Venezuela’s Hyperinflation and Coins Falling from the Sky

A former Goldman Sachs employee who spearheaded blockchain research efforts within Goldman Sachs’ Investment Management Division has posted his charitable intentions on Medium, February 15, 2018.

Jonathan Wheeler is so inspired by blockchain technology and the potential of cryptocurrencies that he has taken the decision to dedicate his attention to it full time in his personal capacity.

“I’m abruptly leaving my job so that I can focus 100% of my efforts on driving the mission of leveraging Bitcoin to solve Venezuela’s hyperinflation,” he wrote.

Venezuela has been experiencing massive inflation, aggravated by vicious accusations between political parties and America’s disruptive manipulation. Gauged at hitting 30,000–300,000 percent by year-end, life in Venezuela has become a daily scene of empty supermarket shelves and popular dissent.

Invest with a conscience

Wheeler describes himself as a “passionate investor, blockchain enthusiast, software engineer, entrepreneur, dreamer, inventor, and activist.”

Saying that,

“Venezuela is experiencing rapid hyperinflation. I want to raise at least $300 million worth of hard-earned Bitcoin capital and electronically airdrop it onto Venezuelans”- Jonathan Wheeler
His stance is noteworthy as he exits a renowned formal sector institution.

Wheeler wants to “teach Venezuelans how to fish,” and has a vision of “skipping land-lines for cell phones,” a metaphor for jump-starting a new digital economy in the South American country, one that will slowly turn the national economy around.

In a nod to Coinbase co-founder Brian Armstrong, Wheeler echoed Armstrong’s stance and joined the ranks of those who are seeking to do proactive good with virtual currencies.

For Wheeler, with the Venezuelan currency essentially worthless, rather than stabilize it, he proposes that the country forget it and move right on with Bitcoin or another desirable cryptocurrency.

Noting that “The value of banknotes has deteriorated so much that it has become a nuisance.Many Venezuelan businesses have resorted to weighing bolívar in bulk,” Wheeler imagines a fairly rapid transition to cryptocurrency and a short-term turnaround of the country’s woes.

Describing the rapid accumulation of value possible with cryptocurrencies, he said: “Watching LN’s explosive growth has been like witnessing the birth of the second internet. For this and many other reasons, I’m convinced that Bitcoin will explode into the mainstream over the next five years, faster than the vast majority of people are expecting. For example, you often can’t use your credit card at a bodega in New York City without spending at least US$10 due to high transaction fees. As previously mentioned, this is no longer an issue with Bitcoin. Lightning Network also enables interesting new use cases, like paying a fraction of a penny for each web page viewed, rather than the ad-supported model that most of the web currently employs. Bitcoin’s future appears very, very bright. I strongly believe that Bitcoin will soon support an entire economy running on top of it and Lightning Network.”

Wheeler’s role in all of this remains unclear, beyond that of advocate and enthusiast. Widely seen as a dictator, Venezuela’s president Nicolás Maduro is singled out by Wheeler for destroying “the lives of 31 million people,” and is responsible for the poor management of the crisis since it began unfolding.

Saying that Venezuela is otherwise on its way to total economic collapse, while its dictator and top officials continue to enjoy a comfortable life”, Wheeler posted a pertinent question. “Wasn’t Bitcoin supposed to prevent all of this? Yes, and now it can,” wrote.

Wheeler concluded by saying that “If we successfully pull off this mission, it has the potential to become one of the greatest socioeconomic experiments in the history of the world, and I don’t think that’s hyperbole. It would be like witnessing the first atomic bomb go off: The world would suddenly realize that Bitcoin isn’t a theory anymore… it’s practice, and it’s real.”

In echoes of former Zimbabwe and other nations, Venezuela’s inflation rate hovers around 6000 percent and the economy has essentially collapsed.

Without cash reserves to fund purchases, utilities are suffering and basic processes like farming and manufacturing, getting goods to market and supplying the retail end are all hamstrung by the lack of a legitimate currency of any value to pay for goods and services. Outlining his dream, Wheeler also added a PS to his post on Medium:

“PS: If you want to know why I think Bitcoin is the best long-term store of value the world has ever seen, just check out the supply curves for Bitcoin, the U.S. Dollar, and Gold. Notice how unique Bitcoin’s supply curve looks. Also notice how even gold itself is inflating at an accelerating rate, partly due to improved mining efficiency. However, when more mining power is added to the Bitcoin network, Bitcoin’s consensus algorithm simply readjusts itself to make Bitcoin proportionally more difficult to mine. Amazing. Beat that.”

Feature image by Justin Mezzel

 

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