Crypto Utopia in Puerto Rico: Digital evangelism or disaster capitalism?

I’ve always had a natural aversion against certain brand of California techbros. They usually feature a unique combination of entitlement, privilege and confidence that allows them to make spectacularly tone-deaf statements. Kony 2012 is a good example of the white-dude techno-messianic saviour complex at work, where some entitled guys thought they could bring down an Ugandan war criminal through the power of clicktivism.

The New York Times has published the latest example of cyber-colonialism in a jaw-dropping article describing a group of cryptocurrency enthusiasts that have moved to Puerto Rico to take advantage of its unique situation in order to bring about their Crypto-Utopia. The article explains:

“Dozens of entrepreneurs, made newly wealthy by blockchain and cryptocurrencies, are heading en masse to Puerto Rico this winter. They are selling their homes and cars in California and establishing residency on the Caribbean island in hopes of avoiding what they see as onerous state and federal taxes on their growing fortunes, some of which now reach into the billions of dollars.

And these men — because they are almost exclusively men — have a plan for what to do with the wealth: They want to build a crypto utopia, a new city where the money is virtual and the contracts are all public, to show the rest of the world what a crypto future could look like. Blockchain, a digital ledger that forms the basis of virtual currencies, has the potential to reinvent society — and the Puertopians want to prove it.”

So, taking advantage of the low taxes, these crypto-millionaires will use their wealth to build a city based on Bitcoin and blockchains, buying cheap land that will allow them to build the ultimate techbro Libertarian utopia (impossibly called Puertopia). The idea is to benefit the local economy, which has been destroyed by Hurricane Maria, and they will do so by building and using blockchains for everything, including airports, residences, businesses and banks.

Laudable goals, right? What could possibly be wrong with this?

I don’t know where to begin. Perhaps it is the fact that one of the proponents of the scheme called the combination of events that led to their move to Puerto Rico a “perfect storm”, yes, a perfect storm that killed over 100 people and destroyed the island’s infrastructure. Or perhaps it is the fact that these Bitcoiners are setting up an energy-heavy enterprise in an island that had all of its power knocked down by the hurricane, and where power is still not fully back to normal (in fact they complain that they cannot mine BTC reliably). Or could it be perhaps the fact that the reason why Puerto Rico does not have the same tax regime as mainland USA has to do with the troubled relationship between the island and the US government. Or maybe it is the smugness of entitled white dudes walking into a place thinking they own it and can do what they fell like, buying the place and setting up their own rules.

This is what makes the story so infuriating for people from the global south. It reeks of condescension, they may be surprised that Puerto Ricans have access to the Internet, and can use cryptocurrencies if they want to, no need for these saviours to impart their sacred knowledge to the primitive locals.

But to me the worst part of the story is that here we have a textbook case of what Naomi Klein calls “disaster capitalism” in the book “The Shock Doctrine“. In short, Klein documents several examples in which capitalists take advantage of disasters (natural and man-made) to make a profit from the ensuing chaos, usually by taking advantage of the plight of survivors who are so desperate that they will agree to anything in exchange for a few bucks. And shockingly, the Bitcoiners are quite open about their intentions, it is right there in their own words: “It’s only when everything’s been swept away that you can make a case for rebuilding from the ground up […]” So convenient that all those people died so that you could buy cheap land in which to build your utopia.

Hopefully the locals are not too keen on what they see as “crypto-capitalism”. Andria Satz, who works for the Conservation Trust of Puerto Rico, said:

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

And this is the crux of the problem. But also history is not on the favour of the crypto-colonialists, they could be joining a long line of similar failed libertarian and colonial experiments. Only time will tell.