How can bitcoin penetrate rural India?

[minus]

Today I met with a head of a Organic farming co-operative initiative in Tamil Nadu and was trying to see how bitcoins can fit into the picture.

I was focused on two things
1. To encourage distribution of bitcoins
2. To encourage people transact with bitcoins

So I asked them if they could issue a very small portion of the profit (say 0.5%) as bitcoins?
They were willing to experiment.

As I was discussing how money can easily be transferred across wallets. The fundamental question was
1. Most of the people in villages do not have access to internet or smart phones. So how are these people going to hold or transact in bitcoins?

So are bitcoins only for literates with a understanding of technology and who hold sophisticated gadgets ?

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[Benson Samuel]

Today I met with a head of a Organic farming co-operative initiative in Tamil Nadu and was trying to see how bitcoins can fit into the picture.

I was focused on two things
1. To encourage distribution of bitcoins
2. To encourage people transact with bitcoins

So I asked them if they could issue a very small portion of the profit (say 0.5%) as bitcoins?
They were willing to experiment.

As I was discussing how money can easily be transferred across wallets. The fundamental question was
1. Most of the people in villages do not have access to internet or smart phones. So how are these people going to hold or transact in bitcoins?

So are bitcoins only for literates with a understanding of technology and who hold sophisticated gadgets ?

There is a need for a mediator or community center where the village private keys can be stored.
Remember, online banking is not for people in villages as well, but there is someone assigned with a computer who does the bits for them.
The difference now, is that they can directly get paid without having to follow banking regulation or proximity.

But TBH, unless there is a processor who converts the BTC to something less volatile, the villages will suffer.

[subvolatil]

Today I met with a head of a Organic farming co-operative initiative in Tamil Nadu and was trying to see how bitcoins can fit into the picture.

I was focused on two things
1. To encourage distribution of bitcoins
2. To encourage people transact with bitcoins

So I asked them if they could issue a very small portion of the profit (say 0.5%) as bitcoins?
They were willing to experiment.

As I was discussing how money can easily be transferred across wallets. The fundamental question was
1. Most of the people in villages do not have access to internet or smart phones. So how are these people going to hold or transact in bitcoins?

So are bitcoins only for literates with a understanding of technology and who hold sophisticated gadgets ?

Well the question about technology is a  big one.  the bitcoin network requires transaction  to be  verified, making  offline transaction using  paper wallets not  viable. even if these private key wallets are  issued by a Certifying Agency, forgery becomes a  problem.

the short answer  is  that the farmer  will require a device  with an internet connection. not a sophisticated gadget but a simple  android device or an  atom/arm computer.

a co-operative can use  this  as their  main source of  transaction,  as this  does not  come  down to an individual  farmer. But  rather  the  wholesale  of  goods to  the market or  individual buyers  through  delivery or pickups.

[minus]

Today, these farmers have bank account with a debit card and everyone holds a mobile phone (a basic one).

1. Can something be worked out of this or do you thing the additional device (be it a simple android device) is essential .

@benson Most of them do not engage in on-line banking, they use banks to get paid, ATMs to withdraw and Paper cash to spend.
And Banking regulations don't seem to affect farmers much. I think the idea of a "community center" will lead to something similar to a co-operative bank.

[subvolatil]

Today, these farmers have bank account with a debit card and everyone holds a mobile phone (a basic one).

1. Can something be worked out of this or do you thing the additional device (be it a simple android device) is essential .

@benson Most of them do not engage in on-line banking, they use banks to get paid, ATMs to withdraw and Paper cash to spend.
And Banking regulations don't seem to affect farmers much. I think the idea of a "community center" will lead to something similar to a co-operative bank.

Well for a  more  permanent solution  would be a low power ARM power  compute may be  a pi, it would  cost  the  co-operative less than Rs 5,000/ . it would be  safer that way, or alternatively an  android device would  give the cooperative mobility while  doing  sales. a device  connected to a  network is  essential, for doing  transaction. for storing BTC they dont  need to be on the  network. 

I for one cant  see  any other  way of  doing this .

[coldbreeze16]

Every village has at least BSNL and Airtel towers. GPRS is sufficient for transaction (heck, I even use GPRS for mining as none of the 2 broadband providers will give me internet due to location). An android phone can be had for 2.5K. An used netbook for less than 7-8K. I don't see how this is not affordable when it's a co-op in case and not individual farmers themselves. This will be swifter, cut down on costs and also more transparent as many farmers might not have bank account of their own but can have their own wallets, with wallet file being stored on a cheap pen drive.

[Benson Samuel]

Today, these farmers have bank account with a debit card and everyone holds a mobile phone (a basic one).

1. Can something be worked out of this or do you thing the additional device (be it a simple android device) is essential .

@benson Most of them do not engage in on-line banking, they use banks to get paid, ATMs to withdraw and Paper cash to spend.
And Banking regulations don't seem to affect farmers much. I think the idea of a "community center" will lead to something similar to a co-operative bank.

Online banking will make its mark across villages from 2014 - 2015. This WILL happen as there is a RBI mandate for any banks with 4 or more branches to open one in a rural area.
Financial inclusion cannot be profitable to a bank unless they tap into the 'online banking' space.

But subvolatil also has a similar vision to mine. I do believe that wallets will be a pure hardware device rather than a phone or any other form factor. Unless, there is a sub 1K smartphone that comes along.

[dashingriddler]

I have been working to create a framework of how this can be attempted.
1. stats say there is 41% of population without bank accounts. banking the unbanked has been a challenge. rbi plans to force nationalized banks to open one branch in rural area for every 4 branches in urban area which will make the banks suffer due to lack of business in rural area.
2. in villages, trust on small pety savings is not a huge issue. usually people know each other in villages since a couple of decades.
3. A basic mobile set atleast is accessible by adult villages - at least the head of the home will be able to
4. Mobile recharge guy and medical store guy are the easily accessible people in village who can read and understand english and also have some technical knowledge. these guys can be the middle men
5. based on the above, the idea is to get a book printed which will have two fields on top of every page where the name and mobile number can be written and then there will be a QR code of the bicoin address unique for every villager.
6. every evening the middle men check all the bitcoin account balances/deposits and informs the villages personally or through sms, send the bitcoins out of accounts as per the villager instructions, also provide the present INR value of the balance. The villages can also pay inr to the middle men and have the equivalent btc deposited to their address. All these will be done manually at earlier stage.
7. the middlemen will maintain an account with any of the india based trading or exchange website and can convert the bitcoins to INR when needed. if there can be enough volume, this middle men itself will become a trader and may be able to avoid buying or selling of bitcoins regularly and just do once a few weeks.
8. After enough volume is recognized, there is also a possibility to create a low cost teller machine that can be employed at middle men and that middle men will be operating it to make the transactions faster on behalf of villager.

The present idea is to adopt the manual system in a couple of mid-sized villages to see the response.
i am ofcourse open to suggestions..

[Benson Samuel]

I have been working to create a framework of how this can be attempted.
1. stats say there is 41% of population without bank accounts. banking the unbanked has been a challenge. rbi plans to force nationalized banks to open one branch in rural area for every 4 branches in urban area which will make the banks suffer due to lack of business in rural area.
2. in villages, trust on small pety savings is not a huge issue. usually people know each other in villages since a couple of decades.
3. A basic mobile set atleast is accessible by adult villages - at least the head of the home will be able to
4. Mobile recharge guy and medical store guy are the easily accessible people in village who can read and understand english and also have some technical knowledge. these guys can be the middle men
5. based on the above, the idea is to get a book printed which will have two fields on top of every page where the name and mobile number can be written and then there will be a QR code of the bicoin address unique for every villager.
6. every evening the middle men check all the bitcoin account balances/deposits and informs the villages personally or through sms, send the bitcoins out of accounts as per the villager instructions, also provide the present INR value of the balance. The villages can also pay inr to the middle men and have the equivalent btc deposited to their address. All these will be done manually at earlier stage.
7. the middlemen will maintain an account with any of the india based trading or exchange website and can convert the bitcoins to INR when needed. if there can be enough volume, this middle men itself will become a trader and may be able to avoid buying or selling of bitcoins regularly and just do once a few weeks.
8. After enough volume is recognized, there is also a possibility to create a low cost teller machine that can be employed at middle men and that middle men will be operating it to make the transactions faster on behalf of villager.

The present idea is to adopt the manual system in a couple of mid-sized villages to see the response.
i am ofcourse open to suggestions..

How you do you fix volatility for them?
Isn't this the same as a bank?
Wouldn't the middleman need transaction fees/ anti-corruption incentives?

Suggestion: Look at creating a processor service for villages rather than letting them handle volatility.

[johba]

Hi guys,

I'm working on the same issue with www.37coins.com. The solution is based on a gateway app that translates between internet and SMS, and certain security measures, to cover the shortcomings of the GSM network.

The idea is to recruit a local person who takes care of a dedicated android device and keeps it connected to the internet. There are revenue channels like transaction fee and exchange fee for the gateways operator as an incentive. everyone can open a wallet by sending an SMS to the gateway number, no internet or smartphone required at any time.

There are about 7 countries online, pick yours and simply send a text to the number on the front page. If your country is not online, please start a gateway

also check out the github repo: https://github.com/Btc4All/37coins/tree/master/server/src/main/resources  and contribute a resource bundle.

[dashingriddler]

I have been working to create a framework of how this can be attempted.
1. stats say there is 41% of population without bank accounts. banking the unbanked has been a challenge. rbi plans to force nationalized banks to open one branch in rural area for every 4 branches in urban area which will make the banks suffer due to lack of business in rural area.
2. in villages, trust on small pety savings is not a huge issue. usually people know each other in villages since a couple of decades.
3. A basic mobile set atleast is accessible by adult villages - at least the head of the home will be able to
4. Mobile recharge guy and medical store guy are the easily accessible people in village who can read and understand english and also have some technical knowledge. these guys can be the middle men
5. based on the above, the idea is to get a book printed which will have two fields on top of every page where the name and mobile number can be written and then there will be a QR code of the bicoin address unique for every villager.
6. every evening the middle men check all the bitcoin account balances/deposits and informs the villages personally or through sms, send the bitcoins out of accounts as per the villager instructions, also provide the present INR value of the balance. The villages can also pay inr to the middle men and have the equivalent btc deposited to their address. All these will be done manually at earlier stage.
7. the middlemen will maintain an account with any of the india based trading or exchange website and can convert the bitcoins to INR when needed. if there can be enough volume, this middle men itself will become a trader and may be able to avoid buying or selling of bitcoins regularly and just do once a few weeks.
8. After enough volume is recognized, there is also a possibility to create a low cost teller machine that can be employed at middle men and that middle men will be operating it to make the transactions faster on behalf of villager.

The present idea is to adopt the manual system in a couple of mid-sized villages to see the response.
i am ofcourse open to suggestions..

How you do you fix volatility for them?
Isn't this the same as a bank?
Wouldn't the middleman need transaction fees/ anti-corruption incentives?

Suggestion: Look at creating a processor service for villages rather than letting them handle volatility.

Volatility problem is not fixed and is not an attempt here either. But people are not really doing trading with bitcoin.
Yes similar to bank but does not have expenses that is as much associated to run a bank in a village.
Incentive is the conversion charges fee on both sides.

I did not understand what exactly processor service means. Did you mean an automated service instead of manual one i am trying to suggest? A link explaining it or a small explanation would be helpful.

[abhay81]

We're in the financial market, bitcoin penetration in rural India needs to extract additional value to be a fruitful venture.

The value proposition needs to be financial.

Currently international money transfer is cheap through bitcoins, a new distribution model that supplies from the farms to international markets would be required but like the conventional food trade trust needs to be gained, this could be done by using skype and connecting through the bitcoin community.

Check out the post on Bitcoin International Partnerships.

The Idea could be used to get the farmers better prices.

[Fernandez]

More importantly, why do we want Bitcoins to be popular in rural India?

We have bigger problems and issues to tackle as it is. I fail to see how Bitcoin helps with any of those.

[Benson Samuel]

More importantly, why do we want Bitcoins to be popular in rural India?

We have bigger problems and issues to tackle as it is. I fail to see how Bitcoin helps with any of those.

That is where the buck stops.
If you can enable the cow owner to sell milk for Bitcoin and someone to sell him rice, wheat and booze, the loop is complete.

While there may be bigger issues at hand, financial independence is pretty huge and the best part of this is that it is already available. The larger issues will take time and some of them do not even have a solution as yet.

[Fernandez]

More importantly, why do we want Bitcoins to be popular in rural India?

We have bigger problems and issues to tackle as it is. I fail to see how Bitcoin helps with any of those.

That is where the buck stops.
If you can enable the cow owner to sell milk for Bitcoin and someone to sell him rice, wheat and booze, the loop is complete.

While there may be bigger issues at hand, financial independence is pretty huge and the best part of this is that it is already available. The larger issues will take time and some of them do not even have a solution as yet.

Thats my issue. I don't see how Bitcoin helps the farmers as opposed to Gandhi cash?

Btw, I have farmed rice and mustard, but not booze

[Benson Samuel]

More importantly, why do we want Bitcoins to be popular in rural India?

We have bigger problems and issues to tackle as it is. I fail to see how Bitcoin helps with any of those.

That is where the buck stops.
If you can enable the cow owner to sell milk for Bitcoin and someone to sell him rice, wheat and booze, the loop is complete.

While there may be bigger issues at hand, financial independence is pretty huge and the best part of this is that it is already available. The larger issues will take time and some of them do not even have a solution as yet.

Thats my issue. I don't see how Bitcoin helps the farmers as opposed to Gandhi cash?

Btw, I have farmed rice and mustard, but not booze

A short case study would be something happening near Kanakapura where a village has started to sell cow based products (milk, excrement  based meds, etc). Due to FDA norms, there is no way for them to certify/ distribute/ get paid for their product.
These are meds that they have used for several hundred years successfully but cannot outbudget alopathy marketing.

Villages and farmers need to be introduced to future trends like Bitcoin as it enables a new line of thinking and innovation.

How do you get that kind of flexibility with the rupee?

I know a farmer who brews his own
Happen to wet my beak with that treat every time am in Kerala

[BTCIndia]

Like dic*(Bitcoin) penetrates vagi**(Rural India).
Only with their wish, I mean rural wish.

[btcxindia]

To solve this problem , we are planing to conduct Crypto Hackathon in Hyderabad partner with premier technology/research institute.

The proposed title is " India's unbanking- Bitcoin is the solution"   (note:please suggest a better tiitle)

We will call technocrats across all IIT's and IIIT's and NIT's .Let them design some product on this.

I registered the web   cryptohackathon.com and cryptohackathon.in

Suggestions/comments are welcome.

[TrailingComet]

It's going to need PSu bank buy-in in some form to piggybank on their reach
That's why sensible regulation is so critical

[EternalWingsofGod]

Today I met with a head of a Organic farming co-operative initiative in Tamil Nadu and was trying to see how bitcoins can fit into the picture.

I was focused on two things
1. To encourage distribution of bitcoins
2. To encourage people transact with bitcoins

So I asked them if they could issue a very small portion of the profit (say 0.5%) as bitcoins?
They were willing to experiment.

As I was discussing how money can easily be transferred across wallets. The fundamental question was
1. Most of the people in villages do not have access to internet or smart phones. So how are these people going to hold or transact in bitcoins?

So are bitcoins only for literates with a understanding of technology and who hold sophisticated gadgets ?

Maybe an idea like 37coins coins as johba pointed out would work best
It can be stored on dumb phone people incentivized to use it with commissions
https://www.37coins.com/

Just one idea though paper wallets would be nice as well but mobile phones seems most logical.

Thats my issue. I don't see how Bitcoin helps the farmers as opposed to Gandhi cash?

It has utility I think
http://bitcoinfilm.org/documentaries/ in Uganda one for Argentina and farmers as well