Before Bitcoin was a twinkle in Satoshi’s third eye, crypto-anarchists clamored for the freedom that distributed systems now offer us. They knew that the State would be unable to keep up with the wave of decentralization. As this cultural upheaval catalyzed by Bitcoin sweeps through the Zeitgeist, many subcultures have been formed. Some of them hold decentralized dance parties. Some coordinate to pump and dump for fun and profit. One slice of this ever-expanding fractal pie, however, seeks to build new societies rather than buy shiny lambos.
In other words, many of these State™-haters are paradoxically seeking to build states of their own. These proposed organizations are always framed as being “opt-in”, unlike the geographically-bound nation-states we must petition for our passports. Some of these groups are offering token sales to build floating platforms on international waters; others are starting DAOs to colonize space. None of them seem like they are ready to move you in quite yet though, and this is why Puerto Rico’s collision with the crypto-wealthy may be an important indicator of things to come.
This drive to build new societies fills the vacuum left in our hearts by living in this post-truth era. Communication has broken down, families have been ideologically torn apart. Our narratives have branched away. In this context, we can see why people who have secured their material abundance start focusing on optimizing social systems, to build a space where cooperation is assumed and trust is maintained.
Disney carved an entire kingdom for himself, just south of Orlando, with its own police, fire department, and city codes. The Magic Kingdom had a symbiotic relationship with its host city at first, but it grew increasingly parasitic over time (much like Scientologists with Clearwater and Hollywood). Not far from Disney’s well-manicured artificial reality bubble sit ghettos filled with broken dreams, as captured in "The Florida Project". Even left-leaning Seattle seems to have been taken over by Amazon, unable to tax or limit the corporation. The power of these organizations is often so strong that even the police structures are unable to resist their will.
How is there any way to align the incentives so that all parties gain, rather than this typical pattern of exploitation, whereby one entity leaches from another?
If my spider senses were tingling properly at the summit, it seems there are a handful of well-funded groups seeking to acquire properties the size of Malta. These groups have varying mythos and ideologies, but they share the same vision of creating a new societies. These will be indicators of the world to come; built by crypto-wealthy, if they ever do manifest. We will see DAOs tied to geographical regions. Nation-states will compete with unstoppable organizations. We are at the start of a Cambrian explosion for governance projects, which will surely bring with it as many failures as it does successes.
Outwardly these "Startup Societies" present themselves as egalitarian if not humanitarian, but it’s difficult to acquire land ethically when so many boundaries have been drawn by colonizers. This article is the first part in a series exploring the moral quandaries of this bustling Startup Society movement, drawn from my experience visiting several conferences where these utopians congregate to share their visions of their futures.
The first conference on my circuit was a ‘Start-up Society Summit’ dedicated to rebuilding Puerto Rico. The territory’s well-being is tragically unimportant to the United States, and the efforts to rebuild the island speaks measures to this. Portions of the island are still without power a year after last year's storms; the nationalized power system being a pit of inefficient corruption. It’s estimated at least five thousand have needlessly perished as a result of the two hurricanes in 2017, many due to lack of access to food and medical care. The island has had “500 years of challenge and fear and anger and frustration” as Brock Pierce put it, and last year’s storms only brought it to a boil. Large scale protests on the island have largely gone unnoticed by the media. In the midst of this social unrest, Brock Pierce has been leading a migration to the troubled island, drawing both admiration and ire.
Undoubtedly, many bitcoins have been donated to help fill in the gaps where large humanitarian organizations have been failing. As these global nomads travel the island, they’re able to meet the locals and actually see what the village needs; solar power and water filters and so on. This is probably better than metaphorically or literally throwing paper towels at the problem.
Joe McKinney, one of the founders of Startup Society, explained that many projects seeking to decentralize energy distribution and government record-keeping started before the storm, but have gained traction since then. There’s even a movement to turn Ponce into a smart city, similar to Dubai with its Blockchain 2020 initiative.
The Startup Society Summit on Puerto Rico that I attended was held at George Mason’s campus in Arlington (although another is being hosted on the island as I write this).There was a friendly atmosphere at the conference but my feelings were a bit unsettled by a large room comprised predominantly of white males speaking on what would be best for Puerto Rico. All seemed eager to build mutual wealth with those who have been living there, but I did not feel like all of those present were operating in an economic model that transcends the need for selfishness.
The conference discussed a strategy for developing a partnership with one of the 78 municipal governments. As there is no distinction between cities and counties, one region could quickly shift to decentralized governance systems. But would this just be beta testing a potentially dangerous system on an unwitting populace? What happens when a city’s smart contracts fail?
The barrier to reaching ‘Puertopia’ is just as much social as it is technological. Joe McKinney acknowledged that there’s been difficulties bridging these two communities. “Some don't work with existing Puerto Rican organizations. And while they are often well intentioned, Puerto Ricans often feel condescended or rightfully suspicious.”
This tension between the locals and crypto-utopians flared up at a “Day of Listening” held in Puerto Rico, as recorded by the BBC. This gathering was held with the intention of building understanding between the two groups. After an hour of cordial interactions, some locals began voicing concern about the lack of native stakeholders present. One of the presenters tried to dismiss the locals’ concerns by explaining that the foreigners were coming with “beautiful intentions” and that “They are going to make something beautiful happen, whether you like it or not.” This elicited a cry of “Exacto!”: there was no need for the consent of the locals in this process. As one Puerto Rican later added: “It’s not that we don’t want you here - we want you here on our terms.”
I spoke with one local, Ola, about the wave of immigration. She had strong feelings of distrust towards Brock and his entourage. To her, their ‘burner’ attire - eagle claws and serpent eyes adorning black leather - seemed like costumes. The burners, they probably view their freedom of clothing choices as an expression of liberation from the coercive pressure that causes people to wear uncomfortable office clothing. The cultural disconnect here is palpable: burner culture sees itself as largely post-scarcity, but the island's economy is still struggling to meet basic needs. For Ola, these crypto-immigrants were issuing commands more than they listened to the people.
Ola told me about a group of artists who parked their cars along a street next to Brock’s party bus. When they got back from the street market, the artists’ cars had parking tickets, yet the highly recognizable bus did not. Who wants to piss off a billionaire?
The issue of selective enforcement of laws has deeper roots. Ola told me that Brock frequently invites local youth on to the bus, where alcohol and marijuana flow in abundance. On the surface this may be building community between the two groups, but the implications of selective enforcement troubled Ola: would the crypto-rîche ever be held accountable by the police if they did transgress?
So far, Brock’s entourage has limited itself to the historic colonial district of San Juan. But there are whispers of a large land purchase being organized on the west coast of the island. It is still unclear whether this exchange will result in direct ownership by the crypto-rîche, or if the land will be collectively owned in a trust. There is a potential for building ‘self-owning’ DAO/trust hybrids which keep their assets working towards common good. These structures may help put an end to the cycle of exploitation that leaves the islanders paying rent to foreigners.
By no means is this problem limited to the crypto-rîche: my U.S. landlord is buying a 4-unit on an island next to Puerto Rico. He expects it will return nearly 100% per year from AirBnb rentals. This profit will come at a cost to any native to that island seeking a place to live.
Even worse than vanilla rent-seeking, Puerto Rico has a history of plantations. In many of these micro-societies, “workers” were paid in tokens minted right there at the plantation. They were exchangeable for goods at the supply store, but would be worth nothing if the “worker” left the plantation. In other words: serfdom with extra steps. Perhaps now you can feel why some Puerto Ricans are concerned by pale skinned people offering them “Bitcoins” for their island’s goods, services, and land.
“This is a Puerto Rican movement - we’re just here to help facilitate conversation and provide resources”
Focusing on Brock and his burner friends may be a disservice to the locals who have been working to bring the island into alignment with the principles of decentralization. Corruption has plagued the island from every direction, including its single power company. Decentralized grid technology may end up turning Puerto Rico into a solarpunk paradise. Land cooperatives may preserve the island’s lush natural habitats for generations to come. Liquid democracies on distributed ledgers may finally give voice to a people who have been systematically robbed of their political power and natural resources.
And looming next to this cooperative efforts, the cycle of colonialism will lay ready, waiting for any actor to error in judgment. We have seen colonialism shift from outwardly promoting ‘Catholicism’ to now spreading ‘democracy’. Will we see something similar happen with ‘decentralization’?
You can’t eat blockchains. It is up to us to guide our peers to build kingdoms responsibly. Call out rent-seeking when you see it, and design profits to radiate outwards to all actors, including the workers. Paying brown people in cryptocurrency to clean up your mansion isn't decentralizing power.
The next Startup Society Summit is happening at the time I write this. I leave it up to you, dear reader, to investigate further, and see whether this gathering held up to its lofty ambitions.
Picture from Wikimedia Commons.