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> Instead, she takes out her phone and texts a password and a request for money. How many times do people need to be told that their assumptions about mobile p

by bArray 5y ago

> Instead, she takes out her phone and texts a password and a request for money. How many times do people need to be told that their assumptions about mobile phones and security are completely wrong. Phone numbers can be reallocated (sim jacking), all communications can be intercepted (by design), smart phones are not themselves secure - especially an older/cheaper phone. > A few minutes later, she meets a man with a cellphone and receives cash from him [..] I imagine there being some issue with meeting random strangers. > Agents function like an ATM: You go up to them and give them cash to get money deposited in your mobile money account, or transfer money out of your account to get cash. This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull? In general I think that whilst on the surface this system seems great, it actually makes an incredibly vulnerable group of people even more vulnerable. (Slightly less related, but still worth discussion.) If you think being "unbanked" is only a problem for less-developed Countries... What if the reason you don't have a bank account is because the government froze your account due to you supporting a peaceful protest [1]? What if your government decides your social credit score is too low to allow you to have financial services [2]? [1] https://www.cbc.ca/news/politics/ottawa-protests-frozen-bank-accounts-1.6355396 https://www.cbc.ca/news/politics/ottawa-protests-frozen-bank... [2] https://nhglobalpartners.com/china-social-credit-system-explained/ https://nhglobalpartners.com/china-social-credit-system-expl...

friedturkey 5y ago
Justice in these countries isn't quite the same as what you're used to. In, say, America or Western Europe, you'll call the cops and they'll say "uh huh okay" and you'll just have to hope they'll launch an investigation. ATM skimmers are a common problem and basically jack shit is done about them. Muggings still happen and people aren't often caught. In poorer countries, especially ones where basic infrastructure like banking is inaccessible, often it's easier to just tell a neighbor what happened. The community will go out and "get justice" on your behalf. I'd honestly feel much safer stealing a whole paycheck in the US than I'd feel trying to steal a dollar in Kenya. Scams are still happening, but the risk is much higher if you're caught hurting someone from your community.
- bawolff 5y ago
  > The community will go out and "get justice" on your behalf. Works great until the person who steals something is well liked enough or scary enough that the community doesn't want anything to do with it.
  - marcellus23 5y ago
    Same thing happens with cops though.
  - brokenmachine 5y ago
    Or if they're mistaken about who the culprit was.
- kkielhofner 5y ago
  I have a friend from a developing country. One night someone broke in to their house and stole a high value item (maybe $2K US). The next day they reported it to the police. The police indicated they knew who it was. A few days later the perpetrator was found shot to death. It was well understood by everyone in the family and community that the police just went out and "handled it". My guess is the cops essentially thought "Come on, not this guy again" and summarily executed him. From what I understood they left his body in a pretty visible place - obviously to send a message. Another friend (from a different developing country) casually tells stories of bribing cops. When I acted surprised at first he said "The United States is the only country I've been to where bribing the cops isn't cool". As you say - justice in these countries isn't quite the same as what many of us are used to.
  - pinephoneguy 5y ago
jpswade 5y ago
Cash is only as safe as the device you hold it in.
bawolff 5y ago
> What if the reason you don't have a bank account is because the government froze your account due to you supporting a peaceful protest Not to get off topic, but the protest was not peaceful, and donating to people who are openly calling for the overthrow of the government is likely to get you in trouble with said government. Regardless, the bank account freezes are temporary as far as i understand (emergency act expires in 30 days) so really not the same thing.
davchana 5y ago
The local man is not any bank. He is more a converter of digital money to hard cash. Lets say the woman asks his bank app to withdraw X amount. Bank app will say go to this (or nearest) man and give him this code. Man gets the code, enters in his side of app, and sees the digital money in account, gives the hard cash. He does same in reverse for others who want to deposit money. At any point, maybe daily or weekly he either puts excessive cash in bank branch, or gets cash from bank branch. Note that app is not any phone app, its more like USSD codes and or SMS banking. The man acts like a human atm, and money & kyc details are with bank or operator. Airtel mobile company used to operate M-pesa in 2007 when I was there. Basically assume if ATT opens a mobile banking division, with just USSD & SMS codes.
- TremendousJudge 5y ago
  >like a human atm If only there was a word for this concept
  - davchana 5y ago
    I mean, yes, a teller. But a traditional teller is more like employee of a bank. A stand alone atm machine has more resemblance. This man will have a place/shop already, like tire repair, tea/snacks, mobile repair, clothes shop etc; & then Airtel asked them to be their M-pesa agents, as a side business.
mschuster91 5y ago
> How many times do people need to be told that their assumptions about mobile phones and security are completely wrong. Phone numbers can be reallocated (sim jacking), all communications can be intercepted (by design), smart phones are not themselves secure - especially an older/cheaper phone. Would you go all that effort to steal a couple dozen dollars? No. The amount of money to be stolen is simply too low to make fraud worth the effort. We're talking about poor farmers in rural areas of Kenya, not Western Bitcoin millionaires. > This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull? The local agent is not a bank, they are an agent. If the agent pulls the rug on you (which, again, would be unwise of the agent given that the amount of money is so low), you either complain at M-Pesa or you round up a couple neighbors and rough up the agent.
nickmancol 5y ago
"This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull?" I think that a system that encourages trust among people is orders of magnitude better than the traditional banking. https://ourworldindata.org/trust https://ourworldindata.org/trust
jacquesm 5y ago
It is the agents that require trust: they are known to hold some currency and receive all kinds of visitors. Agents that screw their community don't tend to be agents for long, and you can take that any way you want.
Aurelius3 5y ago
>This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull? Isn't the entire banking infrastructure based upon social trust? I'm confused at how you can say crypto requires alot of trust yet traditional banking does not... One is based upon mathematical principles, the other on social ones. Of course traditional banking is large and well supported, but it is still inherently a social system which requires trust.
- cyber_kinetist 5y ago
  Even cryptocurrencies (Bitcoin, Ethereum, etc.) uses social trust when crises happen. You occasionally see forks being made when a major scam or attack has happened and most people agree that rewriting (or maybe recreating might be a better term) the history of the blockchain is acceptable. The mathematical principles that crypto uses is ultimately just a tool to mediate human interactions. There is nothing that is set in stone; if enough people developing the block chain agrees there can always be a change of the rules and protocols of the system. You see it less with Bitcoin (which is very conservative about changing things) and more with Ethereum (which is more prone to do experiments and changes). But the potential for change is always there. So one of the major problems I with most cryptocurrencies is about off-chain governance: that how decisions are made related to the rules of the system is incredibly opaque. How does consensus get reached among cryptocurrency developers? Is there enough communication between developers and the people using the currency, so the users can understand what are the effects of changes that are made in the system? Can users voice about concerns about the system and have the ability to change what developers do? At least Ethereum does have some formal processes on how people can submit proposals to changing the VM, but there is still a significant gap between technical contributions and the more pragmatic concerns ordinary users might have (e.x. about deflation or the POW/POS debate).

by bArray 5y ago

friedturkey 5y ago

Justice in these countries isn't quite the same as what you're used to. In, say, America or Western Europe, you'll call the cops and they'll say "uh huh okay" and you'll just have to hope they'll launch an investigation. ATM skimmers are a common problem and basically jack shit is done about them. Muggings still happen and people aren't often caught. In poorer countries, especially ones where basic infrastructure like banking is inaccessible, often it's easier to just tell a neighbor what happened. The community will go out and "get justice" on your behalf. I'd honestly feel much safer stealing a whole paycheck in the US than I'd feel trying to steal a dollar in Kenya. Scams are still happening, but the risk is much higher if you're caught hurting someone from your community.

bawolff 5y ago
> The community will go out and "get justice" on your behalf. Works great until the person who steals something is well liked enough or scary enough that the community doesn't want anything to do with it.
- marcellus23 5y ago
  Same thing happens with cops though.
- brokenmachine 5y ago
  Or if they're mistaken about who the culprit was.
kkielhofner 5y ago
I have a friend from a developing country. One night someone broke in to their house and stole a high value item (maybe $2K US). The next day they reported it to the police. The police indicated they knew who it was. A few days later the perpetrator was found shot to death. It was well understood by everyone in the family and community that the police just went out and "handled it". My guess is the cops essentially thought "Come on, not this guy again" and summarily executed him. From what I understood they left his body in a pretty visible place - obviously to send a message. Another friend (from a different developing country) casually tells stories of bribing cops. When I acted surprised at first he said "The United States is the only country I've been to where bribing the cops isn't cool". As you say - justice in these countries isn't quite the same as what many of us are used to.
- pinephoneguy 5y ago

jpswade 5y ago

Cash is only as safe as the device you hold it in.

bawolff 5y ago

> What if the reason you don't have a bank account is because the government froze your account due to you supporting a peaceful protest Not to get off topic, but the protest was not peaceful, and donating to people who are openly calling for the overthrow of the government is likely to get you in trouble with said government. Regardless, the bank account freezes are temporary as far as i understand (emergency act expires in 30 days) so really not the same thing.

davchana 5y ago

The local man is not any bank. He is more a converter of digital money to hard cash. Lets say the woman asks his bank app to withdraw X amount. Bank app will say go to this (or nearest) man and give him this code. Man gets the code, enters in his side of app, and sees the digital money in account, gives the hard cash. He does same in reverse for others who want to deposit money. At any point, maybe daily or weekly he either puts excessive cash in bank branch, or gets cash from bank branch. Note that app is not any phone app, its more like USSD codes and or SMS banking. The man acts like a human atm, and money & kyc details are with bank or operator. Airtel mobile company used to operate M-pesa in 2007 when I was there. Basically assume if ATT opens a mobile banking division, with just USSD & SMS codes.

TremendousJudge 5y ago
>like a human atm If only there was a word for this concept
- davchana 5y ago
  I mean, yes, a teller. But a traditional teller is more like employee of a bank. A stand alone atm machine has more resemblance. This man will have a place/shop already, like tire repair, tea/snacks, mobile repair, clothes shop etc; & then Airtel asked them to be their M-pesa agents, as a side business.

mschuster91 5y ago

> How many times do people need to be told that their assumptions about mobile phones and security are completely wrong. Phone numbers can be reallocated (sim jacking), all communications can be intercepted (by design), smart phones are not themselves secure - especially an older/cheaper phone. Would you go all that effort to steal a couple dozen dollars? No. The amount of money to be stolen is simply too low to make fraud worth the effort. We're talking about poor farmers in rural areas of Kenya, not Western Bitcoin millionaires. > This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull? The local agent is not a bank, they are an agent. If the agent pulls the rug on you (which, again, would be unwise of the agent given that the amount of money is so low), you either complain at M-Pesa or you round up a couple neighbors and rough up the agent.

nickmancol 5y ago

"This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull?" I think that a system that encourages trust among people is orders of magnitude better than the traditional banking. https://ourworldindata.org/trust https://ourworldindata.org/trust

jacquesm 5y ago

It is the agents that require trust: they are known to hold some currency and receive all kinds of visitors. Agents that screw their community don't tend to be agents for long, and you can take that any way you want.

Aurelius3 5y ago

>This requires a lot of trust. The entire point of having banking infrastructure is to remove the need for trust. Like crypto, with no oversight, how do you know your local 'phone bank' is not a rug-pull? Isn't the entire banking infrastructure based upon social trust? I'm confused at how you can say crypto requires alot of trust yet traditional banking does not... One is based upon mathematical principles, the other on social ones. Of course traditional banking is large and well supported, but it is still inherently a social system which requires trust.

cyber_kinetist 5y ago
Even cryptocurrencies (Bitcoin, Ethereum, etc.) uses social trust when crises happen. You occasionally see forks being made when a major scam or attack has happened and most people agree that rewriting (or maybe recreating might be a better term) the history of the blockchain is acceptable. The mathematical principles that crypto uses is ultimately just a tool to mediate human interactions. There is nothing that is set in stone; if enough people developing the block chain agrees there can always be a change of the rules and protocols of the system. You see it less with Bitcoin (which is very conservative about changing things) and more with Ethereum (which is more prone to do experiments and changes). But the potential for change is always there. So one of the major problems I with most cryptocurrencies is about off-chain governance: that how decisions are made related to the rules of the system is incredibly opaque. How does consensus get reached among cryptocurrency developers? Is there enough communication between developers and the people using the currency, so the users can understand what are the effects of changes that are made in the system? Can users voice about concerns about the system and have the ability to change what developers do? At least Ethereum does have some formal processes on how people can submit proposals to changing the VM, but there is still a significant gap between technical contributions and the more pragmatic concerns ordinary users might have (e.x. about deflation or the POW/POS debate).