008 financial crisis. I was inspired by bitcoin, which I first heard about in 2013.
Satoshi’s code-crafted bridge network returned the concept of reliable scarcity to money; and what a precious and familiar thing it is!
It’s the same reliable scarcity that our hunter/gatherer ancestors knew to be attributes of the hand axes they exchanged (true too of wampum, beads, and other primitive money). It is the same reliable scarcity that my ancestors in Bavaria knew the farm goods bartered at market to have, the same reliable scarcity that my progenitors in the bazaars of Shiraz knew the precious metal coins they used to have.
When combined with non-custodial wallets (like what we’re moving to with Airtm) and peer-to-peer exchange, reliably scarce assets of decentralized public ledgers (only bitcoin qualifies today as reliably scarce I’d argue) scale ancient tribal and bazaar trust models to the Internet.
This combination of non-custodial and P2P minimizes reliance on institutional money bridges, including fiat, banks, and e-wallets, thus minimizing exposure to the downside of institutional trust, which has been reliably devastating for the past two hundred years.
Thanks to crypto and P2P exchanges and the apps and platforms that bridge the two to legacy rails and assets, I only need to trust my tribe (or the tribes formed around P2P exchanges like Airtm), and even then only for a short time.
Satoshi’s code-crafted bridge network returned the concept of reliable scarcity to money; and what a precious and familiar thing it is!
6. Money Bridge Operator is the new Uber Driver.
Airtm’s anywhere/anything-to-anywhere/anything money bridge would be impossible without a small army of agents, each a money bridge unto themselves.
Bitcoin miners play a roughly analogous role in Satoshi’s elegant peer-to-peer system, securing the decentralized ledger according to the rules of the protocol that we rely on when we hodl, spend, or receive bitcoin. They connect real world wealth (computing power & electricity) to bitcoin via Nakamoto consensus, i.e. Proof of Work.
When we first started Airtm, we had no agents and no users. We’d built the scaffolding for a P2P bridge, but without agents there was no way for clients to send their money across. Without clients there was no reason for agents to help their money make the journey. This chicken-and-egg problem is familiar to anyone who has tried to launch a two-sided marketplace.
For the first 18 months or so, I was the most prolific agent in Airtm’s peer-to-peer network, with thousands of completed transactions and a 4.8 star rating. Part of this effort was old-fashioned founder dog-fooding of product to make sure our app worked, the indispensable first-hand bug-bashing of each new build we pushed to production.
But a big part of it was also because I loved helping Airtm clients send their money where it needed to go. I felt good knowing my work was in the service of freedom. Our clients have always been so grateful to be able to save in a reliable IOU (USD) or convert money stuck somewhere into money they could use to buy the things they need. There was a real joy in confirming that a transaction had been completed, a dopamine hit like the sort that results from a Facebook like or a Twitter follow.
Thousands of Airtm agents enjoy that same satisfaction every day and also make an attractive income from the money bridge tolls they charge. And unlike driving for Uber, it’s something they can do sporadically throughout the day while still holding another job or attending to their family.
Many Airtm agents are also Localbitcoins traders, as well as completing tasks on mechanical turk or pay-to-click sites and offering services on freelancer platforms. In the future it will be common to supplement your freelancer income by also operating a peer-to-peer money bridge.
In the developing world this trend will accelerate as centralized and decentralized protocols provide tools that make it easy for anyone to operate a toll-taking money bridge.
There was a real joy in confirming that a transaction had been completed, a dopamine hit like the sort that results from a Facebook like or a Twitter follow.
7. The Future of Money is Personal.
With money bridge operators poised to become as common as (pre-pandemic) Uber drivers or Airbnb hosts, we are arriving at the age of personal digital ledgers, wallet networks, and IOUs. It’s the age of mecommerce, metail, and icos that are mycos, and an explosion of P2P financial services, from lending to fund-raising.
These personal IOUs will be easily convertible into institutional IOUs, whether issued by banks or e-wallets, and the tokens of decentralized networks. Some will be no more than loyalty points or in-store credit. Others will take the form of tokenized time exchangeable for services. Labor will be paid for by money issued by the laborer. Every sovereign individual will run his or her own “company store,” with no coercion in the commerce.
The physical wallet that once carried the paper and coin IOUs issued by nation states, has been replaced by digital wallet accounts for digital IOUs issued by financial institutions. These will be replaced by personal digital wallet networks holding IOUs issued by the person or organization administering the wallet network. This has been a rising institutional IOU trend for years with credit card reward programs and closed loop gift cards. With Slyk we want to make those same money tools available to every entrepreneur, app, and business.
Like content and communication, money too will be “over-the-top,” issued by individuals, businesses, and apps, and spendable with the same for their goods and services.
That is the future of money that I’ve been building toward over the last seven years: sovereign individuals issuing IOUs redeemable for their time and services, work and wealth made instantly convertible, people or institutions you choose to trust as ubiquitous money bridges, connected to all the world’s money via other money bridges, like the one we’ve worked so hard to build at Airtm.
Freedom is the destination we all seek. It is our birthright as human beings. We have nothing to lose but the increasingly worthless IOUs that chain us to the grim centralized status quo.