ceca idea

unaceca/idea.md

@@ -18,7 +18,7 @@ Motivations specific to Bitcoin sellers:
 
 Motivations for any of the two:
 - They want to exchange P2P and don't like going through digital fiat systems.
-- They don't have access to banking system.
+- They don't have access to the banking system.
 - Appreciate massively the privacy and are willing to go the extra mile to leave no trace.
 
 But executing this trade is rather hard. Main problems and frictions:
@@ -39,11 +39,27 @@ But executing this trade is rather hard. Main problems and frictions:
 
 ### Cash by mail markets
 
+Some of the existing P2P markets such as Bisq, Robosats, Peach, etc. offer cash by mail options as a payment option for the fiat side of the trade.
+
+The amount of liquidity present for such type of trade is anecdotal. Nobody uses it because it's a pain in the ass.
+
+Furthermore, all of those P2P exchanges have experiences that focus heavily on digital fiat <-> Bitcoin trades. The specific needs for cash driven trades have been neglected, and their rules and trade protocols are digital first, cash after.
+
+Finally, they don't do a good work at tackling the trust component. They either resort to inadequate multisig bonds (Bisq) or rely on easily gameable reputation systems (Peach).
+
 ### Vexl
 
-### Informal networks
+### Informal networks around meetups and communities
 
-### Limitations and issues of the current solutions
+Informal networks are very hard to assess since no one has a good global vision on them.
+
+Luckily, I've had the chance to witness and perform myself quite a few trades in the Barcelona community. My opinion is that, once there's a sufficient critical mass of a few hundred people gathered around a community, trade does happen regularly and with decent volume. I have no way to confirm this, but I would bet in the past 24 months, member of the Barcelona community might have traded at least 10,000€ per month.
+
+Informal networks do a great job in the trust side. The time shared in meatspace together, long-term relationships and shared network of frens both creates a high price for being a bad peer (you will be finger pointed and expelled) and provides security and trust to members of the community.
+
+Where the informal networks don't shine is in reducing the matchmaking friction. The lack of a formal orderbook means performing a trade requires the initiating peer get in touch with many others to try to assess his options until he finds or negotiates a proper trade with some peer. It's cumbersome.
+
+Furthermore, trust is not leveraged to the max. There might be members of the community that do not know each other, yet are both reliable and have common contacts that would justify a social bond, thus they would be happy to trade. But, if the social graph doesn't promote them connecting, they will never trade.
 
 ## unaceca proposal
 
@@ -78,16 +94,79 @@ But executing this trade is rather hard. Main problems and frictions:
   - A2: the ceca would need a significant size and notoriousness before it draws poor attention.
   - A3: private nature keeps it laying low for longer, makes it harder for the wrong kind of eyes to find it.
   - A4: could be, fuck 'em. Nothing lasts forever.
+- Q: This feels very close to Velx.
 - Q: This faces a bootstrapping problem.
   - A: Yes, see section below dealing with the topic.
-
+- Q: Cool, how do we monetize.
+  - A: Couple options, see section below dealing with the topic.
 
 ### Monetizing
 
+I see four paths to monetizing:
+
+- Charge for membership
+  - Rather simple: want to access the ceca, pay.
+  - There could be multiple levels of membership with different prices and features
+  - Providing free trials at the start probably makes sense to entice users and to let them come in and see what the whole thing is about before deciding if it's worth the money we ask for.
+- Cry for grants
+  - Sponsor and promote unaceca as FOSS project that enables communities to organize their trading.
+  - Beg for money
+- Provide a SaaS offering to run cecas
+  - We offer ceca-as-a-service to other meetups and communities.
+- Complementary services
+  - The ceca is a good hub for hardcore bitcoiners. It could be that the ceca itself remains free, but interesting services can be built around the community.
+
 ### Dealing with the market bootstrapping
 
+The biggest challenge for a ceca to actually work is bootstraping it. Good old chicken and egg: no users, so people don't want to join, and viceversa.
+
+How to ensure a critical mass at the start? For Barcelona, I would propose the following:
+- Prepare the cecabarcelona instance.
+- Reach all frens and contacts that could be interesting. Explain our plans, get them on board to join the ceca and use it. Give them invites for their own frens.
+- Make a select group of frens VIPs and let them join and post offers before launch day.
+- Run a meetup to present the ceca in Barcelona. Have the instance ready by then. Align everything to make that day the date of launch. Provide invites to all meetup participants.
+- After launch, post a lot of offers ourselves to give the market some depth.
+- Shitpost and spam in Barcelona channels and communities, reminders to frens.
+- cross fringers and pray the gods of social propagation
+
+Outside of Barcelona? Hard stuff. Best option is to have straight contact with leadership of a community and earn their trust so that the same kind of playbook can be run with their support and blessing.
+
 ### Why is a ceca better than current alternatives
 
+- Trust:
+    - A ceca leverages an existing social network where trust is already present. 
+    - The invite only system prevents spammers to enter easily.
+- Friction reduction:
+    - Since the ceca is only intended to support cash <-> bitcoin trading, design choices would always prioritise the needs of this kind of trader.
+    - Locations by offer, including time availability features, cash preferences, etc. are features that ceca can offer that other solutions don't.
+    - Forcing users to specify their terms provides other peers clarity (no need to have back and forth to find out what the other peer is willing to do) + makes offers searchable, enabling interested traders to find the most suitable offer in the crowd
+
 ### Rough features&business roadmap
 
-### Risks
+- Alpha
+    - Basic features
+    - Only local testing
+- Beta
+    - We open it up to 5 frens to have someone else fiddling
+    - Apply bugfixes, low hanging fruit feedback from frens
+- cecabarcelona launch
+    - We prepare a serious, production grade instance
+    - We go public big time in Barcelona with a meetup dedicated to present cecabarcelona
+    - We spam the shit out of everyone we know in Barcelona that is a good candidate with invites and call to actions
+    - Milestones to complete before moving on:
+        - 300 users have signed up
+        - Active users per month is consistently above 30 users after payment subscription kicks in
+    - Implement admin features from the learnings of running this ceca
+
+If we get this far, we might be on to something. Options after:
+- launch other cecas in spain and run them ourselves
+- offer ceca running as a SaaS and promote it hard across meetups scene worldwide
+- try to launch some ceca spin-off to tackle cash by mail markets
+- chase grants: make repo public, make brand for FOSS project, make some noise so it catches attention and awareness grows
+
+### Risks
+
+- Ceca size and sufficient liquidity
+- Users just don't like it / don't feel it's worth what we ask for it
+- Bad rep due to scammers sneaking in
+- 0 grants obtained