How the Porn Industry Changed During Coronavirus, With Performers Wary of Bitcoin

Leah Callon-Butler, a CoinDesk columnist, is the director of Emfarsis, a consulting firm that focuses on the role of technology in promoting economic development in Asia.
When Chef Bagus closed the doors to his restaurant in the Balinese resort of Kuta, the only thing left in the kitchen was the characteristic aroma of his world-famous BBQ ribs.
With Indonesia's usual influx of cash-loving and Instagram-biting tourists who were almost dry due to global travel restrictions, the chef and his crew emptied the cooler, cleared the shelves and cooked the last ingredients. Then they immediately donated the food - a total of about 150 boxes - to a local charity that distributed meals to the needy. That was at the end of February and since then the chef's 32-strong crew has been sitting at home in Bali, waiting for the green light to go back to work.
With more than 75% of Bali's GDP coming from tourism, the fallout of COVID-19 was brutal for the locals. Out of order until further notice. Despite the enormous financial losses he has suffered in the past few months, the chef has put his energy and money into buying and assembling packages of eggs, noodles and rice that are personally delivered to poor families in the Kuta region should.
See also: Leah Callon-Butler - To see the potential of the Libra, look at the Philippines, not the United States
"I believe in karma," says the chef with a smile. "Helping others in this situation is good for them and also for us," he explains with deep conviction. His optimism is contagious.
I first heard of Chef Bagus when I received a random text message from my mother asking if it was "safe" to transfer $ 10 to his Balinese bank account. For sure? Probably yes. But cheap? Eh, no. Mom didn't have a habit of sending small tenders across borders, so she almost fell off her chair when I told her the bank would charge a $ 10 fee to send a $ 10 amount from Australia to Indonesia.
Related topics: An Indonesian chef and the referral industry's $ 554 billion problem
This is a problem for anyone who wants to send small amounts of money overseas. it is prohibitively expensive to do so. The cross-border payment system is very complex and the money goes through many hands - everyone takes a clip - before they reach their intended destination.
The exorbitant cost of sending a large number of tiny, uncoordinated transactions destroyed the value of doing anything at all
The exorbitant cost of sending a large number of tiny, uncoordinated transactions destroyed the value of doing anything at all
Extensive due diligence is also required to ensure that the funds do not allow illegal activities, with serious consequences for those who fail to recognize and do not respond to red flags. Because unfortunately not everyone sends cash with altruistic intentions. Just ask Brian Hartzer, Westpac's chief bank officer, who resigned last year because of the bank's role in Australia's biggest money laundering scandal.
Through a bank-to-bank system called LitePay, which allows consumers to transfer small amounts of money to one another, Australian regulators found that repeated payments were made to a person in the Philippines who was later arrested for child trafficking and exploitation.
I explain everything to my mother via video call and can see that she is both horrified and at a loss. Why did I tell her this nightmarish stuff when she only wanted Chef Bagus to send $ 10 for a copy of his BBQ Ribs recipe and a place in his virtual cooking class?
The idea of ​​becoming virtual came about when a group of the chef's biggest fans gathered on his Facebook page to request the recipe for his signature BBQ sauce. The chef's sweet and sticky BBQ glaze, a culinary original of his own creation, had achieved cult status among Kuta's worldwide visitors. And now that the holidays have been canceled, they have been locked up at home, bored, and suffered from a severe case of Bali withdrawal syndrome.
Therefore, the chef suggested holding his top-class cooking classes online - one of Bali's main attractions - and using the proceeds to fund his local aid efforts. Suddenly he had hundreds of homesick homes that tried to donate. They were just as excited to cook with the chef from home as they were to give something back to the beach community who had enjoyed them so much in better times.
But the exorbitant cost of sending a large number of tiny, uncoordinated transactions has nullified the value of doing anything at all.
So Heather - a Melbourne woman who had visited Bali ten times in the 14 months before the pre-coronavirus appeared - came up with a workaround. All Aussies wishing to pay Chef Bagus can deposit into their local bank account. Then, every Friday, she passed the earnings along with a report to the chef's bank account in Bali to match her bank statement with his registration list.
With a remittance app that charged a $ 4 fee for individual transactions, Heather and Chef decided that it made sense to pool donations and make the remittance once a week. This is a common practice among people who want to avoid the disproportionate cost of sending a small amount of money overseas and want to increase the value of a single transfer, e.g. For example, migrant workers who bundle their money together before sending it home to relatives. Therefore, the chef Heathers confirmed bank details to the Facebook group and the money flowed in. The first transfer was a resounding success, totaling $ 1,020 from 51 Australian donors (the donation requested was only $ 10, but many voluntarily paid more).
Inspired by the dynamic, Heather offered to do the same for others in Bali. Like the popular local cover band Justin n 'Friends, who had started working online for their global fan base. With the usual venues that were closed during the coronavirus crisis, the group found a new home for "life streaming" via Facebook Live. Virtual concert goers publish their song requests in the chat function and send a tip via Heather's bank account if they so wish.
But not everyone in Bali has a product or service that is suitable for a digital linchpin. Like Heather's personal driver, for example. With the advent of COVID-19 and the knowledge that he and his family were struggling through the tourist drought, Heather asked her driver not to cause stress. She happily increased the usual amount that she personally sent to Bali every month. For Heather, this is an emotional transaction. Transfers are more than just money, they represent friendship, family and hope for the future.
Global transfers are one of the world's largest sources of development finance. According to the World Bank, record numbers of $ 554 billion were transferred to low- and middle-income countries in 2019, three times more than official development aid.
Money has a profound impact on the quality of life of some of the most vulnerable groups in the world by fighting poverty and hunger, increasing disposable income and taking health and wellbeing into account. Education and entrepreneurship are also often at the top of the funding agenda and offer opportunities to break the cycle of inequality.
The United Nations Sustainable Development Goals aim to reduce the average transfer cost to less than 3 percent of the transaction. With the current global average still at 6.9 percent to send $ 200, we need to do some serious work.
With global transfers expected to decrease by up to 20 percent this year, mainly due to lower wages for migrant workers and job losses, finding solutions is even more important. The global block has made it increasingly difficult to carry physical money around the world, with devastating consequences for any country where vulnerable households rely on sending money home.
For the remaining 1.7 billion “without bank details”, mainly in emerging markets, there must be a physical point at the final destination where the money can be withdrawn. The money transfer companies that fill this gap cause high costs, including rent, employee salaries, commissions to local agents, and so on. These costs are inevitably transferred to the customer.
There is also a tendency for options to be lacking, as large money transfer companies like Western Union and MoneyGram are able to make exclusive distribution agreements through post offices, convenience stores, pawnshops, and the like. In this way, they protect their high price premiums by preventing smaller challenger companies from entering the market.
This partially explains the proliferation of informal channels, with many choosing to trust friends, family, or another traveler - possibly a complete stranger - to physically move the money. Yes, this method is risky, but some have no other option. They may not have sufficient ID to pass the due diligence required by the money transfer companies.
Maybe they have the status of irregular migrants. Maybe they don't even know that they're using an informal system. If it were possible to measure these movements of money, it is estimated that the actual value of global transfers could be twice the officially reported value.
At this point, I know what you think: if there were only a decentralized electronic money system for peer-to-peer payments that is inherently cross-border and could offer both transaction transparency, data protection and self-reliance, sovereign identity for users.
Those who crack it will tap into the largest underserved segment in the world.
Those who crack it will tap into the largest underserved segment in the world.
The OECD had the same idea in a 2020 report on the subject, which identified blockchain technology as a possible solution to solving the cost and trust issues associated with global transfers. Blockchain removes the middleman from the equation and promotes transparency across transactions, which enables more efficient and cost-effective due diligence procedures.
Even MoneyGram, the most traditional money transfer company, entered the blockchain in mid-2019 to work with Ripple and revolutionize cross-border payments and foreign exchange processing using Ripple's digital XRP currency. And recently it was reported that archrival Western Union made an offer to acquire MoneyGram.
However, the OECD recognizes that blockchain is a relatively new technology and that the entire industry is at an early stage of development and that politics and regulation are still taking shape.
Maybe that's why Chef and Justin have never heard of blockchain and Heather assumes Bitcoin is a scam. Still, I think they "understand" the use case better than most, and Heather's desire to choose and control where their money goes - instead of sending money to a registered charity and trusting that they are fair distribute - largely matches the ethos of the blockchain community regarding the benefits of disintermediation.
Cross-border micro-payments are still a mystery to be solved, and the current global crises could be the catalyst needed to awaken (and open up) new ways of thinking about how we transfer value between parties and countries for the scale in Indonesia). It has been difficult to strike a balance between empowerment and consumer protection, with strict regulations increasing the cost of care for poorer sections of the population and creating barriers to participation, but this does not have to limit remittances to the hard basket. Those who crack it will tap into the largest underserved segment in the world.
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