If This, Then Money
I Heart Programmable Money
I preach the Programmable Money gospel: that it will do to assets what the Internet did to content and communication, that any small bank or wily entrepreneur can now build money apps more viral than Venmo. I send total strangers monojis and cadoos (about which, more to follow). I crow about Uphold’s API.
Where Programmable Money is concerned, I’m both proselytiser and tout.
Emoji + Money = Monoji
For a sterling example of a Programmable Money app, check out Monoji, a CMV portfolio start-up that launched last year (developed at Subvisual in Braga, Portugal). Monoji is both an Uphold App and a Slack App, a bridge between a Programmable Money platform and an addictive collaboration tool used by millions of teams around the world.
Monoji is Venmo for casual gifts and donations. Sending a beer emoji on a public Slack channel to congratulate a teammate is fun. Even better (more generous and meaningful) is sending a beer emoji with beer money attached. With Monoji, Slack Admins can activate a donation campaign feature that hives off a percentage of every monoji sent for a worthy cause. It’s been used to fund a start-up’s weekly pizza night, collect money for a baby present and disaster relief, and to pay for Slack’s premium features (they don’t come cheap).
You can check out Monoji in action by clicking this link to join a “Programmable Money” Slack I set up as a demo. Or send me an email here for an invite. If you have an existing Slack, just go to the Monoji homepage and add this fun Programmable Money app for your team.
Monoji will be launching as a mobile app payment keyboard later this year with direct U.S. on/off-boarding of value and a really amusing set of original monojis for making and requesting mobile payments.
Cadoo: Cash Rewards Triggered by Online Events
Programmable Money apps distilled to their essence are all : “If this, then money.” A pre-defined online action (or lack of action) triggers the transfer of money to an email, cellphone, or crypto address (should be fiat-tethered crypto to make it money that the masses will accept). The “if this” part can be programmed via any digital ledger’s API, whether the digital ledger belongs to a bank, fintech platform like Uphold, or a cryptocurrency like Ether. The money transferred needs to be proximate to Bank Money, i.e. easily withdrawn from app account to bank account.
A simple illustration of “if this, then money” is Cadoo, another Uphold App that was also engineered by the talented Subvisual crew. Cadoo began as a simple project inspired by a family tradition of sending Hallmark Cards with a crisp twenty enclosed for holidays and graduations. Cadoo does away with the envelope and stamp licking. Design your digital e-card, include a message, choose a currency and amount, and then send it to the email of the person you’re celebrating. The trigger that releases the money is the Cash-Out Cadoo in the email notification received by the giftee.
I had a real eureka moment while working on the Cadoo launch: with Programmable Money, any online event (or lack thereof) can trigger the release of digital cash. That means that any activity that can be tracked via networked device can be incentivized or disincentivized with cash rewards. If you’re a fan of Freakonomics (the book and the podcast, and especially this episode), you’ll understand my excitement. Seems to me that online cash incentives (and disincentives) might well be the third biggest use-case of the Internet after Communication and Search.
What started as a money toy and advertisement for Uphold’s Programmable Money API has blossomed into a platform that will soon enable any online service or content provider to define events that send pre-determined amounts of money to their registered users. Cadoo 2.0 will be like IFTTT but for the internal business logic of online services, a Segment compatible send money tool.
For now, you can experience Cadoo by sharing this article to your Twitter feed — I’ve set up the IFTTT recipes to shoot out cadoos with Uphold money attached to the first 500 people who share this article on Twitter.
To API, or Not To API?
Of the early fintech platforms that connect cryptos to Bank Money— Coinbase, Circle, and Uphold — only Uphold’s API remains available for entrepreneurs who want to build the next killer Programmable Money app.
Coinbase quietly unplugged its old app center last year. My guess is that they’ve chosen to focus their resources on building out their own killer app — crypto speculation with Bank Money via their GDAX trading platform. I suppose if you have a good shot at becoming the NYSE of cryptos, you’d be less eager to deal with the hassle of supporting developers and dreamers. This is the PayPal approach — if your core use-case is big enough and you can dominate it, then opening up your API is at best a distraction. At worst, some loose cannon developer builds something on your API that clashes with your brand or compliance requirements.
Circle has hinted that they are going in the opposite direction as Coinbase. Maybe. It’s hard to tell. Circle exited the crypto speculation space last year and has hinted at developing what sounds like a Programmable Money layer (Spark) adjacent to their social payments app, currently enabled for U.S./EU transfers. Circle is going to have an uphill battle against PayPal’s Venmo and the EU start-up Verse, so creating a fintech developer’s paradise for Programmable Money could be Circle’s best shot at creating value from their strong bank connections and war chest of VC funds.
Banks all over the world, small and large, are beginning to understand that for a trivial development budget (call it $1MM, probably less) any bank can create a proprietary Programmable Money layer sandwiched on one side by a single quarantined bank ledger account and on the other by an API for approved developers. It’s even less expensive if a bank goes for one of the many burgeoning Bank API in a box software services — Open Bank IT and Figo are two that I’ve recently been studying.
Provided there’s no anonymous crypto in/out, the risks for banks are no different than from banking any non-cash-dealing MSB. Near-term benefits for these forward-thinking banks (I’m going to start calling them “Smart Banks”) enabling Programmable Money apps include: new deposits from Programmable Money App clients funding their app accounts from other banks, on/off-boarding fees, and the ability to market a bank’s traditional bread-and-butter financial services to a new audience of app-crazy Millenials.
The biggest boon of all for Smart Banks is having a front-row seat for the changes and challengers that cryptos and fintech are fomenting. Any bank that isn’t “too-big-to-fail” should highly value proximity to the hackers and entrepreneurs who are building the Programmable Money apps that in a few years will be as prominent a feature of the digital landscape as Instagram or Snapchat.
Fishing in the Primordial Soup
Shapeshift’s Erik Vorhees — another zealot with a vested interest — in a blog post announcing the launch of Prism (a trustless crypto portfolio managment tool), described the explosion of blockchain tokens and ICOs as a Bitcoin-ignited “Crypto-Cambrian Explosion” of digital value.
I see it more as a Primordial Soup of Programmable Money, analogous to the Earth’s primitive oceans prior to the onset of unicellular life. Bank Money is the water. Programmable Money API’s, the programmable Tier 2 layers of crypto protocols, and the cryptos and tokens themselves are the inorganic precursors to the organic molecules that will give rise to increasingly complex, useful and widely-adopted Programmable Money Apps that consumers love.
Brilliant developers (like the gang at Seegno who developed the original Uphold platform), savvy hackers, and audacious entrepreneurs are the catalysts (lightning strikes, hydrothermal vents, tidal pools) that will create Apps that will redefine how people think about their money in the years to come. Monoji and Cadoo in their present iterations are unicellular, but there’s an explosion of complexity, utility, and creativity on the horizon.
Uphold has enabled more Programmable Money Apps than any other fintech platform, but currently most of the creative hacking is being done via the Ethereum Virtual Machine — no API key or other permission required. I agree with Balaji S. Srinivasan and Naval Ravikant that token ICOs represent a 100X superior way for fintech entrepreneurs to raise capital for their projects. I marvel at the quantity and diversity of Dapps — 457 projects and growing fast.
But I doubt any of these Dapps will enjoy widespread adoption without including digital fiat outputs enabled by the APIs of banks or fintech platforms like Uphold. Just as Monoji is both an Uphold App and a Slack App, these hybrid Dapps would have one foot firmly in Ethereum (or any other programmable blockchain protocol) and the other in a digital ledger that is “PayPal proximate” to Bank Money.
If you found this interesting, share it on Twitter or LinkedIn. If you want to hear more about Cadoo, Monoji, or any other Cloud Money Ventures start-up, drop me a line: firstname.lastname@example.org
Programmable Money. My definition is Programmable Money is fiat value that can be flexibly conditioned as an input and an output by functions, delivered over the Internet, and redeemed for bank money or cash. It’s PayPal money that you can program. Uphold, with its bank connections, digital ledger, and awesome API, is the only fintech platform today that has enabled Programmable Money.
Not all digital money is Programmable Money. Bank Money is mostly digital, but scheduling a recurring payment is the closest it comes to being programmable. PayPal money is entirely digital, but PayPal’s API is tightly focused on payments. I’m pretty confident that no one is building anything cool on top of the PayPal API other than PayPal.
Nor do all programmable assets qualify as Programmable Money. Bitcoin and Ether can be programmed beautifully to do many cool things, but unpegged cryptos will never be recognizable or usable as money by 99.9% of the world.
 Zealot…Vested Interest. Sadly, I’m not sitting on a dragon’s horde of coin like the aforementioned crypto zealots. But I have dedicated the last four years — my mid-forties — to building fintech platforms (Uphold and AirTM) that connect cryptocurrency networks to banks, then constructing use-case-driven apps on top of those platforms, and finally — the most gratifying part — connecting those apps with clients who love them. I’ve persuaded investors to back the fintech start-ups I’ve founded and convinced entrepreneurs to dedicate their youth to building Programmable Money apps.
A man’s mid-forties is supposed to be a time of life when judgement, strength, and stamina are at their most synergistic and fruitful, resulting in valuable insights, sound decisions, and rewards both intellectual and remunerative. If this whole Programmable Money thing doesn’t pan out as I hope, I’m retiring to my ranch in Petaluma to farm organic cannabis (another huge opportunity for Programmable Money!).
Venmo. Do most of the kids using Venmo know that it’s owned by the same company that their crazy Aunt uses to sell stuff on Ebay? Fun fact: PayPal acquired Venmo as part of its $800 million acquisition of payment processing startup Braintree in 2014. Venmo is being slowly bent toward PayPal’s core competency, starting with in-app payments. The fact that PayPal has a revenue model to monetize their Venmo user base, makes me think that PayPal will win the social payments wars in the U.S.
Braintree acquired Venmo for $26.2 million in 2009. At the time, Venmo’s founders stated that the company was processing around $10 million in payments monthly, with 30% MOM growth. So why did such a fast-growing start-up sell for such a relatively low valuation? An ex-regulator pal of mine tells me Venmo lacked the requisite regulatory coverage for money transmission and they were facing down a swarm of Cease and Desist letters.
 Dapps. I agree with this Techcrunch Article by Jon Evans on the explosion of blockchain tokens, especially these sections:
But I can’t help but look at the state of cryptocurrencies today and wonder where the actual value is. I don’t mean financial value to speculators; I mean utility value to users. Because if nobody wants to actually use blockchain protocols and projects, those tokens that are supposed to reflect their value are ultimately … well … worthless.
So don’t tell me this is like the internet in 1996, not without compelling evidence. Instead, wake me up when cryptocurrency prices begin to track the demonstrated underlying value of the apps and protocols built on their blockchains. Because in the interim, in its absence of that value, I’m sorry to say that instead we seem to be talking about decentralized digital tulips.