Dollars can be hard to come by for members of the Oglala Lakota Nation.
The tribe’s Pine Ridge reservation encompasses all of Shannon County, South Dakota, the second-poorest county in the country, where residents earn an average yearly salary of less than $8,000.
One man is trying to change that. Payu Harris, a 38-year-old dad who once operated a video store on the reservation, has launched a cryptocurrency protocol he hopes revolutionizes the way the tribe views money and how governments interact with sovereign tribal nations. The Lakota Nation is the first tribe to launch its own cryptocurrency.
Harris, who is Northern Cheyenne, calls the currency MazaCoin. It’s a play on the Lakota words “Maza Ska,” or “iron and white.” Harris believes the coin, which is similar to Bitcoin and other popular cryptocurrencies, will help alleviate poverty on the reservation.
“This is a paradigm shift for tribal economies,” he said. “This could be the next buffalo.”
Yet MazaCoin comes as cryptocurrencies around the globe are under scrutiny. Economists warn that such programs are volatile and could lead to substantial financial loss. Spokespeople for the Lakota Nation declined to comment for this story, and calls to the Harvard Project on American Indian Economic Development went unreturned.
Below, Indian Country Today Media Network turns to Harris and experts on cryptocurrencies to clear up some confusion surrounding the MazaCoin.
What is cryptocurrency?
Cryptocurrency is a digital, peer-to-peer currency that is accessible online. It is based on cryptographic computer software that runs advanced protocols and is more secure than dollars in a bank account, writes Michael Nielsen, a scientist and programmer who studies how cryptocurrencies work.
Transactions are completed by assigning serial numbers to digital currency, eliminating the role of a bank and the idea of a single organization in charge of money, Nielsen writes. In theory, cryptocurrency provides a more secure, decentralized financial system and eliminates fraud.
When did cryptocurrency come to fruition?
Anonymous researchers worked for two decades on the technology, which surfaced in 2009 with the launch of the first cryptocurrency, the Bitcoin, writes Marc Andreessen, whose venture capital firm invested nearly $50 million in Bitcoin-related start-up companies.
“Bitcoin gives us, for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer,” Andreessen writes.
How can I get MazaCoin?
There are two ways people get MazaCoin, Harris told ICTMN. The first way is to trade dollars for digital currency or accept payment in MazaCoin for goods or services. The second way is to “mine” MazaCoin, or connect your computer to the network and help process and validate transactions. Miners earn MazaCoin in exchange for their efforts.
How can I use MazaCoin on the Pine Ridge reservation?
Look for merchants that accept MazaCoin. If you are a merchant, consider accepting digital currency as payment. Once you open a MazaCoin account – or virtual wallet – you can make and receive payments using a smart phone or laptop.
“We want this to be daily usage,” Harris said. “It will spend just like any other currency.”
How does cryptocurrency meet the goals of a tribal nation?
Developing currency is a way for tribes to maintain sovereignty, Harris said. Sovereign nations have flags, constitutions, postal services and nationally recognized currency. With the MazaCoin, the “international community will look at us and realize we’re serious about our sovereignty,” he said. “Having our own currency would have a stabilizing effect.”
What are the advantages of MazaCoin?
Harris believes MazaCoin will help alleviate poverty by propelling the Lakota Nation into the global market. Beginning with casinos and pow wows, individuals can purchase goods or services with MazaCoin. The tribe ultimately can pay state and federal taxes with MazaCoin, securing its place as a sovereign nation.
“This is going to be the next generation of payment processing, investments, currency transactions,” he said. “We will become the working model for a world-wide embracement of cryptocurrencies in general.”
What are the disadvantages of MazaCoin?
John Carter McKnight, a sociology research associate at England’s Lancaster University, cautions against the use of cryptocurrencies. McKnight is researching alternative currencies for tribal nations.
“You’re buying something that’s not really useful as a medium of exchange,” he said. “Even as an investment, it’s incredibly speculative.”
McKnight believes cryptocurrency is a bad fit for tribes, which can’t afford to invest in anything that changes in value 15 to 20 percent every day.
“This is a way to step outside the financial system and protect tribal assets from government interference, but I don’t think anything can be more wrong,” he said. “I think it’s a recipe for a bad time and people losing their money.”
What is expected from the MazaCoin in the next year? Ten years?
Within the first year, Harris hopes to see MazaCoin be a major payment option on the reservation. Harris believes as many as 50 percent of merchants will buy into the system within the first 12 months. Within 10 years, he wants to see cryptocurrency rise to an international standard for Indigenous groups.
“We want this to be a go-to standard for Indigenous,” he said.
What alternatives are there for tribes?
While McKnight warns against cryptocurrencies for tribes, he believes alternative currency can be a strong concept. He points to impoverished communities in England that print paper money and keep it in local circulation, supporting small businesses and building solidarity.
McKnight agrees with the ideas behind cryptocurrency – keeping money local and promoting financial and technical literacy – but he does not believe the MazaCoin is a good move for the Lakota Nation.
“Alternative finance arrangement for tribes is brilliant and can be transformative,” he said. “Building sovereignty is a good idea, but for a community that doesn’t have money to blow, I don’t know that I would consider cryptocurrency a responsible decision.”