Bitcoin Forum

Hi all,

I work at Kiva (http://www.kiva.org) as a software engineer.
I'm interested in talking more about Bitcoin and Kiva, and considering the rules here, although I am no stranger to Bitcoin, it seems it may be best to give a few posts about what sort of things are going on that can bring the two together.

There are 3 engineers here in addition to me who own Bitcoins and have an interest in spreading their use further. One of the ways we realized we could do that is by first educating the organization about what Bitcoins are. Kiva has a neat concept of self-run "Brown-bags" where anyone can discuss a topic (sort of like a Google tech talk), so we put together a presentation to educate fellow Kivans on Bitcoins, both their benefits and drawbacks.

Later on I realized some of our lenders were interested in Bitcoins as well, though as you can see, they also know that there are both benefits and drawbacks: http://www.kivafriends.org/index.php?topic=5789.0

In my next post, sometime later today, I'll discuss sort of a roadmap of how Kiva could start getting a Bitcoin project going.

Don't be led astray though, I know that any project to implement Bitcoin would take at the very least 6 months, and more likely a year, mostly due to the non-technical hurdles (like legal and auditing). So in a third post, I'll talk about why those things are an issue.

Cheers,

mrchilly

I just want to say I adore your charity! You're the first people I go to when I want to give somebody a gift! Your gift card program is so fun for me, the person who receives it and certainly the person who gets the loan! I have never seen a service that enables so much happiness! : )

Thank you! I can't wait for the day you guys use Bitcoin!

+1 as my favorite charity.

Eh, bump. This is a big deal guys. If Bitcoin is used in micro-lending like Kiva, it will have a huge impact on Bitcoin and small economies as a whole.

I really like this idea, but I see a lot of problems with the implementation, mainly due to bitcoin's small market and price fluctuation.

For example, a couple of days ago the price went down 20%. How would you deal with that? Bit-pay (https://bit-pay.com/) is a recent company that tries to solve this problem by converting the bitcoins paid by the customer into a fixed USD price before paying to merchants, but they only work within the US. Which this leads me to the second problem: how exactly do you plan to convert bitcoins into the country's currency? Besides USD, EUR and GBP, there aren't many bitcoin markets with a large transaction volume.

Wow, finally a company with a bit of infrastructure to get involved! Thought its unfortunate I do not think Bitcoin is ready yet for this, as the fluctuation of the market is too wide. I would agree that as time moves along there will be awesome opportunity for this!


+1 for Bitcoin Interest/Involvement

Howdy! Thanks for the interest. I am going to cheer on some Kivans at trampoline dodgeball shortly, so have to make this short.

I'm happy to see the interest and happy to know of fellow Kiva lenders!

Been starting to have more discussions with co-workers already again about Bitcoin. It's an exciting topic, especially since we have an innovation iteration coming up. This is a time in which Kiva engineers can work on any project they want, as long as they think it would benefit Kiva. Thus, I'm going to be putting up the suggestion to make a proof of concept, though I'll really have to hash out what the smallest possible proof of concept would be (I'm thinking a simple payment gateway for accepting Bitcoin donations). It's important to keep the goals small to begin with, as trying to do something too large right away (like trying to convince Kiva to supplement current payment methods for Bitcoin) would fail outright.

That said, I'm pretty confident that given enough time, we'll see some proof of concepts getting built, which would allow us to approach our Legal and Audit teams to discuss what the hurdles would be there.

Also, while the enthusiasm is great, I'll continue to repeat my realism, which is that any such project would have a long timeline.

The more buzz there is though, and the possibility of a bounty, definitely lead to engineers here being more interested! :)

Look forward to continuing the conversation tomorrow.

P.S. May I have permission to begin posting in the other forums?

mrchilly,

I've been using Kiva for many years now and I believe in what they do.  So props to you for working for/with them to make their stuff happen.

If you haven't already, I would encourage you to join the bitcoin channels on the Freenode IRC network.  (Freenode.net #bitcoin, #bitcoin-dev, #bitcoin-otc)   You will find many of the developers of the software online in those channels and will be able to answer any questions you might have in a more back/forth near instant format as compared to the forums (not to say that the forums aren't useful).

sounds very interesting..

This is a great idea..

New to Kiva

I would like Kiva to take Bitcoins.  I've done 30 or 40 loans and this would be a nice addition.

don't expect that. The bitcoin will have to be exchanged to their local currency, and when they pay it back, they are suffering the exchange rate risks. The bitcoin can only be used as a payment tool in kiva case, which is not so meaningful for the kiva.

Atlas, once you ask donation for Advertise on the WSJ, where did that funds go?

Well, it can start as a payment method and the lender can take on the exchange rate risk. I would. It's not utilizing Bitcoin's sweetness, but it's not not meaningful. It's just a beginning. There is a potential for this to become the de facto standard micro-lending method, but it would take a looong time. Someone has to start somewhere.

Why not? With that logic, I wouldn't spend bitcoins on anything, since I am making an exchange. Still, Bitcoin is my preferred method of payment. So I buy something today, and price goes down 20%. I win. Same with loans that are converted to local currency. The problem here is, you don't know where the exchange rates will move. If the probability is uniform, then it will even out in the long run, so I don't think about it. And it has to be uniform, or else the price would be different. :-)

Sorry for being off-topic but, if you know that price will move downwards, spending makes sense. If you know that price will move upwards, you can buy as much extra as you want and continue spending coins, the "extra" portion would be worth less if you hadn't exchanged in the first place. Not the best logic though, because you never know. I trust in the law of large numbers instead. ;)

Anyway, I think people that already have bitcoins would be interested in this. In the long run though, it might allow direct transfer, which is actually decreasing the risk. Volatility is not an inherent property of Bitcoin either. I understand that it's not automatically a match made in heaven, but can't see any downsides. (And the apparent upside is the additional number of lenders. Me for starters. ;D)

True, particularly because it is a sort of charity anyway, if I understood it correctly.

Exactly.

Do you know anything about how kiva works? Do you have any sence about what is "risk" and "uncertainty", which are both people like to avoid in some circumstances.

 If you're living in a developed country and have a decent job that earns lots of money, and you won't be bothered by the "short term" exchange rate fluctuation, because you have the choice to look forward the long run. You do not HAVE TO sell your bitcoin or have any obligation buy back bitcoin at any time.

However, for the people living in the developing countries, and even need go to kiva to lend some money to start their own business and committed to pay back the money in 6/12/24 month. What do you mean by "long run"?  Maybe the people who lend the bitcoin from kiva cannot afford a "long run". if the ppl borrow 10000 bitcoin at the beginning of the 2011 to raise some little chicken. He successfully feed the chicken and sold it 6 months later, but he find he cannot get enough bitcoins to pay back the debt.

It's not a bitcoin only problem. For the Mexican ppl, they should keep their eyes open and really think about it before they borrowing money in terms of USD. What if the USD suddenly jump up against their local currency?

You want to push bitcoin into mainstream so much that decided to lie about the truth. Don't do this. bitcoin have its own destiny and killer applications, no liar and quibble needed to make people feel the false confident.

I think bitcoin is fine as a low cost payment tool, but the Paypal charges a special low fee to the kiva, which was a charity organization. So bitcoin just won't work in this case, at least right now.

It allows donors to make their contributions anonymously, that's a plus over paypal. And not being dependent on a single centralized means of payment is good for Kiva too.

And no, the contracts do not need to be quoted in BTC, they can be quoted on more stable currencies, BTC is just the means of payment.

Actually, Paypal doesn't charge anything to Kiva. It's free.

I also see bitcoin as a mean of payment method that is instantaneously converted to another currency. Kiva can instantaneously convert the bitcoin to dollars at exchanges, or use something like bit-pay to get it up and running quickly (they don't charge fees for donations as far as I know).

I think you misunderstood. I'm talking about the lender here, not the borrower. I, as a lender, would (and should) absorb the exchange rate risk. That's all we've been talking about. Please re-read the thread.

P.S. I only have superficial knowledge about kiva, but I've lived in a developing country for 30 years, so I think I can guess what the problems might be from the perspective of the borrower.

I wasn't previously aware of Kiva, though I think micro-loans are a wonderful concept. I would definitely offer bitcoin credit and would be willing to cover the transaction/exchange spread.

exchange risks = minor.

I go from my local currency to USD and then they go across the world.  I've donated to their organisation and the loans (from my end) are interest free.  It's a step up from gifting money (or a goat) and I get to chose where across the globe I can make a small (but very localised) difference.

At the receiving end, it is a simple matter to say "we need USD25 per loan share, so at current rates = XX BTC"  not different to saying $25 = XXX JPY or XXX GBP or XXX XYZ currency.

Howdy again all.

I've been reminded again to tell everyone that obviously any such integration would be on a very long timeline, as I'm sure all you guys are aware, and to keep any expectations realistic. Currently, Kiva does not support or accept Bitcoins, and there is no clear indication in the future that it will.

Now, that out of the way, today on our innovation iteration idea board I have put up a "Bitcoin Proof-of-Concept". At Kiva we get two week innovation iterations to work on whatever want that we think will benefit the organization. These happen ever 14 weeks. Posting the idea up gives a chance for people to "buy-in" to it by contributing work points towards the idea. If the idea gets enough points, it gets funded, meaning people will go work on the idea, get it done, and then come back to some approvers to see what they think about implementing it.

This particular idea I have thrown up would just be for internal use among Kiva, and if it went well, then I could request to see whether or not it would be allowed to shown public.

The important thing here is to work in very small steps (agile development if you will), to see if we can push Bitcoin from the engineers up.

I love the discussion and want to contribute more to it soon, but have to get back to work!

Finally, again, I am just an engineer at Kiva, there are several other like me, that like you, wish to get more involved in Bitcoin, we have some free will to do exactly that, however everything requires approval from lots of people, as well as lots of time. However, we are much more likely to work on something when there are people out there who want. It's obvious from the talk here, that something like this is wanted.

-mrchilly

Exactly. This would be just like adding another payment method for USD (like adding Paypal). Kiva does not need to know anything about bitcoins, but they would "benefit" from extra donors from the bitcoin economy.

Good points made regarding implementation, and they are appreciated. This little "mini-step" got funded by one of our engineers (I personally got roped into upgrading Redmine, boo), so we'll report back here with what happens. We are timeboxed to two weeks, so you'll either know if something happened or not by the end of the two weeks. Again, this is just a small proof-of-concept step to see if we can subtly get people here to accept a role for Bitcoin internally, then push for something more external, and if that is successful, we can move on to more ambitious plans! If not, then at the very least, you'll get a case study of what the barriers were to success.

Several of you have contacted me, and I will get back to you, the suggestions for help are very much appreciated. I look forward to following your suggestions and/or soliciting your help when the time comes.

(<begin cover ass>)And again, the reason I chose to start with this, is it seems a very simple way to get Bitcoin's foot in the door, after which it can move forward further if successful with this small step, and of course just cause we're working on it doesn't mean that it will necessarily happen, and of course, I am only speaking for myself and some engineers at Kiva, but not for Kiva itself (</end cover ass>).

LOL.

Wow, that's interesting!

So, a long time in coming here is what happened with our (some engineers at Kiva) project to attempt to integrate Bitcoin.

Basically, as we talked to many people in the organization, it became clear we wouldn't have widespread support to start, so we thought we'd just go ahead and build something and ask forgiveness later. However, we did want to at least do some good due diligence on how to proceed. Thus, we started by talking to many people about their experiences with Bitcoin. We talked to some fellow non-profits, and the lawyer from one particular organization gave us some strong reasons to not move forward. We then talked some with our lawyer, who cautioned against doing anything that could distract from Kiva's core mission by bringing about controversy.

So, we shelved the project for now, out of respect for our colleagues wishes. We'd still like to proceed, but we would have to find a way to do so while knowing that everything we do will meet our mission and not place us in a position of legal questionability.

So, from my perspective, what that means is that I'm going to wait (the other engineer who was working on Bitcoin with me here just left Kiva) until there is some solid example of another non-profit to point to, as well as some more legal frameworks/precedent set with Bitcoin usage, so that I can then point our lawyer to it and ask him if we can proceed.

I appreciate everyone's advice here on the forum. I believe in Bitcoin as a viable method for transactions along with most people here, but like you guys I'm stuck waiting for someone to take the lead. I was hoping we could take some lead, but it's simply *perceived* as being too risky. I have confidence though that with all the great people working on Bitcoin that there will eventually be a path forward.

Again, sorry for the delay in response, and thanks everyone for your advice and support.

Cheers,

mrchilly

Could you list the things the lawyers had issues with?  In general terms, just so that maybe they could be addressed by the developers/community to help remove roadblocks.

Dear Kiva,

Thanks for the update.  I would go ahead and start a centralized clearinghouse to loan money to individuals in third-world countries for BTC, except there's absolutely no need for any such thing.  I can and do loan money to individuals in third-world countries directly in bitcoin (anyone anywhere needing capital, please post over here (https://bitcointalk.org/index.php?board=65.0)).  Thanks for thinking of us, but we don't need you.  I don't need to pay credit card companies to track me.

You could make the same point that after there's a single bank in town, no more banks are needed.  Though technically true, it misses the point: more players in the micro-loan game is good for consumers (both lenders and lendees).  Kiva accepting donations or micro-loan payments with bitcoin would be a welcome addition to the nascent bitcoin financial services industry.

Thanks for the update, mrchilly, and thanks for exploring using bitcoin.

Did Kiva ever decide to accept bitcoin.  Could be great for both communities

Why doesn't Kiva do an ICO?! Wouldn't that be a great way to raise capital for lending?