According to the most recent New York Times report, Puerto Rico is “home to one of the world’s earliest cryptocurrency communities.” Are they exaggerating, or do they have a point? According to reports, favorable tax regulations have attracted “10,000 well-heeled US migrants” to the island. “An estimated 3,000 of the arrivals are freshly minted bitcoin billionaires,” according to the report, while “an estimated 4,000 enterprises and rich individuals have relocated to Puerto Rico.”
Those figures are undoubtedly exaggerated, but the story as a whole is well-written. The author, on the other hand, is a cryptocurrency newcomer who uses cliché-ridden phrases like “a new currency invented in a flash” and “instant millionaires,” and he describes the industry as “one of the most energy-intensive activities in the world,” despite the fact that he’s mostly talking about Proof-Of-Stake networks.
In any case, let’s begin from the beginning:
“In 2012, though, the government of Puerto Rico, which is an unincorporated territory of the United States, passed a series of acts offering tax incentives to any American investors who want to relocate.”
Two things happened as a result of the decision. “Heavyweight cryptocurrency players such as the hedge fund Pantera and the risk management firm Darma Capital have relocated to Puerto Rico,” according to one. And two, “some locals are outraged because they do not receive the same tax incentives as wealthy foreigners, and the flood of wealthy outsiders is driving up home prices beyond the grasp of existing residents.”
Before you jump to conclusions, keep in mind that Puerto Rico was ravaged by a massive hurricane in 2017. “Hurricane Maria was the worst storm in nearly a century, with gusts of 155 miles per hour and an estimated $90 billion in damage.” The entire island lost power, and power outages are still widespread today.” The favorable tax regulations are a means of attracting funds to the island. And it appears to be working.
What Is Going On In Puerto Rico?
The author is conflicted. On the one hand, he appears to respect Crypto’s outlook on life. On the other hand, he still thinks it’s all magic internet money and that making it in crypto involves no effort at all.
“In the real world “Pessimism is rife and we seem to be fighting over ever smaller slices of the pie. But what if you could simply grow the pie? What if you could just use technology to create new wealth in an instant?”
On the one hand, the author sees the positive: “In recent months, Puerto Rico has hosted cryptocurrency conferences and set up beginner’s classes for residents to grasp the fundamentals of digital currencies.” On the other hand, he depicts the opponents as “rootless digital plutocrats — selfish neocolonial tax exiles playing a fantasy by feasting on Puerto Rico’s desperation.”
Evan Arteaga’s Dream Is to Live in Puerto Rico
“Evan Arteaga, 38, who has lived in Puerto Rico for four years,” is one of the interviewees. “This is the inevitable progression of the capital marketplace,” he says of the crypto business. I believe this is the future; all we have to do now is keep going.” He also appreciates everything Puerto Rico has to offer.
“Tax is the incentive for being here, let’s be honest,” Arteaga says. “You’re saving 40 per cent capital gains tax. But it’s also a beautiful place. We have the beach. We have the mountains. This is my dream.”
Amanda Cassatt recommends decentralizing everything.
“Cassatt, 31, is the creator of Serotonin, one of the first marketing agencies devoted to working with crypto entrepreneurs,” according to the story. Her quote seems odd:
“Decentralise everything. Currency is just the beginning. Decentralise the energy markets. This is the embryo stage of a new economy.”
What does it mean to “decentralize the energy markets”? Later in the essay, the author attempts to explain it: “electricity, for example, might be sold between individuals on the blockchain instead of passing through the central grid.” “Goodbye, energy behemoths.” WHAT? That is not going to happen. And not everything has to be decentralized or necessitate the use of a blockchain. The energy behemoths have nothing to be concerned about.
Ana Teresa Toro is the critic.
The story includes a “local writer and teacher” to provide an opposite viewpoint. According to Ana Teresa Toro:
“They are here dreaming of a utopia because they have so much money in their pocket, when people here can’t even dream about next week. It’s like a playground for them, the stakes are so low. It’s like they are having a rehearsal for a play in our living room.”
Later, he says, “the inequality is really awful.” I’m still getting power outages once a week.” She could be talking about the globe as a whole. It’s not ideal or beautiful, but that’s the reality we live in.
Brock Pierce, Puerto Rico’s Self-Proclaimed Saviour
Brock Pierce, the infamous impersonator of a bitcoin leader, took a break from mimicking a bitcoin leader to play the obnoxious leader of this particular cause. “The planets are aligning for Puerto Rico to have a rich and brighter future.” Most countries and cities must make significant investments to obtain the intellectual capital that exists in Puerto Rico. “It is the intellectual capital of the financial future,” he is quoted as saying in the piece.
Pierce, on the other hand, does not appear to have made a favorable impression on the author:
“Some find him increasingly insufferable, resent his role as the self-appointed “face” of their movement and question how much of the $1 billion he pledged to donate to the island and associated causes has materialised. “I am a positive member of society, but I don’t go shouting it around,” says Andrew Keys, a crypto whale who migrated to the island several years ago. “Brock Pierce said he was going to donate a billion dollars to Puerto Rico. We’ve hardly seen any of that.”
Pierce’s reaction? “I’ve put more money into it than anyone I know.” I’m not aware of anyone else on the planet who has made such a commitment. But you understand how difficult it is to give money away.”
Julio Domenech’s Local FeelGood Story
When he came across cryptocurrency, this 24-year-old “was working at a job collecting business cards at bars for an IT firm.”
“Now he’s a “millionaire” and recently returned from a crypto conference in Dubai. “It’s honestly like a dream,” Domenech says. “Crypto changed my life completely. We’re empowered, man. Locals are getting involved too.”