Everyone’s crazy about all things digital – even currency, more commonly known as “bitcoin.” What is it? What does it mean for how we pay for things? What does it mean for development around the world? Our student fellow Taylor Stevens sat down with Sarah Martin to find out.

An expert in the fast-changing technological world of digital currency, Sarah Martin is the CEO of Boone Martin, a global consultancy specializing in financial technology, and the vice president of the Digital Currency Council, which works to support the development of the digital currency economy. Much of her work has centered on the potential of bitcoin and blockchain technology, which could have a profound effect on foreign development, economic equalization, and globalization.

In March 2015, Sarah launched the first annual Bitcoin Women’s Day, which coincided with International Women’s Day and Women’s History Month, as a way to recognize women’s contributions to bitcoin and cultivate their involvement in the digital currency economy. We sat down with Sarah to get a finger on the pulse of the digital currency field.

FPI: How would you explain bitcoin and blockchain technology to a third grader?

Bitcoin is email for money. Just like the Internet allows you to send information to anyone anywhere or Skype allows you to call a friend or family member anywhere worldwide, bitcoin allows you to send money to anyone anywhere virtually for free. In the same way that the Internet changed the game for communications and Skype did for international phone calls, bitcoin is transforming the way we think about money. Bitcoin is a digital currency, like a digital cash, and the blockchain is an accounting system that records all of the bitcoin transactions—basically who sent what to whom.

FPI: Bitcoin often produces connotations of hacking. How do these connotations play into your work, and what are some common misconceptions about bitcoin? 

When people hear the word ‘bitcoin,’ they typically think drugs and thugs. Bitcoin had a rough start, with a lot of focus on the online drug bazaar the Silk Road, as well as ransomware attacks by cybercriminals. Though the Silk Road has been shut down, it has certainly cast a long shadow. Ransomware is tricky because it really has nothing to do with bitcoin itself but more to do with cybercrime. That is, the bitcoin blockchain has never been hacked; it’s cryptographically secure. But cyberthugs do sometimes demand bitcoin payments when they hijack a computer using ransomware. This distinction isn’t always clear, which regrettably tends to tarnish views about bitcoin.

FPI: How can bitcoin revolutionize foreign development?

Bitcoin may profoundly impact international development in myriad ways, but we’ll focus just on two: 1) financial inclusion and 2) remittances. Two billion people currently exist outside the formal financial system. This means they rely primarily on cash not only for everyday transactions but also to save and manage their money. It’s hard to safeguard cash; there’s only so much you can put into a shoebox or shove under a mattress. A digital currency, like bitcoin, is one way to cryptographically store and protect your money, while also providing an onramp to a variety of financial services. Because it operates much like email, bitcoin also provides a way for people to quickly and cheaply send money to friends and family around the world. This is important for overseas foreign workers who send remittances home—expected to reach nearly $600 billion this year. It costs approximately 7 to 8 percent each time someone wants to send money overseas and can be more like 10 percent in sub-Saharan Africa. Using bitcoin, it costs more like 1 to 3 percent. This dramatic reduction means people can save more of their hard-earned money. The World Bank estimates that a 5 percent reduction in remittance fees could save in aggregate $16 billion.

FPI: In what other ways could bitcoin prove to be revolutionary?

Governments, like the U.K., the Philippines, and China, are keen to explore digital currency to see whether they might use the technology to automate public sector services, like distributing social benefits or collecting taxes (among other things). What’s unclear at this stage is how governments such as these might use blockchain technology. For instance, the bitcoin blockchain is a fully public recording system, meaning that anyone anywhere can see all of the bitcoin transactions, akin to a globally-shared Google Excel spreadsheet. If a government were to adopt a like system, citizens would be able to see all of the inflows and outflows of public funds. This kind of transparency would be a boon to government accountability and help guard against corruption and issues with leakage.

FPI: Where do you see global digital currency shifting in the next five years (whether that involves bitcoin or not)?
No idea. I’m wary of making predictions since I’m usually wrong—and if you were to have asked me five years ago whether I would be involved with something called ‘bitcoin,’ I would have thought you were coo-coo bananas. My hope, however, is that digital currency plays a role in the developing world. Right now, large financial institutions in the OECD (the Organisation for Economic Co-operation and Development) are investing heavily in blockchain technology—undoubtedly a benefit to the industry as a whole. But I see greater opportunity for people who don’t have access to those institutions but may want services like a safe place to store their money or access products like credit and savings or insurance. Most of the under-served live in developing countries, and even among those with bank accounts we find disparities between men and women and those in rural versus urban areas. Bitcoin provides a chance to level the playing field, to equalize access to financial services regardless of income, gender, or geographic location. This is my wish for the next five years.

FPI: What drew you to the digital currency field?

I got excited about mobile money while working in post-earthquake Haiti, where financial institutions had literally been wiped out and handling cash was really insecure. It was amazing to me that in a place where so much of the physical infrastructure—roads, buildings, business, and government services—had been decimated, people still had mobile phones and were able to conduct basic peer-to-peer payment transactions. When I later heard about bitcoin, I was stunned that there might be a system that could be even better: a low-cost, global platform that operated more like an Internet for money. It was crazy to me that no one was talking about it. These were the early days, and bitcoin was still pretty volatile and rife with scandal. But it was clear to me that a lot of people a lot smarter than I believed in the technology, so I decided to stick with it, learn as much as possible, and see if there was a chance that it could make a meaningful difference.

FPI: In 2015, you launched the first Bitcoin Women’s Day to celebrate women’s achievements in the digital currency industry. Why did you feel like that was important to do?

It’s no secret that there aren’t as many women as men in the finance or technology fields, much less the newly coined “financial technology” sector. The nascent digital currency industry, which falls under the umbrella of ‘financial technology,’ has yet to attract large numbers of women. But focusing on small numbers or percentages sometimes overshadows the superstar women who are real leaders in the field. We launched Bitcoin Women’s Day not only to highlight their accomplishments, but also to encourage women and girls around the world to check out this new industry. We are on the cusp of a brand new field, and we need all of the best minds to help us accelerate this technology. Bitcoin Women’s Day was a tremendous success and we were awed by the outpouring of support. My hope is that everyone—men and women—will come see what bitcoin is all about and investigate opportunities in this growing sector.

FPI: What advice do you have for future and fellow female interruptors in the foreign policy field?

“Yes, and.” “Yes, and” is an improv comedy technique where you accept whatever situation you’re presented with and then offer something new. When I first started out, I worried a lot about making the right decisions—the right jobs, the right promotions, moving up the right foreign policy career ladder. But I later realized that my professional life, as with life itself, is much more improvisational than that, and the best decision I could make was to always say “Yes” to opportunities and then add an “and” with a new idea, approach, or solution. Ever since I switched my perspective to “yes, and,” I’ve noticed my career flow more freely. “Yes, and” is about sticking your neck out by saying “Yes,” and being brave enough to offer something novel. I encourage everyone to give it a shot. Improvisation is just that—you may not always get it right, but even if you don’t, you can just improvise.