The Blueprint for Bitcoin Payments: Inside Money Badger | Carel Van Wyk

Live from Bitcoin Beach in El Zonte, El Salvador, I sat down with Carel Van Wyk, a true Bitcoin pioneer from South Africa, to hear his incredible journey in the Bitcoin space. Carel shared how a sci-fi book planted the seeds for his belief in a non-governmental digital currency and how he stumbled across Bitcoin back in 2010. From helping build South Africa’s first Bitcoin exchange (now known as Luno) to launching Money Badger, a project aimed at making Bitcoin a spendable currency, Carel’s story is nothing short of inspiring.

We dive into the challenges he faced, like navigating strict regulations and innovating payments with the Lightning Network, and how his team enabled 1,600 Pick n Pay stores in South Africa to accept Bitcoin. Carel also reflects on his visit to El Salvador and the amazing progress this country has made in Bitcoin adoption, comparing it to the hurdles South Africa is still facing.

If you’ve ever wondered what it takes to build a Bitcoin-based payment system from scratch, you don’t want to miss this one! Tune in and let’s learn from Carel’s incredible journey!

- Mike

Support and follow Bitcoin Beach:

https://twitter.com/Bitcoinbeach

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https://www.tiktok.com/@livefrombitcoinbeach

Web: https://www.bitcoinbeach.com/

Follow and connect with Carel, Money Badger, and Luno:

X: https://x.com/carelvwyk

Website: https://www.moneybadger.co.za/

LI: https://www.linkedin.com/company/moneybadger/

X: https://x.com/MoneyBadgerPay

IG: https://www.instagram.com/MoneyBadgerPay

Website: https://www.luno.com/

Browse through this quick guide to learn more about the episode:

0:00 - Introduction
1:47 - What is Carel van Wyk’s background in Bitcoin and technology?
3:53 - How do South Africa’s economic challenges impact Bitcoin adoption?
5:21 - How did Carel van Wyk first discover Bitcoin in its early days?
7:34 - What was South Africa’s first Bitcoin exchange, and how was it founded?
9:28 - How do Bitcoin exchanges handle liquidity and exchange controls in South Africa?
12:46 - How did BitX evolve into Luno, and what lessons were learned?
16:23 - Why did Carel van Wyk leave Luno, and what happened next?
19:06 - What is Money Badger, and how does it help make Bitcoin a usable currency?
22:14 - How did Money Badger enable Bitcoin payments at South Africa’s Pick n Pay stores?
26:36 - What challenges arise with Bitcoin QR codes, and how can they be solved?
30:58 - How did Money Badger and Blink wallet collaborate to simplify Bitcoin payments?
35:31 - Can proprietary QR codes like Pick n Pay’s work seamlessly with Bitcoin wallets?
38:59 - How could Bitcoin wallets improve compatibility with Chivo QR codes in El Salvador?
42:19 - What’s next for Money Badger, and how does it plan to expand globally?
47:45 - Why is Bitcoin as a unit of account important for businesses like Money Badger?
50:35 - What are South Africa’s new crypto regulations, and how do they affect Bitcoin? 56:15 - How does El Salvador’s Bitcoin adoption compare to other countries?
58:56 - Can improving safety and reducing crime accelerate Bitcoin adoption in South Africa?
1:00:01 - How can you follow Carel van Wyk and learn more about Money Badger?

Live From Bitcoin Beach

Transcript

Carel van Wyk  
So the only badger is this African animal. You know, it's like, got grit and it's it's smart and it just like, it's fearless. And the purpose of money badger is to continue that next step of the missions. And I always felt that we still needed to do more. So we still needed to make sure that we've got the right technology to do payments and remittances and money badger is that so the like the mission of money badger is to make Bitcoin money. Oh,

Mike Peterson  
Carel, you're a long way from home.

Carel van Wyk  
Yeah. 36 hours. 

Mike Peterson  
36 hours. Where do you have to connect through? 

Carel van Wyk  
Washington? 

Mike Peterson  
It still took 36 hours? You had direct flight to Washington. 

Carel van Wyk  
So Washington, the flight lands at 6am in the morning, and then to El Salvador at 6pm in the afternoon. So

Mike Peterson  
Did you leave the airport for the day? Or did you- 

Carel van Wyk  
No I was too tired. I was just sitting there, yeah, but I'm sure, like a lot of people coming to the conference, also travel very far.

Mike Peterson  
Yeah, but that's kind of a dismal airport to hang out in for 12 hours. 

Carel van Wyk  
That's fine. I was working on my presentation, so I didn't care what was going on around, and I was, like, laser focused on that thing.

Mike Peterson  
Well, I'd love for you to give a little background on your personal history. I know you've been in the Bitcoin space for for quite a while, but because you're from South Africa, probably a lot of people don't know your story.

Carel van Wyk  
So yeah, we South Africans? We just kind of drunk in a world there down at the tip. We just do the work. Yeah, we get it done. We don't make a big fuss about it. But yeah. I mean, we will start with a question, like, what orange building, right? Yeah. And my I always joke about it, and I'm saying, I say, when we orange built, that's the big question. You know, I always say 2005 and then people like, what? So my my first exposure to digital, to crypto currencies. I know crypto is evil word, but crypto currencies was reading Neil Stevenson's fictional cryptonomical I'm not familiar with that. Not familiar, no, so the book it, it's a story about a group of people that they're like these revolutionaries, and they believe that the way to address tyranny and inequality in the world is by creating a non government digital currency, so they find some sovereign jurisdiction, and they could drop a bunch of gold there, and they issue digital tokens, and then they distribute these digital tokens in regions that's suffering from human rights issues and things that. And, you know, I think sometimes it's good having the right problems, because then you think about the solutions in a different way. And growing up, I had the, I was fortunate to have these kind of problems related to money and currency and the economy. Because we've in South Africa, we've got exchange controls, we've got higher rates of inflation than in first world countries. 

Mike Peterson  
I know, the first time I was in South Africa was 97 and it was re ran to the dollar,

Carel van Wyk  
and that's currency depreciation. So we see that it's not as bad as 

Mike Peterson  
17 17?

Carel van Wyk  
Now, 18 18. 18.2 Yeah, and, and I grew up as a teenager fascinated with coding, hacking on I lived on the internet basically. So I already felt like, you know what? I'm already kind of living my life in a different, more universal and global space, and I'm stuck in South Africa, and we're dealing with these economic problems and things. And I read this book, so I started thinking about the potential of something like money that's founded on a on, like, a universal standard foundation of freedom that's built on open source code, which is the same as in the book. And that was a nice fantasy, right until a couple of years later, and then I read some Reddit post of Bitcoin like, oh, okay, it's. Sounds like this thing. I read about nice, nice toy, playing with it, and I'm a very skeptical person, something. Yeah, it's, it would be great if it, if it was real and true, but probably not. So then I decided, let's dig into the 109, I wish I could turn nine, but this was 2010 2010 2010

Mike Peterson  
Yeah, still very early. 

Mike Peterson  
Hey, guys, just a brief interruption. We'll get back to the exciting show here. But I just want to really ask a favor that you guys could make sure that you're subscribed. If you're watching this on YouTube, if you are listening to this on a podcast, please take the take a second and review this. You know. You know you don't even have to write a lengthy review or anything at all. Just click the number of stars that you want to give us. It really helps us in the algorithms to make sure people are finding out about what's happening here. All right, back to the show. 

Carel van Wyk  
So I read the white paper, and then every single word just popped out to me as the truth, and I think I dare to believe, I dare to believe that it's real. But nobody else believed me. Nobody else believed me. People were like, No, you're crazy. And I had, I was fortunate enough to to work on several Bitcoin projects. And while working on those projects, like my friend would say, when you're getting a real job, like stop playing with this crazy internet money thing. And now sitting here today at adopting Bitcoin El Salvador and these conference, you know, you know, my, my favorite moment of this conference was, there was a panel of kids, Herman's son, yeah, I missed that

Mike Peterson  
one. Yeah. He was done, yeah. And I just went,

Carel van Wyk  
and I sat in front of the kids and listened to them speak, and they experienced with Bitcoin. And I realized that we've now gone beyond this early thing that's like a crazy, crazy niche thing, and we've started building, you know, a tribe around that thing, and this tribe is growing, and there's a next generation that's getting involved. So to me, that was a very special moment, and I completely lost track of what I wanted to say. But that's kind of

Mike Peterson  
my 2010 you were. You're playing around with it. And then how did you get from there to, I believe, helping found South Africa's first exchange.

Carel van Wyk  
I would call it the first exchange. So, and this is relevant to something we need to discuss. So I was working on a project called Snap scan, and it was a revolution in mobile payments, Fiat mobile payments in South Africa, because it used this new fancy thing called the QR code, so that didn't exist and snap scan allowed somebody with the app to pay a merchant with a QR code. The merchants love this because for them, it was hard to sign up as a like a credit card merchant to get terminal and they paid monthly fees at the time. It's very expensive. And snap scan said, we're making it cheap and easy for you to sign up, and then anybody with this app can pay you. And the funder, or the owner of this was a bank called Standard Bank. So you might have heard of Stan stanbic, I think be like the global I think it's then anyway, standard banks, yeah, I don't know

Mike Peterson  
if it's the same one, but yeah, yeah.

Carel van Wyk  
So the department head of innovation, we we had a lot of interaction with him building snap scan, and one day I just told him, Listen, I need to talk to you about something. It's important. Talk to him about Bitcoin. And I said he's like, What

Mike Peterson  
year was this? So this was 2013 Okay, 2013

Carel van Wyk  
um, obviously. I mean, you're thinking this guy is just going to say this nonsense, whatever. And he said, Oh yeah, my son told me about this. I'm keen to explore it a bit further, so I'll give you half a million rands. So that's what like? What's that like? $25,000 let's build a Bitcoin wallet. The 30,000

Mike Peterson  
today, yeah, probably then it was more.

Carel van Wyk  
Yeah, more. So he said, Let's build a Bitcoin wallet for the bank. And, I mean, I couldn't believe that just having an executive that gives a Go ahead, because typically, an executive is some is an entity that's a very risk averse, yeah, kind of person, right? So, so extremely lucky to have this executive keeping going with built a fully integrated wallet for Standard Bank, and we demonstrated it at a conference in the. UK innovate early 2014 I think was Jan 2014 so we went up on the stage and we showed these screens with the Standard Bank logo, and clearly like Bitcoin wallet functionality, it and it works like complete solution. Was it custodial wallet or Yeah, so the it's a bank, it's a bank Wallet. So you would log in with your banking details, and then you have access to a Bitcoin wallet inside of your banking interface. So bank custodial, and we completed the presentation, and afterwards, a man came up to us, and he said, Guys, what the Are we allowed to use profanity? Sure. So he said, Guys, what the fuck was that? And we're like, Whoa, this is the thing we bought for Standard Bank. He's like, No, I am the head of compliance, risk and compliance standards for Standard Bank. Yes, I don't even know about this project this. This is not on. This is not flying you guys shutting it down to now today. And if you go and Google, the only way that you'll find articles about this is if you add like before colon 2015, because, like, they try to, like, take that of the media completely. So that guy was not happy about it, and he said, we authorized this, and we named the head of innovation. He's like that guy, that guy is getting fired, really, so his career was kind of on the line, but he didn't get fired. But there was some controversy around that, but the result of that was we had a team of highly skilled competent peoples. We had the CEO of that because, okay, maybe, maybe of that, of that project, the CEO, CTO CFO, myself, and the CEO said we can either build, try to sell this to more banks, or we can pivot from B to B to B to C, and we build it for the consumer. And we all agreed, let's build on ramp, off ramp, and it's a consumer product. We're not selling it to another bank. And we founded the company, which was called bit x at the time, and then bit x, bit x, okay. And eventually it was rebranded. So we had a moment where we we were thinking about the brand and the name, and we can cross this name called luno Luna, meaning moon in Esperanto, yeah. So we all felt like a connection with this new name, and we decided we're going to rebrand the company. And it grew

Mike Peterson  
and grew. He didn't know there'd be a luna coin

Carel van Wyk  
in the future Bitcoin. This is Bitcoin exchange. And we, we, we, I think we were fairly successful. We captured what year was that that you opened it? Bittex was launched in 2014 in the same year that the banking project was

Mike Peterson  
killed. So did you leave the bank to launch it? Or you were doing this on the side, that old

Carel van Wyk  
bank thing was instantly shut down. So we pivoted and B to C and autobitix, okay, but you

Mike Peterson  
actually, because you were working for the bank, right? No, we Oh, you were, they had hired you

Carel van Wyk  
innovation, okay, function contracted to location, apartment, yeah. So you guys pivoted open the exchange,

Mike Peterson  
yeah? And

Carel van Wyk  
they said, so the exchange had nothing to do with the bank. This is completely separate project. Yeah, that's was that

Mike Peterson  
I'm trying to remember my history was that that was before mount Gox failed, right?

Carel van Wyk  
Yeah, that was, I think that was before mount Gox I'm trying to remember now if, if mount Gox failed in 20 didn't it fail in 2013 was it 2013 I can't remember. That's 2013 1415,

Mike Peterson  
but I mean, even in the globally, you guys were, was fairly early, very early.

Carel van Wyk  
Yeah, it was quite early. And, I mean, it was a solid system. There were a lot of competitors. They were like rushing, and they didn't have the right engineering and things behind it. So I think this is one of the first that that was a strong, reputable product, and it ended up being very successful, and it's still a successful company today, and

Mike Peterson  
with the currency controls in place in South Africa, how did you guys solve the liquidity problem with

Carel van Wyk  
that was a big issue initially, so the very first function, the way it worked at first, was literally two buttons that said, email us if you have Bitcoin to buy or email us if you have Bitcoin to sell. And it was a manual just matching matching, okay, manual matching. And then from there, iterating and automating, building a matching engine, building banking rails, you know, everything and everything, adding that on top, um. So the liquidity came. People found ways to introduce liquidity with exchange controls. What we do have is we have annual allowance to move capital out of the country. And people realized that there was an arbitrage. They could purchase Bitcoin cheaply internationally and then sell it because it was selling at a premium and selling at a premium in South selling it for premium in South Africa. That premium, that arbitrage, just very rapidly, brought in the liquidity, took a couple of years, and that premium is down. What was the premium initially? Yes, that premium was like 50% at some point, 55 0% Wow. But the volume for low, right? Yeah, it's not like infinite money, but a lot, and then at fairly high volume, even it went down to like 20, 10% to 20

Mike Peterson  
today. Was there people that that's all they were doing was,

Carel van Wyk  
yeah, that's now a very lucrative type of business in South Africa today is an arbitrage company where you, as a as a client of this would approach them and say, I have this foreign allowance to move capital out, and can you help me to use it and generate return thanks to this arbitrage. It's not like several companies doing that. So that arbitrage has been shrinking, but it's still profitable. Interesting. Wow, so the liquidity came out very quickly, actually, okay?

Mike Peterson  
And then you guys were, this was your full time thing, running

Carel van Wyk  
this exchange. Yes, on a percent.

Mike Peterson  
And how long were you part of the exchange? And why did you wind up leaving?

Carel van Wyk  
And why did I leave? So I was part of it for six years. We we normally started 2013 2014 I left in 2019 and the reason I left was actually a stupid reason. I used to take the training to the city. And then, I mean, we have some problems with crime and violence in South Africa. And at some point, there was some people that were burning down the trains. They were away. They were burning the trains, burning them. Now, yeah, yeah. So that, essentially my transportation became unavailable indefinitely, so I had to take the car. And Cape Town traffic is horrendous. I felt like I was just wasting my life on the road. So I approached my co founders, and I said, Listen, I want to work from home for a couple of days of the week, three three days a week. They said, You can't do that, because you're setting an example to the rest of the company, and we're an in office company, so you can't do that. And they said, Okay, I'm going to look for something else. For something else. I'm spending too much of my time on the road. And then this was 2019, and then COVID hit, and everybody was remote just after I left. So it goes the irony, but the what it gave me the opportunity to find, I found this new company called Money badger. Money Money badger, okay, money badger. It's like a honey badger. So the honey badger is this African animal, you know, it's like, got grit, and it's it's smart, and it just like, it's fearless. And the purpose of money badger is to continue that next step of the mission. So Luna was give people access, right? It's an on ramp and an off ramp, but it's an on ramp, but that's where it ended. So on ramp, off ramp, and I always felt that we still needed to do more. So we still needed to make sure that we've got the right technology to do payments and remittances and money badger is that. So the the like the mission of money badger is to make Bitcoin money and not a speculative asset or investment, and everybody sees those speculative I'd love to hear

Mike Peterson  
that you're speaking my language right now. That's our goal. That's our mission.

Carel van Wyk  
And it's, I'm just going to say this, it's not very lucrative. It's, it's a labor of love, yeah. And it's, I think, as much a community project as it is a commercial project at this stage because a small minority of people are spending their Bitcoin. It's a what's happening here? It's a total outlier most people, but the vast majority of people that only like hold on to that as an investment. I mean,

Mike Peterson  
that's one of the biggest battles we you know, fight is getting Bitcoiners to spend their Bitcoin and to get them to realize that living on a Bitcoin standard means you're going to spend it on your daily needs. And that's how it that's how it wins

Carel van Wyk  
100% Yeah, but I think that the we're just early. I know we keep saying this, we're early, but we are i. The problem is that if you earn Fiat and then you convert the Fiat into Bitcoin, then that Bitcoin is more valuable than your Fiat, and you don't want to have less Bitcoin. And so if you have Fiat, you'll get you'll be spending the Fiat, and only when people start getting into a position where they have no Fiat Yeah, then the the Bitcoin economy will really take off. And that's happening. I mean, we're seeing it slow, but we're just really done impatient. It's going to happen.

Mike Peterson  
No? I mean, we're seeing in El Salvador like

Carel van Wyk  
this blowing my mind. Yeah, this is it's I do not have words to express the feeling that I have when I am here, because this is like a lifelong dream. I mean, I've started dreaming about this even before Bitcoin.

Mike Peterson  
Well, it's crazy, if you think this only happened in a few years. So El Salvador was, you know, ages behind even where South Africa was at, but then they've been able to leapfrog basically everywhere just in a few years. How

Carel van Wyk  
quickly things change? Yeah, exactly. So.

Mike Peterson  
So tell me about, is this an app, or is it a company or what? Tell me. Tell me about money badgers.

Carel van Wyk  
I mean, it's more like a more like a mission than the company. But anyway, the com the company. So the commercial model is straightforward. The idea is that it's a merchant payment service provider, and we add Bitcoin payments. But done right? There's a lot of ways to do it wrong. I built integrations for Big E commerce payment aggregators before lightning. We did it on chain, and it didn't work well, yeah, so there's a lot of ways that you can get it wrong, and there's one way that you can get it right, and so we're doing it right. And the model is very simple. The merchant pays for the service, and then we give people the ability to spend the Bitcoin at a merchant. And I think the but

Mike Peterson  
tell me how that actually happens? Like, well, actually, yeah, what are the steps? What does the merchant need to do? What does the consumer need to have? Is the merchant actually receiving Bitcoin? Are they automatically converting the Fiat? What is the process? We try

Carel van Wyk  
to be as flexible as possible. So our preference is that the merchant receives settlement and settlement Bitcoin. But many of them prefer Fiat, yeah. And then, if we are talking about an E commerce solution, it's a bit easier, because you can display a lightning QR code and lightning invoice when you're paying. But we actually enjoy working with physical retailers the most because it's like one of those things where, if you, if you walk into a shop and you're playing with like thing, it feels like magic. Yeah, that's a powerful first

Mike Peterson  
time somebody makes a lightning payment, exactly? Lightning goes off. Yeah, that's,

Carel van Wyk  
that's an orange ball moment. So, yeah. And so we had this amazing opportunity where our very first client was the second largest retailer in Africa, and so it's like the Walmart. That's the best analogy I can use. It's like the Walmart of South Africa. That's pick and pay. That's pick and pay, and the so that's what Kickstarter money badger is. Because we had this client, massive client, that said, Can you do

Mike Peterson  
this? And we said, what motivated them was it a bitcoiner in there? That's

Carel van Wyk  
a very good question. So again, it's this case of an executive that was both a visionary and also had the right view around risk and not this. You know, this, this approach of, we need to de risk for the sake of de risking, let's, you know, quantify risk and then decide whether that has a, whether we can mitigate it, to capture the upside, capture the potential. Again, we were just lucky to have this executive in a position at pick and pay, where he was posed with a challenge. So he was the head of payment systems at pick and pay, and they just invested a lot of money into an upgrade. So they came from, like an old, I don't know, like a mainframe type of system, and they did both like a cloud thing, and they invested a ton of time and effort into the technical stack at the point of sale. And so you wanted to really express, you know, what is the return on this investment? How easy is it to add new alternative payment? Methods because of this new and more flexible and nimble stack. And he was a bitcoiner, so he said, Well, let's see if we can add Bitcoin. And that's just, we just got lucky. It's this is how we grow the whole ecosystem. It's like these lucky breaks that we get. I remember

Mike Peterson  
Herman messaging me and telling me like you're not going to believe this, like your super Mar main supermarket in town, even a lot of the little stores buy their supplies from, is going to start expecting Bitcoin.

Carel van Wyk  
And that was it was great having Herman and Bitcoin and cause in Mossel Bay, because as we were building this solution with pick and pay, obviously they're not just going to deploy it. They first need to test it properly. Yeah. So where do you find beta testers for the solution? Well, there's this Bitcoin Economy in muscle Bay, and they are highly motivated to see something like this succeed. So we immediately had, like, a large number of people that could go to pick and pay and test it. So we had a lot of real world data initially, and that that just expedited the whole process. That made that meant that we could, you know, address any issues, that there weren't any issues, really. I made

Mike Peterson  
a purchase when I was there a couple of years ago. Fantastic. Yeah, so

Carel van Wyk  
yeah. And then it worked really well, and we deployed it to all the beacon based stores. So now it's deployed nationally. There's like 1600 stores practically in every town in South Africa is one of those. So

Mike Peterson  
initially, I know when I was there from the cashier's point of view, I don't think they knew, even if you were paying with Bitcoin, they it just a QR code that was payable in some other way. I think also would flash up on the little screen you'd have, and you would have to download a separate app that could read that QR code and basically convert it into a bitcoin address or a Bitcoin QR code. So you had to do a little bit of an extra step there was that

Carel van Wyk  
there was a little bit of creativity that we had to apply. So, so we had, we had the this powerful technology called lightning to address the issue of the sort of fast paced environment at a at a re like at the retail one of sale like it doesn't you can't wait for 10 minutes to pay for your groceries, right? And lightning solves all of these, these 10 minutes, if

Mike Peterson  
you're lucky, because when they first rolled it out here and the one store was only doing on chain, we waited like two hours one time, well, that because they didn't want us to leave till the payment confer. And,

Carel van Wyk  
you know, there's these guys out there that I respect a lot that says it's okay to do zero confirmation payments, then it can be fast that that wasn't really even the biggest problem. The biggest the biggest problem with Bitcoin payments is what happens when the when the the transaction fails after the payment was received. And it doesn't happen that often, but it does happen. Yeah, that's a big problem with an on chain transaction. Whereas with lightning, you have this, there's this thing called a hollow invoice, right? So you can receive a payment, and it's a bit like an escrow, and then the merchant can give you, like a final thumbs up or a thumbs down. If they give thumbs up, then you settle it, and if they give a thumbs down, you just void that old transaction, and the funds are returned to the lighting wallet. And if you don't have that, you can't do retail payments. So on chain just doesn't work. Whatever the arguments run, zero, conf, whatever. But so that, so technically it worked really well on the transaction side of things, but we had to initiate the transaction. And you remember I talked about SNAP scan, yeah. So that snap scan thing became popular, and when something becomes popular, it gets a competent competitor, and then it gets another competitor, and then another competitor. So we ended up in this ecosystem where they were like 10 QR payment Fiat, QR payment apps, and the merchant said, This is not a great experience. So we the merchant, we will issue the QR code. So the problem with that is, pick and pay is not going to display a lightning invoice. They won't display a lighting invoice at the point of sale. So I like, I like this analogy, being in El Salvador, I speak Afrikaans first that's Afrikaans my first language, home language, English, my second language. So if you ask me to speak Spanish, no, no, I'm like, no, please. But I walk around with Google translator, and then I stick it into people's faces, and I'm like, please. Can you speak? And then I read the text, and then I understand them. So we needed to translate this pick and pay your coat into a lighting invoice. And. And the way it works is we publish a QR code reader, a pick and pay QR code reader, so it can read the pick and pay QR code but it's also because it's connected to our system, able to convert that transaction information, the payment instruction, into a lightning invoice, and then it it launches your lighting wallet for you. You pick the lightning wallet that you want to use, and it launches the lightning wallet and you can pay. So it's pretty seamless, but it's still a hassle because you still need the QR code scanner first and then your lighting wallet. And I think that's been injuring adoption from the consumer side, and also it confuses the teller, because they're like, they're not quite sure what's going on. And, yeah, that's, that's a problem that we had, but we managed to find a pretty creative solution to that. So

Mike Peterson  
explain that what, what that solution was to address. So,

Carel van Wyk  
so, so maybe just worth mentioning that we this, this, this whole thing was deployed in February last year. So that's now about like, let's, let's call it two years, basically a year and nine months, whatever. It must

Mike Peterson  
been deployed a little bit earlier, because I was there in January. Yeah, but

Carel van Wyk  
you were the, you were one of the privileged people at the muscle Bay. Okay, that was that test, the test site. So we've been sitting with this problem for a long time, thinking about solutions, not being able to come up with a good solution. And then this conference, I applied for speaker. I felt like I had to be like I felt when I read the title, crossing the chasm. I gave a talk at adopting Bitcoin Cape Town earlier this year. Title of my talk was bridging the chasm. And it's not from the the that book about technology, technology adoption. It's actually from a speech from Nelson Mandela, our first democratic president. When he was inaugurated, he gave this beautiful speech, and he said, we we live in a society that's divided, and the the time to bridge the chasm has come, and the time to build is upon us. That's always like, stuck with me. Time to build. This upon us. It's time to build. And then I read, Crossing the Chasm El Salvador, and I was like, I'm gonna go to El Salvador. I need to go. This is my pilgrimage. I decided, Okay, I'm gonna go. So now I'm speaking to the organizers. I'm speaking to comal from Galloway, Galloway publishers building blink, a published blink wallet, and we're just talking, I'm talking about this problem that we're having, and he's like, Well, why don't we talk to one of our developers and we can discuss it with him. Maybe he's got an idea you accept with your video call. So now it's myself, my co founder, comal, and the blink developer, and they're in Central America and we're in South Africa. It's this cross Atlantic video call, and the dev says, Yeah, I can solve your problem for you. And my co founder and I were like, Who's this guy? And he says, No, because from blink side, he's also been thinking about this problem of how to pay a proprietary QR code, you know, a non lightning QR code, yeah. And he thinks he's come up with something interesting, because you've, you've got this thing called a pay code, a lightning address, like an email address, right? So with the lightning invoice, it's something that we generate on the spot, right? You enter the amount, and you generate it's valid for a little limited amount of time. With a pay code, that's something you can pay any time. And so what he says is that if we just use the the data in that QR code as sort of the the username, it gets a bit complex. We can maybe, like, explain it in code, or whatever. You can look. You can go look, it's open source code. So you can go look at the source code, and the code change. It's very simple. You just take the QR code data and you create a pay code with it. So money badger creates a pay code for every single we can pay transaction, so that when you scan it with the lighting wallet, the lighting wallet just thinks it's a normal pay code, and then at that point in time, it makes a call to the money badger server, and the money badger server just responds as if it's a normal pay code. And the way that it works is the money badger server gets this request from the. A lightning wallet, and that at that point in time, it just asks pick and pay for the payment information, and when it gets it sends it back. So it's like this seamless integration, and we no longer need this secondary QR code scanning app all. All the blink wallet needs to do is it scans the code and it looks for an identifier that identifies you can pay. So it looks for pick and pay in the code, and if it sees it, it just takes that data at money badger and the Pay Code. So

Mike Peterson  
that was they had to make a change to the blink wallet in order for it to

Carel van Wyk  
Yeah, to make a change the blink wallet. But it's what we call a non controversial change. So my co founder and I, we actually pitched a different solution. We said, well, we'll publish an API, and then you can, you can add a change in your wallet that uses our API. And he said, we can't really do that. You know, it's a global wallet, so we can't really integrate, like a South African proprietary API, but this PAY CODE thing is going to work. So he, I think he implemented that in a day. We built the beta app. The next day, we walked into pick and pay the next day and paid into it. So just with the

Mike Peterson  
blank wallet, you can scan the exactly anybody the QR code, that's not, that's not a, it's not a lightning QR code. It's not lightning QR code, but, but the wallet, the blink law, automatically exactly does everything on the back end, and you just pay it. So for the users experience, it's just,

Carel van Wyk  
it's streamless, it's seamless and streamlined. But the the real magic is that the code being open source and non controversial or non invasive means that code can now be copied, copy, paste, every single lightning wallet, whether it's custodial or non custodial, it's it'll work with anyone and

Mike Peterson  
have any other wallets implemented it

Carel van Wyk  
yet. There's one that I know of, a self custodial one called Blitz wallet, okay? And then I expect, I expect others will follow any, any wallet with users of Africa can serve their customers better by integrating this change. And it's like at the simplest level, it's it's basically like three lines of code. It's not a complex thing. It's a very simple change.

Mike Peterson  
So bringing this back to El Salvador, one of the biggest frustrations and challenges here has been with the chief of wallet and for a lot of different reasons, but one is within the chief of wild wallet, there is their proprietary pay code that's that has nothing to do with Bitcoin and but the the cashiers or the people think that it's Bitcoin because it's in the chival wall. But instead of creating a Bitcoin invoice, it creates a Chivo invoice. And so cure, Chivo, QR and so Bitcoiners come from around the world. How great we can play Bitcoin here. They create this and from the those particular businesses want to receive dollars, and they don't understand they could receive it as Bitcoin convert it to dollars, right? But they're in this to receive

Carel van Wyk  
the dollar. They don't want to go through the steps,

Mike Peterson  
so, so they're like, No, this is the only way you can pay with Bitcoin. And you you know, you try to explain them, that's not Bitcoin, but you know, they don't get it. So is there an easy way for us to solve this issue? Because it really it causes a lot of confusion, it makes people frustrated, and they stop trying to use Bitcoin because they keep running into these roadblocks. And so what with what you guys have developed, is there a solution, and would it require something on Chivo side, or is it something that just the wallets could implement, where they could read that Chivo QR code and be able to interact with it? So

Carel van Wyk  
I think if the if the problem was a technology problem, then the answer is, with this new approach that the blink developer, I don't come up with this, it's the blink developer that can he gets all the credit. I would say his name, but I'm afraid of like he's, I don't want to maybe private, yeah, but, but we'll write some stuff about it. If people go and read blogs, then they we can, with his permission, make sure he gets credit. Make sure he gets credit all the blink. David, people know it is so I'm sure like but with this solution that he came up with, from a technological point of view, I don't think it would require that much work for blink to be able to scan achieve OKR code and complete the payment. But at the same time, I don't think it's a tech problem. Sounds like it's more like a bureaucratic problem or a problem of bureaucracy. And maybe politics,

Mike Peterson  
because Chiba would have to make a change on their side to

Carel van Wyk  
so what you would need is, if you look at the pick and pay scenario, you have pick and pay. And then pick and pay works with a Bitcoin payment gateway. Money badger is the Bitcoin payment gateway for pick and pay, and then money badger connects pick and pay to the Bitcoin Lightning Network. So for Chivo, it would have to be the same jivo, and then it would need a Bitcoin payment gateway, and then that would connect it to the network. And if that payment gateway exists and it supports the Pay Code standard, then any lightning wallet will be able to pay Chivo via the gateway. So jivo would need to expose some API, or, you know, have some relationship with this gateway, so that it's possible to create, and I mean, from it again, from a tech perspective, it's easy, yeah, but you need permission, because Jiva is a permission system. Unlike open source, that's permissionless. I think that's worth mentioning, is that we built a system on Bitcoin, which is a permissionless open thing, right? It's built on a foundation of freedom, and only because of that, the blink developer was able to, you know, contribute to the project. But if this whole thing was built like Visa, MasterCard by bureaucrats and bean counters like you would never have been empowered

Mike Peterson  
to do that. There'd be a walled garden. There's no way wild garden. Yeah,

Carel van Wyk  
and it sounds to me like Chiva, at this stage, is a bit of a walled garden. So unless you, like, break down one of these walls a little bit, it's going to be very difficult to get in there. But from a tech perspective, it's, I think it's trivial.

Mike Peterson  
So the solutions there, we need to get Chivo on board and get so we need

Carel van Wyk  
that champion, yeah, we need that executive with a future vision, but that can approach risk in a level headed fashion, instead of just saying, I don't know, I don't understand the motivations behind it, so I can't comment. Yeah, yeah.

Mike Peterson  
So where do you see money badger going from here? What's going to be your guys focus?

Carel van Wyk  
Yeah, that's, that's actually quite a difficult question, because money, money badger, for me, it being something that's, that's like a project from the heart, maybe instead of from the head, I'd like to see money badger solve the problems that we have in South Africa. But I also expect that our government is going to start making it more difficult for us to do what we do. There's some there's some indication that we're going into a direction where things like self custody will become more difficult and in some cases potentially impossible, like for an organization or an individual, might be limited by that exchange control allowance and a business, it would become very difficult, or maybe even impossible to self custody and and if I look at that, then the future for money badger in South Africa becomes, you know, I have to question it a little bit. But the technology is solid. The team is solid. And there are other places in the world that seem like they want to do the same things that we're doing, and we're doing it in a, in a, in a in a way that I think is really good, because we have years and years and years of experience doing it and also doing it in a way that's not so good. Yeah. So we've learned the lessons we know how not to do it, and we've got a lot of data, real world users, using it in South Africa. So we understand the problem well. We understand the solution well. And we're also good at, at this stage, doing like business development and commercials and legals and all the stuff that goes with it. So I think at this point, I'm thinking about all the other places that we could maybe also operate. And I was speaking to a guy called Jorge. That's his name from from a place called prospera. I haven't really read about it too much being in South Africa, and he is convincing me that I should incorporate something there, and then we can, from there, expand globally. So I think for money, badger, we're going to keep doing what you're doing in South Africa. We've got pending contracts with payment providers for tier one. And tier two retailers for merchant, aggregators and E commerce. We've got a lot of potential to expand in South Africa, but it's like Elon Musk saying, you know, we need to become a multi planetary species. I think for our survival, we're going to have to become a multinational, yeah, company.

Mike Peterson  
So the I know the Blake team recently moved their domicile to to prosper, yeah, look this. It's, if you came in, I came in E resident of them, and it's really simple and very fast. And I've never done anything with any government before that, like, because they run like a business, like they're there for customer service, like it's all straightforward, and

Carel van Wyk  
it sounds to be to be true, yeah, yeah. And like I said, I'm a very skeptical person, so I have that same feeling, that same hesitation and

Mike Peterson  
the word sort of reluctance, yeah,

Carel van Wyk  
that I had when I first heard and read about Bitcoin. And I'm, like, skeptical, so I'm hoping that I'm wrong.

Mike Peterson  
I know a big group is going to depress I'd love to go,

Carel van Wyk  
but unfortunately, yeah, that's fine now, yeah, but I'll go there in the future. Yeah,

Mike Peterson  
no, it's it's a very interesting to have that private city that has its own laws and own regulations, and it's very business friendly. And if

Carel van Wyk  
it's business friendly, and I think that the one of the let's, let's call it like financial innovations. And I'm now, I haven't read up enough, so I'm like, completely talking, out of just the conversation I had last night, is the concept of Bitcoin as a unit of account and and I think that's necessary. And your your panel last night, you had a panel at the end of the conference yesterday's conference day, talking about a company that is Bitcoin only. But how do you, how do you, in practice, build and run a company that built on a Bitcoin standard, if you if your unit of account is not Bitcoin, yeah, like that. It's such a difficult problem, I almost want to stay away from it. But if you could use Bitcoin as a unit of account, then it changes the game. And as I understand prosperity, yes,

Mike Peterson  
it's the, I believe, the only jurisdiction world that will allow that even in El Salvador, where bitcoin is legal tender, you still have to do your accounting in dollars. And so even if you're receiving Bitcoin payment, you have to give the dollar value equivalent at that time where prosper. You don't have to even mention Fiat. It's everything's denominated in SATs. Well,

Carel van Wyk  
for a company that's a massive level of complexity that it's just eliminated, yeah, and it makes it a lot more viable. So that that really excites me. I'm very this. I'm so glad that I came to this conference, because I'm learning so much about the potential moving into the future, I actually came here a little bit depressed on Friday, just before my talk, I got news that South Africa. So there's this thing called the FATF travel rule. It's about when you move, when you make a crypto asset transaction, the personal information of the two entities, the recipient, the sender and the recipient needs to be shared between the two service providers,

Mike Peterson  
as long as one of them is like a money service business, right? Like,

Carel van Wyk  
yeah, but our government wants all crypto transactions, so even peer to peer, they don't like peer to peer, so they'll, they'll try to push everything

Mike Peterson  
to have to have an intermediary, yeah, to be between service

Carel van Wyk  
providers. We can talk about that, but, but when the draft regulations came out, I was involved in a response from our local industry association, and we spent a lot of time and effort on that thing, and we came up with good arguments. It's all available online. You can go read our response to the draft regulations. And the main argument that we made is that it's going to make our crypto asset industry in South Africa relatively less competitive to international players, because the restrictions are much more strict than than the same equivalent in in Europe or wherever. And at the same time, those travel rule service providers, there are, there are no local travel service providers, which means we're going to be paying international entities, and we're also subject to the Exchange controls to pay them. So there's going to be all like Reserve Bank component. It's extremely complicated, and it's going to add a ton of red tape and overhead to the local industry. Anyway. Long story short, we said. At this response. We expected that they will at least look at it, but as I understand, I got a message on Friday and they said they basically just published the regulations as it was in the draft. They paid no attention to our comments. And that didn't feel so good. And then, you know, actually struggled through my talk a little bit. I just, I just felt down. And then last night, speaking to Lucas from blink, speaking to Jorge from prospera, I started feeling like, maybe there's a bit of

Mike Peterson  
hope. I'm glad you came. I'm very glad,

Carel van Wyk  
okay, yeah, but I felt compelled to come. It's like I almost feel like it wasn't my decision.

Mike Peterson  
Have you been to El Santa yet? Yes, yes,

Carel van Wyk  
yes, yes, I have. So I did a quick road trip to Berlin. I nearly died because there's two roads to get there, and I took the wrong one, the bad one with with a bad car. So we nearly died. That

Mike Peterson  
was the first thing they told me to go there. Don't take the way that Google.

Carel van Wyk  
I blame Charlie, because he messaged me and he said, don't take the first one because it's the slow road. And then we took it by accident. And you know that sunk cost fallacy, so we had a sunk cost but we said, well, that's fine because it's the slow road. No, it's the Impossible Road. Is the road of death, so avoid it. And we met the most amazing people in Berlin, Patricia, Geraldo, Evelyn, Sebastian, sorry, I'm obviously mispronouncing their names, but we were instant friends. It was, like instant connection. Saw the Bitcoin Center there. I went to the Bitcoin Center. In my view, that's like the Bitcoin maker of the world, yeah. And then if you agree, but maybe you'll say it's Bitcoin

Mike Peterson  
beach. They say, Well, I think Bitcoin Beach was the original. And I

Carel van Wyk  
think, no, it's original, yeah, for sure. But that one is a bit more of like a journey, a journey so, and that's where this rabbit is from. So they, they painted these rabbits, and they're selling them for sets. And then I went to then we took the road back down to Bitcoin beach so that I'm staying there now, and we're here at the conference. Yeah, yeah, dude, I was at your house. You were because I had to give some stuff to Adam, okay, okay. When were you there? Two nights ago? I mean, okay, yeah, yeah, okay, but I didn't want to bother you. It was late. We arrived right, very late, okay, just need something from

Mike Peterson  
you. Have to come by again because you're

Carel van Wyk  
still, I'm still Thursday. I want to get a couple of surfing lessons, eat some people says, drink some smoothies, the

Mike Peterson  
barbecue one night. Yeah, yeah, okay. We don't have the proper Brie like you have in in South Africa. We cheat and use gas.

Carel van Wyk  
But it's fine. That was one of

Mike Peterson  
the things I loved the most about my time there was just like the bride and just used because I love campfires. Growing up, I always went camping and stuff like, like, campfire smoke. The whole time I was in South Africa,

Carel van Wyk  
exactly, and we were very particular about the type of wood that

Mike Peterson  
I was shocked. Everywhere you go, they have the firewood for the bride. Like you go to a gas station, you go,

Carel van Wyk  
you don't buy that. You don't buy that. You buy that. In an emergency, you forgot. You got guests coming over, and I don't have wood quickly, and you stand there, you prepared months in advance, because you need to get the right type of wood, and then you need to, like, prepare it, dry it, and everything. So, yeah.

Mike Peterson  
But even in the township, it was funny, they'd have these little stores that that only have, you know, very limited number of items. But one of them was the bundle of wood for their breasts, yeah?

Carel van Wyk  
And that's something that connects the cultures. Yeah, the cultures. There's a lot of cultural divides in Africa, but at the same time, there's a lot that the bride brings everybody. That brings us together. The bra is the one thing and the government's other thing, or the the this thing for government? Yeah, that way, yeah.

Mike Peterson  
But I've heard you guys have finally stopped the load sharing there.

Carel van Wyk  
Yeah, that's so So load shedding. Obviously, that's like a nice term for blackouts. And we went through a phase of really serious blackouts where we had up

Mike Peterson  
to it was just regular, and people were like, plan, oh, load, share, yeah.

Carel van Wyk  
So, you know, know this the schedule, yeah, at least, I mean, at least was organized blackouts, which is in some places it's unorganized, yeah. And so that's that somehow magically, just before our election. Because the problem went away. And so obviously there's a lot of conspiracy theories around it, but the truth, in my view, is actually more sad than the conspiracy theory, because if you go look at the numbers, the consumption of electricity went down during load shedding because of that significant energy issues. And what does that mean? It means our economy took a massive heat. Industrial consumers of electricity closed down, and then more unemployment, more unemployment, all of that, and and then as that's coming down, yes, there was a little bit of an improvement in the in the generation. But just because we don't have load shedding now doesn't mean that that problem went away. We're still like, at that critical level. And, and the the big problem now is we can't ramp up our industry again, so we're stuck. It's not that we can now, just that it's gone and solved. We're stuck. We can't ramp up, otherwise we'll be right back at load shedding. Yeah.

Mike Peterson  
So what's the what's the thing that's kind of surprised you the most about El Salvador?

Carel van Wyk  
Sure, that's a that's quite a tough question, because there's a lot that surprised me as, I mean, as I mean, as a Bitcoin of the thing that surprised me most is that I can literally live on a Bitcoin standard, and that's a fantastic feeling. It's indescribable. You have to be here to experience it. But I think the the thing that surprised me the most was people's dedication to this course, yeah, and the motivation and the energy that they put into this. And then, of course, the the other thing that is pertinent to South Africa as we deal with a lot of violent crime is this, I still don't believe it, but the story that I'm hearing about the country that went from extremely violent with an extreme violent crime,

Mike Peterson  
much higher murder rate than South Africa, yeah,

Carel van Wyk  
to something where people feel safe, yeah, if somebody tells me they feel Safe, that's not something that somebody lies about. And I think maybe that is, it's a, it's a bit of like a, it doesn't compute, for me, coming from South Africa, that it's possible to solve this big of a problem that quickly, and that's without it. There can be no building. It's, it's the first step to start building. Yeah, so Nelson Mandela saying, you know, the time to build is upon us. So the first step to building is making sure people feel safe enough,

Mike Peterson  
so that they on what they build won't be stolen from them or

Carel van Wyk  
taken, yeah, but it won't be broken down and destroyed. And that things can because the Bitcoin Center there that maybe this is the thing that surprised me the most, the Bitcoin Center in Berlin, the door is open. Anybody can walk in there, off the street, there's like an iPad, there's a block lock, there's a Bitcoin ATM, and that's kind of unheard of in South Africa. We would have access control or whatever. So I think there I got this feeling and sense of what's possible if people feel safe, then you can plant a seed and you can nurture it, and it can grow into something. It's not going to get cut down. If we can get that in South Africa, it'd be fantastic, but we don't have a President bukele,

Mike Peterson  
so maybe there's one, maybe there's one in the wings there somewhere maybe developed.

Carel van Wyk  
If El Salvador as a could be an example the rest of the world, then maybe we've got some hope.

Mike Peterson  
I think that's a good, good note to end on. I will throw in, if there's anybody from Chivo. Watching this podcast, we can look it up, get a hold of Carl. Easy. He can fix things for you. He's a can do guy,

Carel van Wyk  
yeah. Let me put it this way. I my co founder, and I know a lot of people in the tech space. I've worked with a lot of engineers, a lot of product builders, and I consider him to be the number one product builder I've ever met, certainly the top product builder in South Africa. And like as a global contender, he's like up there, and with this guy on my team, we can do anything do. But yeah. All right,

Mike Peterson  
Chivo team, yeah, get in contact. Then let's fix this mess. All right, where can people follow you? Where they can where can they find out more about money, badger or anything else you want to, you know? Highlight, yeah.

Carel van Wyk  
So we are on Master. I'm now of this conference, we're switching to nostr. We were on x, so on x, where money, badger, pay, not money badger, some other money, badgers. Money, badger pay. Money badger, pay, and on nostr, I think we're just money badger, yeah. And I'm sad I'm not wearing my money badger shirt today because I didn't know we were going to do the podcast, but the logo is a honey badger with a lightning tail. So if you say Honey Badger with a lightning strike in its tail, you've got the right nostr account, perfect.

Mike Peterson  
Yeah. And can people follow you personally? Or, yeah,

Carel van Wyk  
sure, if they want to follow me personally, it's fine, but I've got, like, a ton of imitators on x, so just make sure you get the right one. Now, how to explain this? My name is Carl. My surname is fun, vague. My x handle is C, A, R, E, L, V, W, y, k, if it's not that, it's one of my imposters, perfect. But if you go on money badger, I like comment on the money badger, pay post so you'll see you'll see me there.

Mike Peterson  
Perfect. Well, I'm looking forward to get back to South Africa. Unfortunately, I'm not going to be able to make it for the adopting this year, but, but hopefully next year we'll be by next year, we'll be empty nesters. My youngest will be off to school, so maybe my wife will be able to join me in South Africa next year.

Carel van Wyk  
Please come and yeah, always welcome.

Mike Peterson  
Awesome. All right, thanks, Carl, thank you.