According to ABC, cryptocurrency billionaire Brock Pierce believes that he can help contribute to Puerto Rico’s economic development through investments in blockchain technology. Not only can blockchain technology help with immediate disaster relief for local Puerto Ricans, it can also contribute to their struggling economy and help the country to become an international hub of innovation.
“Puerto Rico has the possibility now to be put on the map as a hub of innovation,” said Pierce to a Foreign Correspondent. “And the pleasure of bringing essentially the most innovative industry the world has ever seen to a place that normally wouldn’t have been a hub, that’s a wonderful thing if it works.”
Pierce Sees Blockchain as a Transformative Technology
In September 2017, Puerto Rico was hit by Hurricane Maria. It was seen as one of the worst natural disasters throughout U.S. history and completely destroyed Puerto Rico’s power grid.
Harvard University reported that approximately 4,000 people died during the hurricane. It’s been ten months since the disaster and there are still thousands of Puerto Ricans who do not have power or shelter.
Pierce is one of several blockchain and cryptocurrency entrepreneurs that is interested in helping to rebuild Puerto Rico. Pierce became a billionaire when he invested a large fortune in Bitcoin. According to the New York Times, Pierce was also the director of the Bitcoin Foundation. He later co-founded Block.One, the startup responsible for developing EOS, which has a market capitalization of $7.88 billion.
Pierce is optimistic that blockchain, the underlying technology of Bitcoin, is something that can change the world.
“Has the internet changed our lives?” said Pierce. “Have mobile phones change our lives? The blockchain is something that is transformative. But you don’t need to understand it in the same way that you know how your phone works.”
Blockchain Can Help Puerto Ricans Overcome Low Tech Problems
Unfortunately, many Puerto Ricans are unaware of what blockchain technology and cryptocurrencies are, and it is not clear to them how such a complicated technology could help with their low-tech, immediate problems.
Their concerns are valid since some local Puerto Ricans are still waiting after ten months for disaster relief organizations to come by and help them reconnect with energy from the grid. Pierce, however, noted that these problems can be resolved with blockchain technology when the correct infrastructure is set up.
According to Bloomberg, Australian start-up Power Ledger is already making this a reality. The blockchain technology provider is currently working with Puerto Rican regulators and factories to help Puerto Rican companies finance their microgrid resources. The idea is to use blockchain technology to help the companies trade power and resources with one another to supply to the local communities. Through this system, Puerto Ricans can purchase power with cash, cryptocurrency, and if the company is open to it, human labor.
Puerto Rico as a New Blockchain Hub
While blockchain technology can help Puerto Rico with their existing energy issues, the Puerto Rican Government is keen to grow the Caribbean island into a new cryptocurrency hub. The New York Times reported in early 2018 that many entrepreneurs who were wealthy from cryptocurrency and blockchain-based investments have come to Puerto Rico to avoid taxes on their cryptocurrency fortunes. Many of these wealthy individuals are interested in reinvesting their earnings into building a crypto utopia on the island.
“What’s happened here is a perfect storm,” said Halsey Minor, the founder of news site CNET. Minor is moving Videocoin, his blockchain-based company from the Cayman Islands to Puerto Rico. “While [the hurricane]… was really bad for the people of Puerto Rico, in the long term it’s a godsend if people look past that.”
According to CNBC, the government of Puerto Rico created great tax incentives to attract emerging startups and wealthy people. The Puerto Rican government sees it as a new opportunity to reignite the struggling economy.
Manuel Laboy, the secretary of Puerto Rico’s Department of Economic Development Commerce, mentioned that it was always the government’s vision, even before Hurricane Maria, to become a world leader in export services and technology.
“This is one of the best places to put a start-up company,” said Jeff Thompson, the president and CEO of Red Cat, a drone technology company that uses blockchain technology. “The tax incentives are incredible for a start-up. The talent down here is incredible.”
Despite the opportunity, many in the Puerto Rican community are against the idea of creating a new cryptocurrency hub in Puerto Rico. In a video seen on ABC, a local Puerto Rican woman mentioned that the Caribbean Island “doesn’t need a savior.”
Unfortunately, as a past colony from Spain and now the U.S., the idea of wealthy U.S. citizens developing new infrastructure on the island does not sit well with many local Puerto Ricans.
Puerto Ricans Have no Faith in the Government and New Technologies
While investors from the U.S. are receiving great tax rates, the government has simultaneously tripled the tax rate for Puerto Rican students and reduced university budgets by about $269 million. Funding for vital industries like healthcare, pensions, and even the public-sector have also been slashed, even as many people are still struggling to rebuild their lives after the Hurricane Maria disaster.
While the U.S. Congress has requested for the Puerto Rican Government to create an austerity program, the government is in significant debt and is currently in bankruptcy.
“It was politicians in power with these corrupt practices that got us into that debt,” said Adriana Rodiguez, a student activist. “And I would even say that banks in the United States, knowing that we didn’t have the capacity to pay them back, loaned us the money anyway in this plan to keep us in debt.”
Unfortunately, the local people feel as though the government has done nothing to help with the Hurricane Maria disaster. Many people in the town of Mariana have even purchased solar panels and installed them without any technical knowledge or training. Professor Luiz Rodriquez noted that the locals have no faith in the government and are skeptical that emerging technologies like cryptocurrency and blockchain technology can make a difference.
“It’s that whole imperialism again and again and again in different forms, right? said Rodriquez. “Just people coming, thinking that they can save us.”
While many locals are uncertain whether blockchain technology can have an impact, everyone, however, agrees that things need to change. The old approach of getting things done in Puerto Rico has unfortunately left the country bankrupt.
Only time will tell whether the Caribbean island will end up flourishing as a global blockchain hub, or whether they will fall behind in crippling debt.
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