In all the excitement of the latest cryptocurrency bull run—Tesla buying Bitcoin, Ethereum hitting all-time highs, Snoop Doge—it’s easy to overlook what makes the technology underpinning all this newfound loot so exciting. Mostly people just want to talk about the big price movements. And space shuttle cartoons.
(Not that I’m against price talk.Wheee!)
But real innovators are out there tackling hard problems using blockchain tech, even if their efforts are attracting less attention. One of those innovators is Celo, a four-year-old project that’s building a phone-based payments system primarily for “unbanked” people, those who don’t have easy access to the global financial system. Unlike many of the fly-by-night “coin offerings” that proliferated during the great ICO bubble of 2017, Celo has forged on and made inroads into a stubbornly knotty quandary: Cross-border remittances.
Even in normal times, sending money abroad poses a challenge. Non-profit groups often resort to mailing prepaid cards or cash-stuffed envelopes to people in need—a slow, wasteful, sometimes dangerous, and altogether inefficient status quo. During the pandemic, the problem has been further compounded by heightened economic need and, simultaneously, limited physical interaction.
Last year cLabs, the San Francisco-based company behind Celo, partnered with the Grameen Foundation, a Washington, D.C.-based poverty-fighting group, to provide hundreds of thousands of dollars of COVID relief to thousands of women entrepreneurs in the Philippines. The pilot program taught people to receive and send money—for a less than a penny per transaction—using a cellphone app called Valora. You wouldn’t even know that a blockchain, originally adapted from Ethereum’s software code, underpins the system.
(Valora became available for the broader public to download on Wednesday; though when tried to sign up on my iPhone, the app got stuck on the phone number verification screen.)
Rene Reinsberg, Celo’s cofounder and a former GoDaddy exec and MIT researcher, tells me he has high expectations for the platform’s growth, even if it has little name recognition today. The project is “tapping into the largest social network out there, which is the collection of people’s contact lists right on their phones,” he says. The number of smartphone subscribers worldwide is expected to grow to 7.5 billion by 2025, covering much of the world, he notes.
Celo said Wednesday that it raised $20 million from the likes of Andreessen Horowitz and other venture capital firms who see the potential too. The cash injection boosts the project’s total funding to $65 million. Earlier raises included backers such as Twitter and Square CEO Jack Dorsey, LinkedIn cofounder and PayPal mafioso Reid Hoffman, and Coinbase Ventures.
Morgan Beller, cofounder of Facebook’s embattled cryptocurrency project, formerly called Libra and since rebranded as Diem, recently joined Celo as an advisor. The appointment of Beller, who is now a partner at the early-stage venture capital firm NFX, is notable, not least because her earlier venture obviously competes with this one. (“I see them as an ‘and’ not an ‘or,’” Beller tells me, meaning she believes they can coexist.)
What does Beller see in Celo? For one thing, it’s the emphasis on problem-solving. “A lot of projects in the crypto world sometimes feel like crypto for crypto’s sake—running around with a hammer in search of a nail, or trying to fit a square peg in a round hole, or whatever analogy you want to use,” Beller says.
Celo is, on the other hand, “not necessarily a crypto company,” at least not for the end consumer, she says, “It’s like, we’re just gonna help you solve ‘X.’ You don’t really need to know how it’s happening. I think that that approach is right.”
The recently reignited crypto craze is exciting, sure; but what’s really exciting is what comes after the craze dies down. To quote another great innovator, “If you get it right, a few years after a surprising invention, the new thing has become normal. People yawn. And that yawn is the greatest compliment an inventor can receive.”
One day, we’ll all yawn about blockchain.