Hello, my name is Jon ‘maddog’ Hall and I am the Executive Director of Linux International. My talk today is about crypto-currency and small business. The agenda of the talk is a brief introduction to myself and my history, my impressions of what cryptocurrencies and blockchain are, an idea for commerce around these currencies and technologies, a delivery mechanism for that solution, and then a summary of the entire talk. Who is “maddog”? I have been in the computer industry for over 50 years.
I have been a programmer, a systems administrator, a marketing person, a product manager, a CEO, a consultant, an educator, and a wide variety of other things. In 1994 I met Linus Torvalds and saw Free Software for the first time, and I decided that this was a good thing.
Most of the things I am really proud of is the fact I am pragmatic. I try and get things done. I try and choose the right tool for the right time and the right job.
I am not religious about things. I am also not a crypto expert, nowhere near as many, as it is in this room, virtual or otherwise, but I do have a rough grasp of what it is and I do like the idea. So this is a warning. This is not a current product or service. It is merely a proposal.
I think it can be done. I think it would have great benefit. About 10 years ago I began to realize that people do not really buy hardware and they really do not buy the software. Most people do not buy a piece of hardware and glue it to the wall with a candle on either side like a shrine (unless of course your name is Steve Wozniak and the hardware is an Apple one).
They do not buy a box of software and glue it to the wall with a candle on either side unless your name is Bill Gates or Larry Ellison and it is a box of Microsoft Office or Oracle.
They buy a solution. They are looking, they have a problem they want to solve and they want to solve that problem so they buy a solution and even if that problem was how do they play a game and the solution was to use two tin cans and a string to tie them together then that’s what people would do. And so when you start to think about every issue and every problem like that whole new avenues open up in front of you. Now I like I said I am not an expert in cryptocurrency and blockchain.
I think of cryptocurrency simply as a digital medium of exchange. I have some crypto coins and I want to buy something and you have some product. I want to buy and so I give you my crypto coins and you have them, then they belong to you.
They go into your wallet (whatever that is) and it can be an asset you could hold on to. The crypto coins and go up and down but I do not really think of them that way. I do not really see that. You can mine crypto coins. You can bring them into existence.
I am really not interested in that. I am really interested in the digital medium of exchange and what that can do for the world. Likewise with the blockchain.
I look at it as an electronic distributed ledger. That’s all I think of it as. It is not something mystical or magical or anything like that, but it is a way of keeping track of these transactions. And then there are smart contracts, things that if the situation is right you can go ahead and execute the transaction, and this speeds up commerce and lowers its cost.
So why is not everybody using these? Well, a lot of it is a lack of understanding. Most people do not even really understand fiat currency. They do not really understand the issues of credit and loans and all the different things that go into our regular forms of currency and medium of exchange.
They have a fear of loss around cryptocurrency. Yes they hear about people who make millions of dollars and become very rich with cryptocurrency as an asset, but they also hear about people who lose their wallets and it is gone forever, and while it is true you can have money burn up and you can have people cause scams and things like that, people are more used to that and so they do not fear it as much, although perhaps they should.
They also hear about the rapidly changing values in cryptocurrency and they say “Well it is great if I get the cryptocurrency and it goes up in value somehow, but what happens if inflation comes and it goes down in value? I hear it can go down very quickly that’s something that troubles me.” And then of course I also hear about hackers breaking into systems and hardware and software failure that cause people to lose money.
There is another thing about cryptocurrency it just is not as easy in a lot of ways as pulling some money out of your wallet and handing it to the clerk. Or pulling your credit card out of your pocket and handing it to the clerk.
Now I am old enough to remember when credit cards were new, and they were very suspicious and only certain stores would accept them, and only for certain amounts. You could not charge a pack of gum or something like that on a credit card. It just was too expensive to do that and so credit cards themselves were slower and tended to be for larger value purchases. Along those lines, they look at cryptocurrencies being too expensive.
After all, you have to take your fiat currency or something like that, take it down to an exchange (wherever that is) and pay a certain fee to have your cryptocurrency, have your fiat currency, changed into cryptocurrency. So what I am going to present is a system where we could work cryptocurrency and blockchain into the system and be almost invisible to the people using it.
“ODOO” is an Open Source Point of Sale and Enterprise Resource Planning piece of software. I am sure many of you have gone to McDonald’s and you’ve seen the cash register there and the people press the things on the touch screen and they bring up your order and then magically your bill appears, with the taxes all calculated, and you get the receipt and you then go and pick up your order someplace.
Or you are at the supermarket and the items are coming down and you see the person scan in the barcode and they weigh the bananas and they hit the touchscreen to say it is bananas, and then the cash drawer opens up and you give them the money and the printer prints out your receipt and everything.
Those are Point of Sale terminals and you can buy them from very large companies like Oracle and others and they may cost three thousand US dollars apiece. So if you have three sets of or three places for people to collect your money, you need three of them.
And this is of course very expensive but that is not the worst part of it. There typically is software standing behind the point of sale terminal that does inventory and customer relationship management and ordering and things like that. This is called Enterprise Resource Planning software. And it is typically closed. You can not change it.
It is owned by the company that made it. You can only use it, and so everything about it is expensive. Well ODOO is an Open Source Free Software version of that and you can put ODOO on a single board computer like a Raspberry Pi or like a Casinos Loucos Labrador computer. Very inexpensive, and you can plug in your USB keyboard, mouse, scale, scanner, printer.
Cash drawer, almost anything into this little single-board computer and lo and behold you have a complete Point of Sale and ERP system. This particular project ODOO is a worldwide phenomenon. There is every single country has people who support and install and maintain UDOO systems and it is actually being installed at about the rate of a thousand installations per day.
Originally ODOO started as completely Free Software. But then there were some people that said: “Well some of this stuff really requires hard work to do and we are going to close those off and charge people money for them.” But then another group came along and said: “Hey we are going to rewrite all of those modules that are closed and we are going to make them free again.”
Now what we can do is integrate cryptocurrency and blockchain into the ODOO software and this would bring about this type of scenario. A customer comes into your store and the customer has “Fred” cryptocurrency.
And the customer gives us cryptocurrency or says to the store owner ‘Do you accept “Fred”‘ and the merchant says ‘Yes we accept “Fred” for purchase of products.” And so ODOO looks up the value of “Fred” and says ‘Oh well “Fred” is worth this much Reals’ and then takes and compares how much “Fred” you have to have to buy a certain amount of the product which the customer is trying to buy.
The customer then buys the goods and services and transfers “Fred” into the wallet of the store. The merchant now has “Fred” in their wallet as an asset and the merchant has made an additional sale that they might not have made if they had not accepted “Fred”.
Now the merchant says “Well I have got this “Fred” but what can I do with it?” Well, you can have an online database of suppliers to the merchant that accepts “Fred” for their supplies. And so the merchant says “Well you know I just sold, you know, a pound of bananas. I obviously need to replace that.
Maybe I am going to buy five pounds of bananas, and my banana supplier accepts “Fred”. So I can buy five pounds of bananas with “Fred”, with the “Fred” I have, and maybe that uses up all of the “Fred”. But maybe you still have some “Fred” leftover so you look for other things which you need in the store.
Maybe you need green beans, and a green bean supplier uses “Fred”. Smart contracts can negotiate for the best suppliers, the best shipping prices, the best taxes, for all of this and give you the best choice of getting these products. The merchants then go ahead and buy the products with “Fred” to replenish their stock, and all the “Fred” is missing from their wallet.
Here is a second customer scenario. The customer comes in and pays with a fiat currency. However, the manager doesn’t have enough of that fiat currency to give change. The manager says ‘Would you accept “Fred” as change for your thing at this exchange rate?” And the customer says “Yes, I would be happy to do that.” So the customer pays back as much “Fred” as they want to pay and pays back perhaps with some fiat in that case.
And the system keeps track of how much of each they have to put in. The goal here is to keep the crypto in circulation so at any one time the store owner, the merchant, has a small amount of that in their possession and what they are doing is they are getting these additional sales. Just like what happened with credit cards way back when.
This is also a very small time that if inflation is going on that the inflation would actually happen and take effect. The advantage of this system is that cryptocurrency is really just viewed as another payment type, along with the fiat currency, along with all the different credit cards, the store cards, the debit cards, and everything else. The store owner really does not have to know anything about cryptocurrency.
They do not have to go through any exchanges or anything like that. This cryptocurrency just keeps getting circulated very rapidly. Smart contracts can be used to keep the stock up to date according to the inventory mechanisms that are already built into ODOO. Now, this supplier database of who accepts “Fred” and who does not could either be kept locally at the store or it could be kept at a server system someplace or combination of both.
And we could set this up so that any cryptocurrency could be used, as long as the store owner is willing to accept it, and that reasonable number of people accept it for doing merchandising. So what is Project Caua? Project Caua has been under development for 12 years. It was originally made to create more efficient computing, more efficient use of electricity, by retrofitting old buildings that, instead of using very energy strong energy usage of computer systems, to use single board computers, very very low power, single board computers and server systems.
It was also set up to enable students to earn money to go to university. Now all this is still a part of the goals of Project Caua. Universities in Latin America are nice because if it is a federal or state university you can go tuition-free if you’re a qualified student. If you studied hard in high school, you got good grades, you took the entrance exams and you passed you could go tuition-free.
In the United States, there is a lot of very expensive universities that you could spend tens of thousands of dollars a year intuition. However, 40 per cent of the qualified students in Latin America cannot afford the apartment or the internet or the computers or the books or the food or the transportation that goes with being a student even at one of these universities and therefore they have to turn down the chance to get their education. Other times students get “student jobs” like flipping hamburgers or being the clerk at the hotel at night.
And there’s nothing wrong with those jobs, it is just not the jobs that the students really wanted when they went to university. So Project Caua allows the students to take the information and knowledge they already have, to help small business people with their computers. To make sure that the computers have enough disk space, be sure they are not attacked by viruses, to make sure that they have all they need to be able to be efficient.
And what happens is we take these students who may have been supporting their families’ computers since the age of eight or maybe their neighbour’s computers or things like that, and we teach them how to run a business. We train these computer-savvy students on how to form a service contract, how to advertise their skills to small business people and how to manage their time.
Because this is going to be a part-time job of maybe 24 hours a week for the students while they are going to university. They can also subcontract to other students for the things that they themselves do not know how to do. And Project Caua would teach them how to do all of this. We have developed a three-tier website.
The top tier of the website explains the entire program. What we’re trying to do and it maintains the products for the entire program, the things that the students could sell to their customers around the world. The middle tier is a country by country tier because different countries have different legal needs. Different languages, different advertising that they are going to do and we want to be able to tailor the information to each country in this middle tier.
Finally, there is a third tier which for each country we have many many local groups. And these groups would do things like providing local help. They would provide mentorship for the students because a lot of the students are a little shy. They have never sold themselves before. They do not know how to do that. So we reach out to business groups: like small business groups, like the alumni association of universities, the financial office of universities, for people who are willing to act as mentors for the students.
Originally Project Caua was supposed to be a service only thing. The students would not deal with hardware, they would not deal with selling products. But the students suggested they wanted a solution to sell and service to their customers, and so one of the first solutions we thought of was ODOO.
Afterwards, we also thought about setting up a NAS server to tie together all the different computers that a business would have. We thought about having a “Smart TV” like service for at home that would also provide security, voice over IP and Internet of Things capability. And lately, we have also been trying to put together a multimedia laptop that would allow people to go out to an event and capture all the video and audio and everything, edit it, and then be able to put it up to a website while they are still at the event.
Project Caua would do all the project integration and sales across the world. Across the world, most of these products would be exactly the same. There would be a few tailorings for different countries like language and things like that but most of this could be integrated at the uppermost level of the website. All of the information and all of the projects would be GPL or Creative Commons so you do not even have to belong to Project Caua to take advantage of this.
And we would publish everything on the website read-only. None of the students would ever pay any money to Project Caua, unless of course, they want to buy specific things that required money, like professional insurance or perhaps marketing materials or whatever. But to actually access Project Caua, and to work with it, they do not have to pay anything.
Project Caua would then create kits on a country level and sell these to the Project Caua Professionals. The low volumes would allow us to create a revenue stream for Project Caua and FOSSH projects to help to sustain the project, but they would still be getting the things we’re selling to them below the price that they would be able to buy them themselves.
So in summary, ODOO can supply inexpensive Open Point-of-Sale and ERP systems worldwide and support crypto-currencies and blockchain as another medium of exchange.
Project Caua Professionals can sell, install, and train small shopkeepers in how to use this, explain cryptocurrencies to them, explain blockchain to them, and act as promoters of cryptocurrencies which benefit them and benefit all of you.
So with that, I will take questions, and I thank you very much for listening to my talk.
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