Venezuelan bank closes, EatBCH and Flipstarter are helping Venezuelans

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Coronavirus is a global public health security event, and Venezuelans are not immune to its consequences. Since the first confirmed diagnosis announced by the Venezuelan government, less than a week has seen the spread of 60 cases across the country. Venezuela then quickly moved to try to stop the spread of the disease.

Venezuelan President Nicolas Maduro has ordered national segregation, including the closure of non-essential companies and stores in the country. This quarantine also affected the banking industry, with banks being required to close their doors and keep only a minimum of staff to keep limited ATMs working. This measure, effective March 15, and communicated by the National Banking Supervision Agency (SUDEBAN), has affected many Venezuelans to obtain the necessary sources of cash for their daily lives.

Venezuela's severe cash shortage

Venezuelan economist Luis Barcenas said that in the face of more than 20 million ATM machines, the number of ATMs has halved in the past few years. Banks now have only one ATM per 3,000 people, and 33% of these ATMs are concentrated in the country's capital, Caracas. This has made it more and more difficult for Venezuela to cope with the cash shortage in recent years.

Luis Francisco Cabezas, of COVITE, Venezuela's agency for older people, told 700,000 retirees that 3.8 million registered retirees cannot use their pensions to pay online. This exacerbates the already difficult state of cash use before the outbreak, because without cash, these people would not be able to purchase basic goods and payment services.

Maduro recently asked the International Monetary Fund for a $ 5 billion loan to fund Venezuela's response to the outbreak, but the loan request was rejected due to political instability in the country. The shortage of cash has caused more than 80% of the population to have insufficient capacity to prevent or treat the virus, and they have no access to basic living supplies and anti-epidemic supplies.

Flipstarter and EatBCH cooperate to rescue Venezuela

Most people in the BCH community have heard of EatBCH, a charity that shows the world the real use case of BCH as a fast, reliable, and low-fee global currency, dedicated to helping the world in need of help with BCH Region (ie South Sudan and Venezuela) to get out of the predicament; Flipstarter is a decentralized fundraising platform created by a group of volunteers in the BCH community. The goal is to achieve trust-free, third-party custody, and BCH as an Assurance Contract. Raise funds for public projects. The plan to rescue Venezuela is completed through the cooperation between Flipstarter and EatBCH, which is also the first donation proposal of the Flipstarter platform.

Flipstarter donation method

At the beginning of this year, some members of BCH resolutely opposed IFP. They believed that the way IFP raised funds could not last long. To prove this, the idea of ​​Flipstarter was born in mid-February. The original intention of the project was to create a volunteer for BCH public utilities. Funding-free platform without trust and trust.

In simple terms, anyone can make a donation to any BCH project through the Flipstarter platform, and then other users can decide whether to donate. This method differs from general donations in that you will use an Assurance Contract (AC) that you do not need to trust and do not need to be held by a third party. Assurance Contract is a game theory mechanism for solving public construction, collective action, and hitchhiking. It is also a financial technology.

Under binding conditions, a group of people agreed to donate to a certain amount and collectively donated for a project. If the agreed amount is reached before the deadline, the project will be funded and the public construction will be completed; otherwise, participants do not need to contribute and can get back the amount put in.

Flipstarter is currently installed in Electron Cash wallet. Users only need to install the specified plug-in on Electron Cash to participate in Flipstarter. This is a more secure solution that does not require third-party custody. Users do not need to withdraw coins to Electron Cash throughout the process.

EatBCH intends to raise 20 BCH, and this number has been reached. But it's too early to say that Flipstarter is a success, and this all-volunteer organization is working hard to make people aware of it. The developers stated that there are flaws in the minimum number of commitments, complex plug-ins and restrictions on sending from private keys, multi-party or hardware wallets, etc. These are features that need to continue to be developed.

The @flipstarter team believes that “funding Bitcoin Cash infrastructure is important, and the diversity of infrastructure creates a resilient ecosystem. 

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