Bitcoin entrepreneurs want to rebuild Puerto Rico as cryptocurrency-fuelled economy. Would that help or hurt the devastated country?

“Cryptocurrency entrepreneurs have moved to Puerto Rico to build a crypto utopia – initially dubbed Puertopia but now named Sol – where they plan to pay little in taxes. brp>The crypto expats also hope to demonstrate how the city of the future will look with blockchain methods used for most transactions alongside the development of a new digital cryptocurrency…”
“…Crypto-colonialism originally referred to countries, such as Greece and Thailand, seeking to acquire political independence at the expense of massive economic dependence. And it used the original meaning of the word “crypto” – concealed, hidden or secret. Such countries are nominally independent, but their national culture is refashioned to suit foreign models. The term colonialism in this sense is not overt at the point of a gun, but covert through the subversion of norms and cultures.
Notably, this definition of crypto-colonialism remains applicable to the socioeconomic consequences of crypto utopia…”

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Crypto land
“…There is a deep link between libertarianism and the cryptocurrency movement. Cryptocurrencies such as Bitcoin rely on a decentralised, extralegal and unregulated approach. But while the crypto billionaires will enjoy their Caribbean playground, poorer locals with little knowledge of the technology will be excluded.
The mostly male entrepreneurs, who moved to Puerto Rico last year and plan to do more than create a cryptocurrency bank, will perhaps bring crypto libertarian ideas to the island. Their vision is similar to another would-be crypto utopia, the Free Republic of Liberland, which claims to be a “micronation” camped on the western bank of the Danube river. It uses Bitcoin as its “national” currency…”

Fight the power
“…The annual electricity consumption for mining Bitcoin increased from 9.5 terawatt-hours (TWh) per year to 48 TWh in the last 12 months – 2.5 times higher than Puerto Rico’s total consumption of 19 TWh. Resources and infrastructure, post-Hurricane Maria, are too stretched to support cryptocurrency mining on the island…”
“…If Bitcoin can ride out its latest price fall, then it’s likely that crypto-colonialism will slowly spread around the globe. Crypto libertarians – if they follow the Sol model – could focus on those parts of the world that have been ravaged by earthquakes, tsunamis, hurricanes and economic crises.
But cryptocurrency has also become a panacea for economic recovery. In December, Venezuela announced a creation of a new cryptocurrency – dubbed “petro” – backed up by Venezuelan reserves of precious metals, oil and diamonds. It hopes to use this cryptocurrency to fight US sanctions, high inflation and low oil prices.
However, Bitcoin solutions for developing countries – previously known as neo-colonialism – shouldn’t be seen as the ultimate solution for disaster and crisis management. In the transition period, when the potential of cryptocurrencies and applications of blockchain are unexplored, we have to be sceptical of such initiatives as Sol…”

By Larisa Yarovaya and Brian Lucey 
From The Conversation

The article was originally published on BBC.