Organize off-chain events like a pro

The problem description

What good is a blockchain? The original one, bitcoin, offers a means to "transfer value" between people without intermediaries - in other words, to "pay".

Since bitcoin took off, many other blockchains have appeared and added other functionalities, but all public permissionless ones have kept the orginal bitcoin functionality: they have a native asset (a "cryptocurrency") which can be transfered between addresses. If two or more people

1. take control of an address each, and
2. somehow get their hands on that "cryptocurrency", and if
3. that cryptocurrency has a fiat currency value ...

... then that blockchain can support "payments" (for goods or services) in the classical sense.

Because there are so many blockchains offering so many interesting functionalities, many people got attracted to this new universe and became passionate. In many places, they formed formal or less-formal groups of like-minded individuals, organized as non-profits and started meeting in real life ... or, as some call it "off-chain".

In Luxembourg there used to be only one such association, "LetzBlock", created mostly by lawyers and "professional services" guys, of which I am still a member (despite a pretty steep membership fee of 100€/year).

More recently, a global association, OffChain established a Luxembourg chapter and yesterday, they organized the second social event at the Piri Piri portuguese restaurant in Kirchberg.

As Offchain seems not to have an own budget (there's no membership fee as far as I can tell ...), everybody was expected to pay for their own drinks (and food, for those who ordered food). But since during the event people were free to arrive and leave whenever they wanted, the inevitable occured: the last one of the group to leave had to pick up the tab of someone who had left earlier and forgot to pay ... Embarrassing ...

Passionate about blockchain, I'm fast to spot occasions where a blockchain could improve (ever so slightly) a situation - or at least make it more hip 😄

This looked to me as definitely one of those situations. Although blockchain is conceptually linked to "decentralization", the above situation illustrated why centralization is often more efficient ... As a way of functioning, it can be argued that such an embarrassing situation would not have occured if the attendants had payed OffChain (before or after) and the organizer would have picked up the tab for everybody.

Of course this can be done without a blockchain, using our modern payment infrastructures. In the classical banking world, it would have been cumbersome but a number of "fintechs" are offering streamlined "split the bill" processes, including Revolut and, in Luxembourg, payconiq

But we are talking here of people passionate about blockchain, the technology that is supposed to disrupt finance! If we don't use blockchain for what it was initially intended to do, how can we expect anybody else to do so?

Ok so let's see how could a blockchain process compete with Revolut or payconiq when it comes to solving the relatively simple "split the bill" problem?

Accounts

Revolut

Revolut is a sort of "neobank" - you need to open an account with them and transfer some funds to it. They make the process super easy, not asking bothersome KYC questions unless the sums involved become significant.

payconiq

payconiq expects users to have a bank account with one of the local retail banks and requires one to install the dedicated payconiq app of their bank. Considering the necessary configuration and authorisations, that's a pretty tall order if you haven't already done so. Payconiq did however manage to gain a foothold in Luxembourg, a significant part of the population has it and uses it. Past the initial cumbersome installation and configuration, using it is pretty convenient for doing "peer to peer" payments (involving a ton of intermediaries, but still).

Typical blockchain

With typical blockchains, one needs to install a wallet and then get some crypto into that wallet. How do you get the crypto ? Basically, you also need an account with a centralized exchange (CEx) to which you transfer fiat and trade it for crypto ... Considering that CEx-es have been cowed into introducing serious KYC checks, that becomes a bit complicated to do on the spot for a newbie, but here we are talking "blockchain afficionados", so I'd expect the vast majority, if not all the participants to already have at least one if not more accounts with CEx-es and some crypto on them.

I've written some time ago about one particular CEx+wallet, Crypto.com (which also offers credit cards)

Hive

Hive is a little known blockchain which emerged in early 2020 as a hard-fork of the much better known steem blockchain of Dan Larimer and Ned Scott _{(but currently of HE Justin Sun)}.

Hive is generally not supported by generic wallets. Jaxx Liberty, Trust and others I've tested over the years do not integrate support for steem nor its younger fork Hive. However Hive is interesting in this context as we'll see later.

Hive has its own dedicated wallets, among which I use Ecency, Hive Keychain and HiveWallet on mobile, and basically all of the light, web clients on the desktop.

The nice twist is that these can be used as web clients even on your mobile: just launch a browser, go to one of the websites such as PeakD log in and you can use the built-in wallet.

Of course, in order to "log in" you'll need a prior Hive address. On Ethereum for instance, well-known Metamask (and basically all the others) create one for you without much of a fuss. Things are a bit different with Hive: one of the reasons which make Hive interesting is that transactions on Hive are free. Which means that they cost the user zero, zilch, nada. You don't need to "pay for gas" (not even a tiny-little-bit like on BSC). Of course transactions have a cost though, and that cost is shouldered by the community. That's why Hive tries to make sure that you want to be part of the community.

So in order to create a Hive account, there's a bit of "work" to be done. If you want to sign up, you'll notice five providers are listed, three of which list a price for opening an account! Although quite low ($3 - 3,5€), it helps keep away "chancers", people who look to skim the network

However, two additional providers seem to offer free accounts, which I admit might be a bit confusing ... why would anyone pay (even if only $3) for something one could apparently also get for free ...?

The short answer: while you can always buy an account, free accounts are like 10€ Ryanair tickets: they are in (very) limited supply. I tried for you for this post and sure enough, the first service, hiveonboarding.com told me they are "out of stock" and that I should try again later

The second service, ecency has a more cryptic message ... "IP quality score is low" ...

... but the result is the same ... no account ! So what gives ?

To make a short story a bit longer, here's a "trick" I can offer to my readership in order to get a free Hive account:

1. Install the ecency app on your smartphone
2. Disconnect the WiFi (use mobile data instead)
3. Launch ecency app and sign up for free!
   
   

If you managed to get an account, consider this is the Hive equivalent of "proof of work"! 🤣

Is it harder than opening a Revolut account ? Can't say for sure.

It is definitely much easier than getting payconiq to work if you haven't done it yet.

The Offchain crowd is expected to have some crypto in a CEx which it can mobilize through a wallet. For those who do not yet, Hive is definitely easier than signing up with a CEx.

Putting a means of payment in the account

Revolut

As I said above, you'll need to transfer some money to your new Revolut account. One has to give it to them: they make that very easy.

payconiq

The big advantage with payconiq is that, at this point you could already use payconiq because it would be connected directly to one of your bank accounts, from which you can spend.

Typical blockchain

If you don't have something already in a CEx account, you'll need to jump through a lot of hoops to bring funds in your blockchain wallet.

Hive

I said Hive is interesting in several respects. One which gets me enthusiastic is that, unlike any other blockchain I know (except the older sister Steem), you can earn HIVE and HBD (the native cryptoassets of the Hive blockchain) with no capital outlay!

Although that cannot be done at short notice, it's still exceptional! You heard me right: if you can put in some effort over a certain period of time, you don't really need to buy Hive (unless you discover, like I did, that Hive is an excellent blockchain system) - you can earn it from the dApps!

There are now several "play to earn" (P2E) games such as Splinterlands and DeFi platforms where you can "yield-farm" such as Tribaldex_{(albeit you need initial capital there, like on typical blockchains)}, but the original dApps are those for blogging.

Id est, doing what I've done for you to be reading this now. Ecency, PeakD or LeoFinance are such platforms - the first two generic, the latter more specific for finance topics. In practice, someone like Jonathan could connect his finance-related blog with the Hive back-end or could use LeoFinance and, given his audience, I have no doubt he'd make bank like Taskmaster or better!

However, let's not get all over ourselves: such a thing cannot be done at short notice. If you want to use Hive to pay the same day when you created your account, you'd need to buy Hive. As it happens, I explained a while ago "How to buy Hive with euros" (using your credit card), courtesy of PeakD. The process is a bit protracted and fiddly, but still much easier than getting money on Binance, Crypto.com or Coinbase.

Removing the hurdles for paying with crypto

With Revolut and payconiq, you're all set by now, you use the highly complex yet invisible and well-performing traditional finance infrastructure and pay your euro bill with euros.

With crypto, you aren't done scratching your head yet.

Typical blockchain

The main issues with a typical blockchain are

1. the volatility of the cryptocurrency
2. the transaction fees

The first one is relatively easy to solve: you need to use a stablecoin. So after you've got some funds in your CEx account, you purchase some USDT or USDC _{(beware transaction fees)} or some other stable. Yes, they are all pegged to the dollar, there's not yet a good euro-linked stablecoin but when it comes to paying for a beer or two, a US dollar is more or less a euro

The second one is more tricky: transaction costs on the most popular blockchains, Bitcoin and Ethereum, range from "significant" to "skyhigh". You can end up paying $7 in transaction fees for a beer that costs $5, which is a bit discouraging.

Hive

Hive shines in this respect too: first of all, it has a native stablecoin, HBD (Hive-backed dollar) which can be acquired in the "internal market", with zero transaction fees.

^{You can swap HIVE for HBD and HBD for HIVE with no fees in the internal market}

Because HBD is an algo-stable, whoever has Hive can also "convert" to HBD through a native smart contract not unlike MakerDAO's one for creating DAI. However, unlike the internal market, this path is configured for 5% fees so "caveat emptor"

Once you have HBD in your wallet, and provided everybody agrees to approximate 1 USD = 1 €, payment can be done in 3s with no fees!

Conclusion

I'm interested to find out in the next months if the OffChain Luxembourg crowd could be made curious enough to try "using a zero-fee blockchain to collect payment in a stablecoin from attendants to its events, to compensate the organizer for paying the whole bill", as I wrote in the OffChain Luxembourg chat. I am of the opinion that for a group of people passionate about blockchain, it's a "must do" proof of concept.