It's fair to say cryptocurrency has a knack for sparking debate, and that's inevitable when dealing with intangible, digital money that can be difficult to track. Bitcoin first rose to fame as the go-to currency for markets operating outside the mainstream. Silk Road black market Despite their popularity, crypto exchanges still operate in a largely unregulated environment, meaning questionable market tactics are not uncommon. pump-and-dump In one instance, a scammer was caught selling fake, tangible 'Bitcoin' coins right on the streets of New York.
Amid all the exotic tales and chaos swirling around cryptocurrency, the Sol initiative in Puerto Rico catches the eye. Spearheaded by a cohort of wealthy crypto investors, the project aims to sculpt a piece of Puerto Rico into a pioneering urban project rooted in blockchain innovation. Yet, the idea of this Bitcoin mogul haven has earned some criticism for its perceived neo-colonial undertones and dubious leadership. Brock Pierce Originally, the project didn't go by the name Sol. It was initially called 'Puertopia,' crafted presumably from 'Puerto Rico' and 'utopia.'
“Eternal Boy Paradise”
However, as 'Puertopia' sounded suspiciously like a Latin term meaning something akin to 'a child's paradise,' the name was quickly rebranded to 'Sol,' which translates to 'sun' in Latin.
The irony isn't lost when you consider that the Sol project's frontman is Brock Pierce, a former child actor turned blockchain enthusiast.
Pierce first appeared in the spotlight with his role in 'The Mighty Ducks', a beloved film series chronicling a ragtag youth hockey team aiming for greatness. In the story, he played the young version of the world-weary coach, Gordon Bombay. He also featured in 'First Kid' and other small projects.
The Young Gordon Bombay
Years later, Pierce made headlines again, but this time under the shadow of a legal controversy involving allegations of an unsavory child-related scandal.
At the turn of the millennium, Pierce was serving as executive vice president at Digital Entertainment Network, a company that faced serious charges in a lawsuit claiming the firm was involved in an alleged child exploitation ring with deep ties to Hollywood. In light of the accusations, Pierce eventually stepped down and relocated to Spain with other company executives. He settled one legal dispute for $21,600.
Brock Pierce: photographed atop the Monastery hotel in San Juan, Puerto Rico. Image courtesy of
Pierce carved out a niche in Spain by founding Internet Gaming Entertainment, a venture focused on facilitating real-money transactions for gaming currencies in titles like World of Warcraft and Diablo 3. When the company began to flounder financially around 2007, Steve Bannon, who would later serve as an advisor under President Donald Trump, replaced Pierce as CEO. NYTimes
By 2013, Pierce found his way back into the cryptocurrency domain, establishing Blockchain Capital. The following year, he spearheaded the Bitcoin Foundation as its chairman, leading to the departure of 10 board members who left citing a lack of transparency and their concerns over Pierce's past controversies.
In recent years, Pierce has played pivotal roles in numerous initial coin offerings, notably with Tether—a stablecoin claiming a one-to-one backing with the U.S. dollar, though skepticism remains about the authenticity of this claim. Critics suggest the backing may not hold water.
One undeniable aspect of Pierce's profile is his immense wealth. Forbes ranks him among the top 20 richest in the crypto world, with a fortune estimated between $700 million and $1 billion.
All roads lead back to the Sol venture.
Tropical Crypto Paradise
For a long time, Puerto Rico has been on the radar as a lucrative tax haven for American expatriates. Residents of this unincorporated U.S. territory enjoy exemption from federal income and capital gains taxes. With cryptocurrency subject to similar tax treatment as other assets in the States, Puerto Rico is an attractive proposition for major crypto investors.
Sol's visionaries are actively eyeing real estate in Puerto Rico for their ideal urban enclave, with some reports suggesting an acquisition of up to 250,000 acres. Meanwhile, others are content settling in Puerto Rico's existing communities as the project takes shape.
The project faces criticism primarily due to 'crypto-colonialism.' Initially coined in a completely different context, the term describes nations achieving political independence while becoming economically dependent—similar to what happened with countries like Greece and Thailand.
San Juan, Puerto Rico. Image from Cryptomarket360
In Puerto Rico's situation, the term rings true. The island is still recovering from the devastation of Hurricane Maria, which caused complete electrical blackouts. Enter the Sol initiative, presenting the promise of substantial investments in a high-end city, albeit one that may neglect Puerto Rican locals.
Dissenting voices around the Sol project are numerous, many focusing on issues beyond Pierce's past legal struggles.
Sol Opponents and Proponents
The project is even being labeled as an act of 'disaster capitalism' by some. With Puerto Rico still vulnerable after Hurricane Maria's destruction, there's a chance it might embrace any investment offering improvements, particularly those upgrading the electricity grid.
However, there is skepticism about the extent of any electrical enhancements reaching beyond Sol itself. Cryptocurrency mining and transactions are known to consume staggering amounts of power, and a blockchain-driven city relying on Bitcoin or alternative coins could demand even more electricity than conventional systems.
Not everyone shares this view. Entrepreneur Joshua Boles describes the Sol project as having a near-spiritual essence. If not holy, then certainly charitable, he claims.
He stated in his writings that blockchain architecture introduces unparalleled security and revolutionary governance, precisely fitting for this beautiful island. According to him, the enlightening experience offered by the 'Bitcoin Grand WIZARD (BP)' has converted him to this new era focused on sustainable abundance. As Boles sees it, alliances between entities like Silicon Valley and Puerto Rican municipalities could lead to fiscal efficiency that governments seem unable to achieve.
Boles disputes the notion of Sol being an exploitative venture this long-term, visionary project isn't merely about profits, as often alleged by critics. Instead, he regards it almost as the propagation of a new belief system.
He explains that while laying economic foundations is important to drive continuity, Sol is dedicated to spreading the beliefs of a new kind of spiritualism centered around peace, economy, and universal beauty.
Sol is undeniably ambitious and has met with its share of critiques. It possesses all the elements of a thrilling Netflix original movie—a lead figure dogged by past allegations, immense wealth, cutting-edge technology, and an exotic setting. The future direction of Sol remains uncertain, with most of its intended residents residing in the historic Old San Juan awaiting the next chapter in the project's development. Meanwhile, the island remains in its rebuilding phase since Hurricane Maria. Could Sol expedite or redirect this process? Is a crypto paradise in a U.S. territory the policy influencer mainland cities might need?
Out of This World
One certainty about Sol is its potential. Whether it succeeds or fails, it will provide a telling glimpse into the global future of cryptocurrency. A prosperous Sol could become an inspiring model for future cities driven by a crypto-centric vision. But if it stumbles, it will only confirm long-held suspicions of crypto skeptics, who see the space as a bubble destined to burst.
The individual primarily responsible for Blockonomi's editorial voice is also the founder of Kooc Media, a UK-based digital media enterprise with a focus on advocating for open-source software, blockchain innovation, and a universally accessible internet.
References
- https://www.reuters.com/article/us-bitcoin-foundation-resignations-idUSBREA4F02B20140516
- https://hackernoon.com/what-will-happen-when-the-shit-hits-the-fan-with-tether-f59f92fd8dca
- https://www.forbes.com/richest-in-cryptocurrency/#7506c3121d49
- https://www.nytimes.com/2018/02/02/technology/cryptocurrency-puerto-rico.html
- https://www.scribd.com/doc/63984222/Herzfeld-Crypto-Colonialism
- https://theconversation.com/bitcoin-rich-kids-in-puerto-rico-crypto-utopia-or-crypto-colonialism-91527
- https://steemit.com/puertorico/@joshuanboles/creating-puertopia-72-intense-hours-with-the-blockchain-grand-wizard
- https://en.wikipedia.org/wiki/Brock_Pierce
- https://www.forbes.com/sites/robertwood/2014/07/04/hate-taxes-move-to-tax-free-puerto-rico-stay-american-avoid-irs/#10694a736397
