Cryptocurrency: The New Frontier for Crypto-colonialism?

In 2002, Michael Herzfeld coined the term crypto-colonialism in his paper on anthropology titled “the Absence Presence.” In his paper, Herzfeld referred to crypto-colonialism as a situation where a nominally independent nation has aspects of its culture and norms influenced or refashioned to suit foreign ideals.

Today, there seems to be a new wave of crypto-colonialism that is vastly different from what Herzfeld envisioned. This new wave involves the mass migration of considerable cryptocurrency and blockchain resources to parts of the world affected by disasters or suffering from the acute economic crisis.

The main aim of these migratory activities is centered on the creation of a so-called crypto-utopia.

Rebuilding Puerto Rico Using Cryptocurrency

In 2017, Hurricane Maria devastated Puerto Rico. In the aftermath of the devastation, there have reportedly been inadequate relief efforts from the US government. A number of commentators have even criticised the Trump-led administration for not doing enough for the US territory.

Many communities in Puerto Rico have been without electricity for more than 5 months and the island’s infrastructure is in disrepair. The effects of the hurricane are even more severe when put into the context of the difficult economic situation that had been existing in Puerto Rico long before 2017’s Hurricane Maria.

Now, cryptocurrency enthusiasts and blockchain expats are moving to Puerto Rico in droves looking to create a crypto-utopia called Sol. Originally called Puertopia, the name was changed to Sol when it was learned that Puertopia in Latin stood for “eternal boy playground.”

Sol is being envisioned as a fully blockchain-based city where every facet of life will be run on the blockchain. Already, notable blockchain figures like Halsey Minor, the founder of CNET and Videocoin, Bryan Larkin, the CTO of blockchain industries, and Brock Pierce, the de facto leader of Puertopia, and the director of the Bitcoin Foundation.

Brock Pierce is also the co-founder of Block.One, the platform that runs the successful EOS tokens.

Crypto-colonialism, more Like Neo-Colonialism

While the entrepreneurs, crypto enthusiasts, and blockchain expats continue flocking into Puerto Rico, there are some who aren’t in any way enthused by the developments. The general feeling is that innovations and advancements brought about by blockchain technology will not in any way benefit the average Puerto Rican.

The move is seen by some as a way for wealthy crypto entrepreneurs to dodge paying US taxes while still retaining their US citizenships. Despite being a US territory, Puerto Rico offers considerable tax incentives to investors.

There are no federal income taxes and no taxes on capital gains. The business tax environment is also considerably more favorable than in the continental United States.

There are also concerns about the huge strain that crypto activities will put on the already strained energy resources of the island. Cryptocurrency mining requires a great deal of electricity, in fact, the energy expended for bitcoin mining per year is almost 3 times the total energy consumption of Puerto Rico.

Some foreign commentators and even some local residents of the island believe that cryptocurrency is a playground for the rich and that the poor will be left out in the grand scheme of things.

Time will tell whether this new wave of crypto-colonialism is indeed a form of neo-colonialism and if these seemingly benevolent crypto entrepreneurs can create a crypto-utopia that enhances the commonwealth of the people.

Feature image by Sandra Ieva

1 Response

  1. It’s scary to hear so much energy is needed to mine just Bictoins, not to mention other cryptos. Can’t they come up with something that doesn’t have to consume so much energy?

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