Bitcoin or How to Avoid a Series of Unfortunate Events

David El Achkar, Mar 19 2014

Let me start off by sharing a story with you.

I just arrived in Dubai, on a business trip from Beirut. As I hop into a cab out of the airport, I realize I forgot to exchange cash for local Dirhams. I only have a single 50Dhs bill on me. I ask the driver about accepting credit cards, but no luck. At my destination, I reluctantly give the driver my only bill, and get a 20Dhs in change.

As I walk away, my mouth starts feeling dry. I stop in front of a small hole-in-the-wall shop to get water. I hand over my 20Dhs. The owner looks at it, folds it, scratches it, places it in front of sunlight, makes a weird noise, then hands it back to me.

“It’s fake.”

“What do you mean it’s fake? I only just got this. From the cab. It can’t be.”

“It’s fake.”

Well, I hand over my credit card. The owner takes it reluctantly, and charges me 1.5Dhs. We’ve now unintentionally annoyed each other.

Just as I walk away, I get a call from my sister. I’m excited for her, she took some time off from work to travel and relax. But, she sounds very panicked.

“What? you lost your purse on the train? … All your cash and your credit cards were lost? … Sure, I can wire you some money. I’ll head to the bank right away. Talk to you soon.”

Change of plans. I need to find a bank ASAP. I start running while keeping an eye out for a bank. As soon as I spot one, I head for it, run towards the entrance, and BAM. Slam face first into the glass door.

It’s 7pm. Of course banks are closed. Fine, I’ll just head over to a Western Union. I’m really not looking forward to getting charged those crazy high fees…

After getting that out of the way, I text my sister the transfer details. Now, I’m really looking forward to relaxing over a good movie at the hotel. My phone rings, I just got a text. “My sister replied quickly!” I think to myself. I take out my phone, and read the text.

“A transaction on your card ending 6964 is accepted for USD 6,216.75 at THAIMAZON.CO in THAILAND” (I subscribe for credit card payment notifications by SMS)

I guess I’ll be spending the evening with VISA customer support to get my card cancelled and reimbursed…

Bitcoin Makes Tales Boring

Did you notice what happened? I don’t mean how poorly my day went, but how inefficient our whole financial infrastructure is.

Today, I can hold a live video call with anyone around the world for free, but I can’t send them my money without getting stuck waiting in line and getting charged hefty fees for the privilege. And it doesn’t end with money transfers, from the credit card fees that shop owners pay to the constant stream of identity theft stories, people everywhere are struggling to bring cash online.

Let’s replay this scenario the way it should happen in our technologically advanced civilization.

Out of DXB, I hop into a cab that drops me off at my destination. I take out my phone, scan his Bitcoin account QR-code (similar to a barcode) displayed on the dashboard, and transfer the amount owed with a click of a button.

I then walk over to the shop to order a bottle of water. I transfer 1.5Dhs (the QR-code is printed in front of the cashier). The owner instantly receives a text on his old Nokia phone confirming the transaction.

As I walk away, I get that unfortunate call from my sister. But wait, she sounds all nice; too nice. Oh right, you can’t physically lose your digital wallet, you can always store a backup. So what does she want?

“Dave, I didn’t budget enough money for my trip, could you please send me some?”

I sit on the side of street, and open up my laptop. (I don’t like to store large sums of money on my phone wallet.) I access my larger account, then transfer 10,000Dhs as easily as I had done with 1.5Dhs. One click and done.

“I just got it, thank you so much!”

So What Is This Bitcoin You Are Talking About?

In fact, the simplicity of the second story belies the powerful innovation happening behind the scenes. I’m talking about Bitcoin. A technology that enables a decentralized digital currency, a fast and secure payment network, and a disruptive payment protocol. That’s a mouthful, so let me break it down.

Bitcoin is a decentralized digital currency. You can think of it like cash, but designed, from the ground up, for an increasingly digital and globalized world. A world where paper money and its associated products (e.g., credit cards) are becoming very inefficient. My story already highlights (only) a few of these problems: identity theft, the need for money conversion, and counterfeiting.

Bitcoin is a fast and free payment network. It is similar to the email network, but for sending money instead of messages. On the Bitcoin network, you can move any amount of money, anywhere in the world, instantaneously and close to free. Just like email, you put in the recipient’s address, the content (or in Bitcoin’s case, the amount) and click send. Done.

Bitcoin is a disruptive payment protocol. This is one of the more advanced aspects of Bitcoin: programmable money. Since Bitcoin is built with code—at a very basic level, it is a computer program—anyone can actually add new features. Just like apps on the Appstore, if someone can think of a new feature they can build it on top of the Bitcoin protocol.

And This is Why Bitcoin Matters

Whether or not the above appeals to you, in the end, what truly matters is Why.Why should anyone consider Bitcoin? Why should individuals start using Bitcoin? Why should merchants accept Bitcoin? etc.

Few of us understand how TCP/IP and HTML work, how a jet engine works, or even how the credit card network works; but that doesn’t stop us from surfing the web, boarding a plane, or using our credit cards . Similarly, we don’t need to understand how Bitcoin works to appreciate its benefits and applications, and ultimately adopt it. It’s the why that matters.

Here’s why Bitcoin matters—briefly

It’s open. Anyone who has access to a phone or an internet connection has access to Bitcoin, as well as all the services built on it—like apps on your iPhone.

That’s a big deal for the un-banked or under-banked, who account for the majority of the world population. They are left behind by our financial sector, and forced to live in a cash-only society. But since most of them have mobile phones, this may no longer be a problem.

That’s also a big deal for anyone that wants to get a business started but can’t afford the complexity and cost of doing so (e.g., opening a merchant bank account, acquiring credit card equipment, absorbing high transaction fees, etc.)

It’s fast, and (nearly) free. Whether you’re sending $1 to a person in front of you, or $1,000,000 to someone halfway across the planet, the transfer is near instantaneous and the cost is negligible. You’re sending bits of data, after all.

It’s secure. You simply can’t counterfeit military-grade encryption, the technology behind Bitcoin.

It’s decentralized or peer-to-peer. Bitcoin does not depend on any central authority to operate, rather it is supported by everyone on the network—as is the case with the Internet.

This matters for simple issues, like being subject to banking working hours (the Bitcoin network never sleeps); as well as more serious ones, like the hyperinflation that has destroyed some currencies in the past (Bitcoin supply cannot be manipulated).

It’s borderless. It lives on the Internet, and can move freely on the Internet. Your bitcoins are not confined within physical borders (e.g., a country) or digital borders (e.g., the Paypal network).

It’s private. When you make a payment, you never share any compromising information. Contrast that with credit cards: every time you use it, you are essentially revealing all your supposedly secret information (i.e., name, number, expiry date, CCV), and hoping that the person on the other side of the transaction doesn’t steal it.

And much more…

Doesn’t this make more sense? I’d like to think this is how we would design a currency and payment system if we had to start from scratch today.

Well we are—somewhat—starting from scratch. It’s only recently that we’ve been able to accomplish the above and more, thanks to Bitcoin. However, Bitcoin is still an early experiment, adopted by a few (million) across the world. But it’s growing very fast, and proving to be a very robust system.

If you want to stay up to date, check out , an upcoming resource for all things Bitcoin in the Middle East. 


More about David El Achkar, @daveachkar

David is the Co-founder of Nyle, a Bitcoin startup based between San Francisco and the Middle East. David has also made it his mission to spread awareness and adoption of Bitcoin in the Middle East, founding the Beirut Bitcoin Meetup Group and @BTCLB and working closely with a number of organizations across the region. Prior to that, David has worked as a consultant with McKinsey & Co, as an Event Director, and as a mentor with organizations ranging from startups and not-for-profits, to Fortune 500 companies. 


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