Afghan Activist Roya Mahboob on Crypto

"Bitcoin could play a very important role"

Exploring the transformation of value in the digital age By Michael J. Casey, Chief Content Officer August 20, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by     The naive "bitcoin fixes this" attitude of starry-eyed bitcoiners can be quite harmful when it comes to public acceptance of cryptocurrencies. Talking about the technology as a magical panacea for the world's most deeply entrenched problems makes it harder for outsiders to accept more reasonable arguments in its favor.    So as I launch this week's newsletter with a column addressing how crypto can help the women of Afghanistan in a struggle against male oppression that has suddenly become horrifyingly more intense, I'm wary of overstating my case. Still, I ask you to hear me out. A unique opportunity looms for crypto to be genuinely useful in Afghanistan. For this week's podcast, we move two countries to the east of Afghanistan to discuss the Indian government's controversial biometric digital identity system, known as Adhaar. Sheila Warren and I talk with renowned Indian privacy activist Usha Ramanathan, who has spent years fighting the centralized Aadhar system and who happens to be Sheila's aunt. We are also joined by another articulate voice for digital privacy, Marta Belcher, general counsel of Protocol Labs, chairwoman of the Filecoin Foundation, and special counsel to the Electronic Frontier Foundation.   Have a listen to this impassioned discussion after reading the column. I can honestly say it was one of our best. A message from ForUsAll  Use your 401(k) to lower digital currency capital gains taxes   Digital currencies have had explosive growth, but part of that growth eventually goes to taxes. Now there's an alternative. 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After Afghanistan's Tragedy, a Role for Crypto Illustration: Rachel Sun/CoinDesk When Paul Vigna and I wrote "The Age of Cryptocurrency" seven years ago, its opening lines featured a tale of how the blogging platform The Film Annex had contracted some teenage women attending a digital education school in the Afghan city of Herat and was paying them in bitcoin. Given the past week's heart-wrenching images from Afghanistan, the story is a reminder that cryptocurrency, while no guarantee of freedom, can be an aid in the pursuit of freedom. It's a tool for bypassing oppressive power structures and can play a small but constructive role in helping Afghan women in their religious, cultural and political struggles.   The school was part of a program led by Afghan tech entrepreneur and activist Roya Mahboob, who in 2013 had made Time Magazine's list of the world's 100 most influential people – at the age of 25. The Film Annex's New York-based founder, Francesco Rulli, realized he couldn't pay Mahboob's students for their blogs via the legacy international financial system. In Afghanistan's patriarchal society, a woman's access to a bank account typically required the intermediation of a man – a father, perhaps, or a brother. So, Rulli set up bitcoin addresses for them and paid them that way.    We opened the book with that story because it seemed like a good way to highlight Bitcoin's liberating capacity to disintermediate exchanges of value between people. Banks aren't the only intermediaries it can disrupt; it goes for anyone who exploits the existing centralized system's dependence on trusted third parties to place themselves between the payer and the payee. In this case, the power it challenged arose from Afghanistan's sexist socio-political context.    The Film Annex (later renamed BitLanders) was eventually disbanded, but the women's empowerment project it helped spur went on to make waves.    Tapping her student body, Mahboob formed a team of teenage Afghan girls to compete in a U.S. robotics competition in July 2017. After they were denied visas, prompting an outcry and a congressional petition that led President Trump to intervene and clear them for the visit, they finally entered the event and won a silver medal as part of a courageous achievement award. Four months later, the same team won first prize in a competition in Estonia for a solar-powered robot that can assist poor farmers in the field. The funding for that effort was in part paid for with a bitcoin award that Mahboob had earned earlier that year at the annual Blockchain Summit on Necker Island, which is in the British Virgin Islands.    Fast forward to August 2021. Amid the Taliban's rapid takeover of their country, fears quickly grew over the fate of the robotics team. The good news, Mahboob told me, is that after an international scramble to save them, 11 of the team had managed by Thursday to get out safely to Qatar, whose government supplied the plane to evacuate them.    Even so, with college-educated women burning their diplomas out of fear of attack from the Taliban, there are hundreds of thousands in danger. Dozens of Mahboob's staff and educational mentors have abandoned everything they own, she said, and are trying to get access to limited seats on evacuation planes. Even if their names are added to the approved list, they still need to run the gauntlet of Taliban checkpoints seeking to block people from reaching the U.S.-controlled Kabul airport. A role for Bitcoin or stablecoins, or both?   Bitcoin does not fix this.   Still, at this moment, "Bitcoin could play a very important role," says Mahboob.   Why? Because the imminent failure of the legacy money system is about to create a vacuum of necessity. That's something Bitcoin and other cryptocurrencies such as stablecoins are well qualified to fill.   Many bank offices have shut down. Those that are open are seeing long lines of people trying to withdraw cash while there are reports that some branches – and their cash holdings – have been seized by Taliban insurgents. There's also speculation that the new regime will invalidate the ousted government's bank notes and replace the money with their own, destroying people's wealth in the process.    People need money to carry on with their lives or to fund their escape. Foreign donors are eager to get to them, but can't do so via the banking system. In this context, transferring funds directly to a person's bitcoin wallet seems like a no-brainer.   If Afghans must embark on an arduous and dangerous escape, at least with cryptocurrency they would have a better way to transfer whatever wealth they have across borders. In decades past, refugees from war-torn areas would deal with this problem by sewing pieces of gold into the hems of their clothes, running the risk of having them stolen by common thieves or corrupt officials. Now, they can simply load up a bitcoin address that's personally accessible anywhere in the world.   That these options are now even possible in Afghanistan is due in no small part to the phenomenal work of Mahboob, who dedicated a decade to building digital literacy and computer education among women, laying a knowledge foundation upon which bitcoin can now be deployed to bypass the failing legacy system.   "This is why we've been working in high schools all these years," she told me Thursday night. "If young people can learn about computers, they can learn about bitcoin. And now everybody wants to learn how to access bitcoin. They need to." (If you'd like to donate to the cause, here's a link to Mahboob's Digital Citizen Fund, which is set up to accept crypto.)   Read Michael Casey's full essay here.  Off the Charts Inactivity, inactivity After the doldrums of the late spring and early summer, the past month's partial recovery in the bitcoin price has been welcomed by investors. But many of them are still sitting on the sidelines. So says this chart on active addresses based on data from Glasnode. Credit: Shuai Hao/CoinDesk The recent rise in the yellow line shows the recovery in the bitcoin price, which as of press time was at $48,348, its highest level in a month. But it hasn't been met by a significant increase in active bitcoin addresses, which remain more or less around levels from the spring of 2020.  One explanation could be that the latest rally is being driven by the return of the "whales," large accounts whose heavy expenditures have greater influence on price, while retail investors, who jumped on the bandwagon as bitcoin went from $10,000 in December to an all-time high of $64,888.99 in April, are for now disinterested. It remains to be seen whether those who lost money in the downturn in April and May are feeling once-bitten-twice-shy or whether they're prepared to jump in if the gains start going hockey stick again. The Conversation Robinhood, Robbing from the Poor Illustration: Rachel Sun/CoinDesk It began with some spectacular growth numbers for cryptocurrencies in Robinhood's latest earnings report. The sector accounted for a whopping 41% of the trading app's commission fees in the second quarter, up from 16% in the first, as per a Nelson Wang story tweeted out by the CoinDesk account.  A clever spot by Messari analyst Ryan Watkins put those numbers into some interesting context. He noted that Robinhood's curation algorithm is driving people to altcoins that represent a tiny fraction of total volume – hiding the two biggest projects below the fold and lumping controversial tokens such as the Craig Wright-touted BSV (Bitcoin – Satoshi's Vision) in with the "Bitcoin Family."    If Robinhood is helping to drive crypto trading, is it also helping to drive ill-informed decisions? Robinhood perhaps has more in common with a social media platform than a traditional stock exchange, at least in how it presents information to users. It curates its feed. And that got Israeli entrepreneur Maya Zehavi thinking...  To Wharton professor Kevin Werbach, the issue presents an excuse for self-examination by crypto users. If the mainstreaming of crypto is being driven by gamifying algorithms like this, it represents a dangerous shift of power to these centralized apps and thus a diminution of decentralization.  Paraphrasing Bruce Schneier's famous quip about Facebook, we could say, you are not Robinhood's customer, you are its product.     The popular trading app appears to be behaving no differently from the social media platforms, Amazon, Facebook, Google and Twitter. Just as their algorithms extract data from us, their lowly users, and then to turn that data back on us to manipulate our actions in ways that serve the platforms' interests, not ours, so too is Robinhood.    Robbed by Robinhood. A message from Coindesk Our Bitcoin for Advisors event is back for the second year to equip investment advisors with the tools to best understand how bitcoin, ethereum and other digital assets can successfully impact their clients' portfolios. CoinDesk works with the leading investment professionals in crypto, blockchain and traditional markets including Tyrone Ross, Morgen Rochard and Adam Pokornicky to design a series of keynotes, interactive roundtables and priority-driven workshops that are relevant, valuable and actionable for the advisor community. Join us for the first time in person at Bitcoin for Advisors on Oct. 6 to connect with over 300 investment advisors who are leading the way toward the future of investing. For accredited advisors on an application basis. Register today. Relevant Reads The Poly Saga What a saga. Last week's mammoth attack on cross-chain DeFi site Poly Network, which yielded an anonymous hacker more than $600 million, has produced a pendulum swing of hope and frustration for its founders and users. In a reminder of how difficult it is to deal with attackers who remain anonymous, the hacker has at times promised to return the funds and taken steps to do so, but keeps on failing to deliver them in full.  It started with last week's Tuesday's brazen attack in which someone or a group exploited a failure in Poly's cross-chain signing process to seize funds from addresses on three separate blockchains. Eliza Gkrtisi and Muyao Shen report. Almost immediately, users of the network started dropping messages to the alleged hacker in the chat section of block explorer Etherscan, which at the time showed a haul of 28,954 ETH sitting in one address. Users mostly weren't attacking the hacker; they were begging them for a piece of the action. Bradley Keoun reports.   The Poly Network offered a $500,000 "bounty" to the attacker, whom they referred to as "Mr. White Hat," a moniker implying, questionably, that they were motivated by altruism. In response, Poly announced on Thursday last week, the attacker was returning most of the funds to all three drained addresses, save for $33 million in the USDT stablecoin that had been frozen by Tether. Jamie Crawley and Muyao Shen report. Things weren't so clear on Monday this week. As Nelson Wang reported, the attacker was still sitting on the funds, prolonging their return.  And as of Thursday, even after the attacker had received their bounty, they were still holding $141 million hostage. Bradley Keoun reports. Money Reimagined A newsletter from CoinDesk See Previous Editions Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.