Monday, April 22, 2024

    Puerto Rico: Future Blockchain Utopia?

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    A group of cryptocurrency entrepreneurs have moved to Puerto Rico with the goal of setting up a libertarian utopia. The settlement was originally named Puertopia but now is known as Sol. The name change is thought to have followed the would-be community’s founders discovering that Puertopia literally translates to “eternal boy playground” in Latin – certainly not the kind of branding the group is seeking.

    Lured by the promise of freedom, waves of cryptocurrency entrepreneurs have been moving to Puerto Rico this winter following Hurricane Maria which desecrated the infrastructure there in September. They’re led by Brock Pierce, the director of the Bitcoin Foundation and founder of Block.One.

    The entrepreneurs are hoping to transform the island of Puerto Rico along libertarian principles. The desperation created by the social upheaval of the natural disaster last autumn has prompted some to welcome the early cryptocurrency advocates (or the money they bring with them). With few other influxes of outside capital, it’s hoped that the idea of a crypto utopia will allow for much-needed infrastructure improvements and repairs.

    According to the New York Times, the government of Puerto Rico is receptive to the influx of new money that the crypto entrepreneurs are bringing with them. This is evidenced by the fact that the governor has agreed to speak at the group’s blockchain summit conference called Puerto Crypto. The event is scheduled for this March. What’s more, the entrepreneurs currently living in what they hope will become “Sol” have almost managed to convince local government to allow the founding of a crypto bank – surely, an oxymoron of an idea if ever there was one.

    Erika Medina-Vecchini, the chief business development officer for the Department of Economic Development and Commerce espoused further positive sentiment about the idea of new money coming to Puerto Rico courtesy of Sol. She told the New York Times:

    “We’re open for crypto business.”

    Those who have sought refuge in Puerto Rico spend their days hunting for property to buy out and transform in line with their vision of a utopia. For now, the community hub is a 20,000 square foot hotel complex that the group are renting. The building has been dubbed the Monastery.

    One of the first tasks for the community will be to restore the electricity infrastructure that has been inconsistent thanks to the hurricane. The incentive to do so is obvious. Not only will it make living on the island far more comfortable for those used to First World luxuries but it will allow for cryptocurrency mining, an endeavour many inhabitants have made their fortunes from. Naturally, this will benefit those native to the island too.

    However, not everyone is pleased with the developments on Puerto Rico. Andria Satz, a worker at the Conservation Trust of Puerto Rico has her reservations about the group’s incentives:

    “We’re the tax playground for the rich… We’re the test case for anyone who wants to experiment. Outsiders get tax exemptions, and locals can’t get permits.”

    Whilst the group currently express altruistic ambitions for Sol and Puerto Rico, it’s unclear how genuine this sentiment is. There are certainly clear incentives for the libertarian-minded entrepreneurs to flash some cash to set up a community there. For one, citizens of the island do not need to pay Federal personal income taxes or capital gains. They will also benefit from hugely favourable business taxation too. Possibly the most alluring prospect about the site they’ve decided to call home is the fact that they don’t even need to renounce their US citizenship to relocate there. If the community completely fails, they can always jump on the next plane back to the States, where the crypto community should supposedly regulate itself.

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