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Former Trump Advisor Steve Bannon Calls Crypto ‘Revolutionary’, Plans Entry Into Market

Stephen Bannon, co-founder of Breitbart News and former Chief Strategist for U.S. President Donald Trump’s administration, is planning to enter the world of crypto, the New York Times reports today, June 14.

The New York Times reports that Bannon is currently planning his foray into the world of cryptocurrencies and Initial Coin Offerings (ICO). According to the Times, Bannon has held private meetings with both crypto investors and hedge fund managers about the possibility of issuing an ICO through his investment firm, Bannon & Company.

However, Bannon told the New York Times that he would not be specific about his crypto plans, as linking his constroversial reputation to projects could hurt their chances of success.

Bannon — who the Times reports has a “good stake” in Bitcoin (BTC) — ran alt-right, anti-establishment media outlet Breitbart News until January of this year. He also served in the Trump administration until his dismissal in August 2017, allegedly due to his critical remarks about the president in Michael Wolff’s book Fire and Fury.

Bannon reportedly first got interested in the crypto sphere through former child actor turned crypto entrepreneur, Brock Pierce, when Bannon was working as vice chairman of Pierce’s gaming company. Bannon told the New York Times that it was his job with the Trump campaign that prevented him from getting involved with Pierce and crypto back in 2016.

Timothy Lewis, the co-founder of the Ikigai crypto hedge fund, told the New York Times that he was “impressed” with Bannon’s knowledge of crypto technology when he met with him last month to speak about crypto and ICO government regulations:

 “I didn’t know what to expect going in, but he had clearly done his homework.”

According to the New York Times, Bannon had previously brought up the idea of creating his own cryptocurrency this spring at Harvard, dubbed the “deplorables coin” in an homage to Hillary Clinton’s reference to Trump supporters as a “basket of deplorables.”

Bannon had also lauded the use of cryptocurrencies in assisting the European anti-establishment movement during a March lecture in Zurich.

Bannon’s current interest in cryptocurrency addresses the possibility of countries creating their own cryptocurrencies based on their national wealth, bringing up the example of an Italian digital currency backed by the country’s marble deposits:

“It was pretty obvious to me that unless you got somehow control over your currency, all these political movements were going to be beholden to who controlled the currency.”

Bannon also believes that crypto can give power to citizens that central banks took away by “debas[ing] your currency” and making citizens “slaves to debt”:

 “Control of the currency is control of everything […] It’s disruptive populism. It takes control back from central authorities. It’s revolutionary.”

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Islands, Robots And Flying Cars: Where Crypto-billionaires Chill Out

Despite the recent cryptocurrency market fall and the disappointment of those who invested in Bitcoin when it cost $18,000, there are nevertheless the lucky ones who managed to make it to the list of billionaires. Perhaps these individuals caught a wave and wisely distributed their cryptocurrency investments – in other words – “diversified.”

Judging by the number of crypto billionaires from the 2017 Forbes list, even millions in losses did not hit hard on these celebrities’ wallets when it comes to organizing vacations. Speaking of the places and the way Blockchain evangelists choose to spend their leisure time, they are as unusual as their source of income.

Image source: Forbes

Richard Branson’s Island

$5,000,000,000 – personal capital

$65,000,000 – Necker Island price

$250,000 – Gibbs Aquada amphibian

The British philanthropist and owner of the Virgin Group Empire surprised the community with his eccentricity again. Earlier he had already flown in an air balloon, turned into a woman and saddled the Gibbs Aquada, the world’s first amphibious quad bike.

Now he has successfully joined the ranks of the crypto elite and for the third consecutive year he has been gathering the real geeks to party on his Necker island.

Among them are modern-day Rockefellers, venture fund managers, and even the heads of states. Last year during Branson’s private Blockchain Summit, the Estonian Ex-President Thomas Hendrik Ilves and the European Parliament member Eva Kaili took advantage of Branson’s hospitality.

The island became famous not only for its privacy, but also for its special atmosphere. Those who visited it tell that in 5 days, connaisseurs of Bentley, Chopard, Chanel and private jets turned into Blockchain enthusiasts and talked only about ‘transparency’ and ‘ecosystem’.

Image source: Virgin Group

The innovator himself says that curiosity has brought him into the world of cryptocurrency and he wants to continue the journey further.

“I’m not sure if anybody knows exactly how emerging payment technologies are going to change the world for good in the long-term – I certainly don’t. But I’m convinced they are going to have a big, positive impact, and am excited about going on the journey.”

It is not without Branson’s ‘follies’. Every year, the event is accompanied by the personal Branson’s Bitcoins bounty and his favourite jump into the pool. By the way, $65 mln island owner does not stop here and this year he intends to open the expanses of his island for the fourth time in a row for new crypto millionaires.

Brock Pierce and his paradise La Island de Blockchain

$1,000,000,000 – personal capital

$1,000,000,000 – Pierce’s donation to blockchain promised

$5,000 – a ticket to cruise in Pierce’s company

$1,755 – one square meter of estate in Puerto Rico

The most powerful hurricane, ‘Maria’, which ruined the ‘Island of Enchantment’ Puerto Rico, could not withstand the storming enthusiasm of the Block.One project founder. Born in the northern state of Minnesota, Pierce has not accidentally chosen a warm place as a platform for his “crypto utopia“. Together with other adventurers, he decided to turn the capital of Puerto Rico, San Juan, into a whole state with seaports and airports by purchasing land.

Image source: NY Times

The idea is that crypto-economics and Blockchain will reign in the place right to hide from taxes, which Pierce’s friends do not want to pay. However, the idea of ​​such freedom is not shared by all the inhabitants, and some even think that such a massive purchase of property in Puerto Rico by a group of crypto millionaires is a type of modern colonization of the island. However, the authorities do not share this position and fully support Pierce.

Pierce is increasingly seen in cruises and parties, where he actively attends secular parties and hi-tech exhibitions, but mainly those supported by other crypto billionaires. In early May, Brock along with the equally outstanding Dinis Guarda and Miko Matsumura will roll the star-format Blockchain Innovators Summit in Dubai, which will be accompanied by flying cars, robots, desert party and virtual reality portals. Everything is as crypto geniuses love. Unlike Branson’s party, the event will be open for all interested – and the stars do not mind.

The Madness of John McAfee

$2,500,000,000 – McAfee’s revenue

$105,000 – ICO Twitter post

$2,078 – one square meter of estate in the Dominican Republic

McAfee’s name has become really famous in recent times, especially in connection with the latest events that have occurred over the past two years. McAfee has invested in different projects with inconsistent progress, made scandalous statements about the Bitcoin price, and even started offering ad space for initial coin offering (ICO) startups in his Twitter for a ‘symbolic’ price of $105,000. Later McAfee, however, revealed that he carefully selects projects and only 5 percent of them may interest him in terms of promotion.

How much money the billionaire has managed to earn jumping on the ICO bandwagon is unknown, but the other day on his Twitter appeared an attractive picture with a view from his retirement villa on the Island of Dominica.

Image source: Instagram @officialjohnmcafee

Lambo for a young millionaire

$2,800,000 – personal capital

$402,995 – Lamborghini Aventador

$61 – a dish in Polo Lounge restaurant

Dubai attracts everyone, including the youngest cryptocurrency millionaire Erik Finman, who, at 19, has a fortune estimated at 403 Bitcoins (~$2.8 mln). However, teenage quirks come into the picture. The thousand dollars given to him by his grandmother to pay for a college once turned into $3 mln and could not be stored further on the card. The newest millionaire was so concerned about the security of his funds that he followed the example of popular Breaking Bad series characters and went to Mexico to properly hide the hard disk with all the keys to his wallets.

Image source: Instagram @erikfinman

A teenager’s leisure is not very similar to his peers’ pastime. He lives in Hollywood, dines at the best Beverly Hills restaurants and goes for a ride in a brand new Lamborghini with numbers corresponding to his average grade point at high school – 2.1 – which he never completed.

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Living like Gatsby

$25,000,000 – personal capital

$4,000 – an hour of private jet flight

$873 – Horizon Club suite room

These words sound every time Mr. Smith talks about the history of his success. Once he was an ordinary employee at an IT company, who had bought Bitcoins only out of interest. At that time the price of one coin was $0.25 and Smith’s colleagues joked about his investment.

However, by 2013 after rapid Bitcoin growth, he joined the ranks of the lucky winners who had suddenly become rich. He left the IT company and since then started traveling all over the world.

As a Bitcoin-billionaire, he flies exclusively first class or by a private jet, and stays in five-star hotels, one if which is Horizon Club Lounge of the Island Shangri-La in Hong Kong. He has already forgotten when he last ate at home. In a refined Gatsby-style manner Smith raises a glass of champagne with the phrase:

“Never a dull moment”.

The lifestyle of Mr. Smith and other crypto stars is a reflection of the era of “new billionaires” and the cherished dream of those wishing to become rich in a moment. But whether their immediate existence is so cloudless and whether they will replenish the ranks of millionaires this year is unknown. In any case, in 2018 we will see new faces on Branson’s island, ICO startups ads for a million dollars, and futuristic gadgets.

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I Survived the Eternal Boy Playground, But Will Puerto Rico?

“Everyone’s a burner now.”

My eyes opened wide. He probably thought I was going to kiss him.

But it was just the sentiment, the way it clashed against the scene. Outside one of the most popular clubs in San Juan, locals were being swiftly displaced by a newer, more exotic crypto enthusiast.

Sure, there was the normal dichotomy, button-ups and slacks, graphic tees and jeans, but another faction of the movement has emerged in Puerto Rico. Silver rings, steampunk vests and wide-brimmed hats; they probably wore them “on the playa.”

The playa. Puerto Ricans might understand that to mean the beach, but that’s not what they mean. No, these people mean more than 4,000 acres of alkaline dust, they mean the Black Rock Desert.

Burning Man.

They mean fucking Burning Man.

***

How did we get here? Certainly it happened fast, a mutation caused by the swift billions of 2017’s great crypto bubble. Still, one man perhaps has become synonymous with the shift, a child actor turned digital currency hype man named Brock Pierce.

Donning a top hat of sorts (a Queen of Hearts and a U.S. dollar bill stuck in the brim), it’s clear Pierce went to Burning Man and that he’s brought the burner aesthetic back with him to bitcoin.

I thought I would be happy about that.

And it might be fine if they had come back with a more well-rounded view of the world – but alas they came back still extreme capitalists, now with “sacred” geometrical shapes and a love of rainbows to add some innocence to their money grabs.

These are the same people who think the government should get the fuck out of the way so they can (figuratively) rape and pillage throughout the land as they see fit. The people who think others are inherently selfish and never do anything just out of sheer compassion or love, the kind that think the best system is one that pits people against one another for the greater good.

It’s nauseating, excruciating at times.

And so when I heard about Pierce’s commune in Puerto Rico, first profiled in The New York Times, there was a part of me that thought, this could be positive.

Burning Man stands for things that I’m generally interested in – radical inclusion, self-reliance and self-expression, as well as community cooperation, civic responsibility, gifting, decommodification, participation, immediacy and leaving no trace.

If (at least) one of those sounds like it doesn’t mesh with the ethos of the cryptocurrency community, it’s because it doesn’t.

***

I suppose it would be enough if they kept quiet and left others the hell alone.

But alas the burners of Puerto Rico need a show, and what they chose to erect is Blockchain Unbound, a sub-standard multi-day conference held in early March. Sure enough, the talk of the event was everything but what the suffering people of Puerto Rico need, a thesis on how the commodification of everything is coming, for the betterment of all.

Brock Pierce’s wife, an entrepreneur named Crystal Rose, even took the stage to spit out a bunch of nonsense about blockchain islands and human clouds, evoking even the late Stephen Hawking in explaining her project, Sensay, which as far as I can tell is all about commodifying everything you do and say online.

Cue Hawking turning over in his very fresh grave…

Taking notes, I was bewildered by how incoherent the explanation was, but tons of people clapped at the end, making me think, “maybe I just don’t get it.”

But having been in the industry since 2012, I do get it.

These entrepreneurs can basically say whatever they want with a few buzzwords sprinkled here and there – and after seeing the rise of cryptocurrency prices over the years – others will buy in whether they understand or not.

A Puerto Rican business executive hinted at this when he told me he was at the conference because he was interested in how blockchain could benefit the agriculture industry. According to him, people just kept saying blockchain will help, but no one would really give him the nitty-gritty of how or why.

You’ll forgive me if I wasn’t surprised.

Untaxed crypto

That all of this is an elaborate exploitation of Puerto Rico should be immediately obvious. But who knows? Maybe everyone is just in on the ruse.

From what I can tell, the government there is open to the idea of crypto-rich investors relocating to the U.S. commonwealth under the guise of trying to “save Puerto Rico.” But what it’s really about is the tax benefits.

See, Puerto Rico, while a U.S. territory, still gets some sovereignty in deciding its tax structure. As such, recently the territory passed major changes to Act 20 and Act 22. As of July 2017, Act 20 gives businesses a flat 4 percent corporate tax rate on any business income sourced in Puerto Rico, and Act 22 states that individuals and businesses will pay zero – yes, zero – capital gains taxes on assets acquired after moving to Puerto Rico.

Not bad, especially for crypto investors such as Pierce, who would otherwise have to pay upwards of 20 percent capital gains tax on their crypto investments on the mainland.

Crypto folks aren’t the first to have their eyes turn to dollar signs because of Puerto Rico’s lax tax laws. For some time, even before the changes, Puerto Rico’s tax laws have been less cumbersome than those in U.S. states, and a number of businesses (hedge funds for instance) have relocated to the island, at least on paper.

But today, it’s the crypto industry that’s getting a warm welcome.

“The government is very pleased you all are here,” said Manuel Laboy Rivera, Puerto Rico’s secretary of economic development and commerce, during the morning keynote on March 15.

During his talk, Rivera, who holds the second-highest government seat on the island, announced a new advisory council that brings together government leaders and crypto entrepreneurs in an effort to spur the development of blockchain technology on the island.

And later, George Joyner, the Commissioner for Financial Institutions for Puerto Rico, went so far as to claim, “In a few years, we won’t be able to imagine our lives without blockchain, just like we can’t now with our cell phones.”

According to Rose, one of the main benefits of moving to the island is that Puerto Rico’s politicians have been amazingly accessible and optimistic.

And many attendees echoed Rose’s sentiment as they moved from conference to conference, event to event as part of what was labelled #RestartWeek, with a mission of “celebrating culture, rebuilding the vibrant past and envisioning the future.”

Celebrating culture, huh? Brock Pierce and crew are converting a closed-down children’s museum into a commune, and until then are renting out a 20,000 square-foot hotel called the Monastery.

In walking through the streets of San Juan and driving around the island, I can tell you, lavish isn’t really the culture of Puerto Rico.

***

But it’s the culture the crypto community will bring to the island, no doubt.

While #RestartWeek ran a series of volunteer programs, which included bringing art supplies to the local Boys and Girls Club and cleaning up the beaches, crypto enthusiasts seemed all too unaware of what constitutes a basic human need, the kind of you might have after living through the worst natural disaster in the island’s history.

And it was another kind of woe-is-me white suffering that got the most airtime at the event.

“Banking here in Puerto Rico is ridiculous, for everyone, and [for people in the] the crypto space, it’s pretty much impossible.”

The comment from an audience member piqued my interest. The man sounded irritated, and while the panelists reassured him, he’d already started a movement. One after the other, men stood up during the Q&A session not to ask questions but to whine about the indecency of the island as a habitable place for crypto businesses.

Supposedly the airports are shit. Instead of a normal three-hour layover for a connecting flight, one guy had to wait eight hours. The indignity.

And then, the ultimate insensitive complaint:

“If I had to choose between electricity and internet, I’d light a candle.”

Is there no empathy in this space anymore? None?

By some estimates, more than one-third of the Puerto Rican population is still without electricity. And this jackass was saying he’d take internet over electricity.

Raul Vidal of Omnia Economic Solutions, a consultancy that specializes in Puerto Rico’s Act 20 and Act 22, said, “It will get better. Four months ago this place was a wreck.”

He continued:

“We’re not xenophobic. We want all you Americans here.”

I wouldn’t.

***

Elsewhere at the event, hypocrisy was in fashion – even the conference’s line-up had a number of speakers, some of whom lived on the island, who didn’t seem to understand anything about the commonwealth.

Yaron Brook, an entrepreneur and chairman of the board of the Ayn Rand Institute (excuse the massive eye roll) used his time onstage to make the case for making Puerto Rico more closely resemble Hong Kong.

“People ignore what made Hong Kong, Hong Kong,” Brook said. “It was a little fishing village. What did the British do to bring about this vibrant place … to make it what it is today? [They] established the rule of law, protected contracts and left people alone.”

There’s just so much wrong with that statement, and the whole premise of this talk generally.

It’s an apples-and-oranges comparison first of all. And it overlooks some serious nuance in the history and growth of both places – like the fact that Hong Kong’s growth has caused serious waste and pollution problems.

“We know how to get rich,” Brook continued.

It’s not giving tax breaks to some and not to others (“but please keep the tax breaks” he said, laughing), “it’s about the government staying out of the way.”

More cheers.

“Free markets. They work. They work everywhere they’re tried.”

Whoo hoo. Clapping. More cheers.

Cringe.

A question from the audience: “How do you make sure the wealth gap doesn’t grow between all the local Puerto Ricans and these entrepreneurs coming here?”

Damn. And I was about to lose all faith in humanity.

Brook began, “Lowering the income tax would be a good place to start.” He continued, “I’m looking for a research analyst right now. I would love to hire a Puerto Rican. When we come here, we will employ people.”

One person? One research analyst?

Later in the day, Rose is talking about how, by virtue of having an internet-based business, her whole team is dispersed throughout the world – the chief technology officer, in fact, lives on a beaver farm in Canada.

“It doesn’t really matter where you’re at, just matters that you are connected to other awesome human beings,” she said.

So you’ll have to excuse me that I don’t buy this “entrepreneurs will bring jobs” bullshit.

Brook concluded with something that for me, someone who despises mass consumerism and the adoration of money above all else, was the last straw. Don’t come here because you pity Puerto Rico or to provide charity, he said, “You should want to come here for your own profit.”

Fuck this. I’m going to the beach.

The Messiah

It’s amazing how calming the ocean can be. After a couple hours bobbing in the cool water and drying off in the sun, I decide to give the conference another go.

“Were you just here to make a lot of money or actually here to affect change?”

Nail meets head as Melinda Moore, co-founder and CMO of iConsumer, takes her panel to task. “What if [the crypto markets] lost another 50 percent, would you still be here?”

The answer was pretty clear.

They’re here for the tax incentives, because the government is stroking their egos, because they’re fucking rich.

And let’s face it, that’s who Pierce has brought to the island. The guy has had one foot in questionable activities since he stopped acting. Not least of all, he was business partners with a man who would later do time after admitting to luring five minors across state lines for sexual purposes.

It’s a well-detailed story. Without laying out the whole fucked-up scenario as many people haveBrock Pierce helped found Digital Entertainment Network (DEN), an online streaming service, with Marc Collins-Rector and Chad Shackley.

According to Buzzfeed’s June 2014 in-depth report of “The Hollywood Sex Abuse Scandal,” DEN was run out of Collins-Rector’s Los Angeles mansion, and it was here where the three men would host lavish parties where Collins-Rector and allegedly others sexually assaulted dozens of teenage boys.

Pierce himself was named in one such sexual-assault lawsuit (although the case was eventually dropped).

Not long after Brock Pierce joined the Bitcoin Foundation as a board member, a number of other board members resigned in protest to these past dealings.

His response to the controversy in 2014: “It’s 15-year-old news at least as it relates to me. And anyone can sue anyone for anything they want.”

Still, that’s the way Pierce operates – always evasive.

(Pierce was contacted by multiple people at CoinDesk several times for comment on a whole host of topics related to cryptocurrency in Puerto Rico but did not return requests.)

***

Cut to present day and Pierce has made himself a revered figure in the cryptocurrency space, primarily by cutting checks. Lately though, it seems he’s more about cutting loose.

Whether it’s backing the latest questionable blockchain project, EOS, investing in a project called Tether that’s been accused of propping up the crypto economy, or his association with a cryptocurrency conference that Wired exposed for dosing attendees with marijuana, there seems to be a high correlation between Pierce and controversial projects.

In Puerto Rico, it seems he’s applying the strategy now to full-on municipalities.

And that might be the fate of what Pierce and crew were calling “Puertopia,” a phrase the Times pointed out translates to “eternal boys’ playground,” by moving to the Caribbean island to build their businesses.

If it weren’t for the fact that Puerto Rico is a U.S. commonwealth, the venture would seem exactly like colonialism – the policy or practice of acquiring full or partial political control over another country, occupying it with settlers and exploiting it economically. Wait, no, actually it’s still colonialism.

“You’re Puerto Rican? So we’re gonna talk later, because now I am too,” said Crystal Rose after a question from the audience.

I nearly choked.

Rose is not Puerto Rican, and saying that she is just because several months ago she moved to the island for the tax benefits is offensive.

***

Later on, I summon the courage to query the locals for their thoughts.

I’m talking to the waiter about life in Puerto Rico and he makes it clear that he believes being under U.S. rule is “more like an occupation.” They don’t get to vote for the president, they deal with silly regulations – The Jones Act for one – that tend to hurt their economy and foremost, they’re just very different culturally than mainland Americans.

I decide now’s an alright time to ask about cryptocurrency. And he passes our conversation to the bartender.

The bartender had done pretty well for himself, investing in ether when it was only $27 (it’s currently around $395, according to CoinMarketCap). But he studied finance in college and thinks he’s in a better position to understand cryptocurrency, at least more so than some others he knew.

“They didn’t know what they were doing,” the bartender says, alluding to bitcoin’s correction, where the price dropped below $7,000 after nearly eclipsing $20,000 back in December.

This has always been true, though, in the cryptocurrency space. Some people get in not knowing what the fuck they’re doing and have lost big money because of that.

It’s not necessarily the industry’s fault, although they sure do herald cryptocurrency as the savior of all the things. But maybe what’s more irritating about this whole “crypto is gonna save Puerto Rico” narrative is not that some will get burned because they don’t know what they’re doing.

The most irritating thing is that crypto entrepreneurs with fat pockets are waving cash in front of the faces of Puerto Ricans (who still don’t have electricity or running water) and pretending like all they have to do is invest in crypto and voila, they’ll have the personality of the sleepy creepy cowboy from the future,” sipping expensive wine on the rooftop of monasteries and living the life.

Later, during dinner, a middle-aged white man who came to the island to help rebuild (he puts up telephone poles) starts up a conversation.

He needs some advice from two young women, close to his daughter’s age. See, he heard his daughter was stripping and he wants to either shut off the electricity back in the mainland neighborhood where the strip club is or send her $5,000.

My partner in crime here on the trip, Sam, is against it and so am I really, but I’m having trouble articulating why. As I suck down the last of my margarita it hits me. “Money doesn’t actually solve problems,” I say. “It just enables people to do what they already want.”

Put another way, money only intensifies people’s existing inclinations. It doesn’t change them.

I’ve struck a chord there, as Sam and I discuss what we would have done with $5,000 several years ago when our inclinations were not to travel the world and understand life in its crazily diverse perspectives.

The man rouses me, asking, “Do you think that’ll work here?”

“What? Crypto?”

“Yeah.”

“Well, it depends what you mean by work. But ultimately, no,” I say.

“I agree. You have to be comfortable to invest in something like that,” he says, adding:

“If you don’t have running water or electricity, you’re not comfortable, how do you invest in that?”

I’m willing to be proven wrong.

Positive island vibes

mauritus, harbor

mauritus, harbor

That said, some people were more positive than me (surprise).

Take Josue Acquino, a certified public accountant and director of Ataraxia Technologies, who expressed his view that events like Blockchain Unbound could really help make a difference in Puerto Rico.

“We are very happy to have the event in the island and to build Puerto Rico as a center of excellence for blockchain technology with the help of the crypto community,” he said.

But in conversations over drinks, many of the people I spoke with voiced concerns over the real reason crypto entrepreneurs were flooding to the island, and whether their efforts will really help fix the economically dire situation.

I thought about covering the conference straight. I thought about excluding all the history I know about Brock Pierce and all the ridiculous antics I’ve seen over the past five years. I did, because I’ve watched as a whole host of people call out the crypto industry’s bullshit and nefarious characters and yet those projects and people are still around, still being glorified.

And it makes you think: Will this even make a difference? Will it change anything?

I thought this through while having a glass of wine in the Airbnb. There were only a couple channels we could get on the TV there – but one was Comedy Central so Sam and I were watching “Rick & Morty” reruns.

Maybe I should just be agreeable, likeable, I thought. Maybe then I’ll get invited to the commune.

On the screen, Rick clinked a glass. Season two, episode 10. He’s at Birdperson’s wedding and is about the give the best man speech. I remembered liking this speech.

“When I first met Birdperson he was uh … “

Rick trailed off. I looked up from my laptop; this is where it gets good.

“Look, I’m not the nicest guy in the universe. Because I’m the smartest. And being nice is something stupid people do to hedge their bets.”

Ahh fuck it then.

That’s how these people thrive. They count on us to be polite.

CoinDesk was not invited to the commune.

Puerto Rican flag on bitcoin image via Shutterstock, and Vanderbilt Condado lobby view image via CoinDesk. 

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Puerto Rico Aims to Attract Blockchain Startups With New Council

Puerto Rico’s government has created an advisory council aimed at spurring the development of blockchain businesses on the island.

The move was announced Thursday during the Blockchain Unbound conference in San Juan. Manuel Laboy Rivera, Puerto Rico’s secretary of economic development and commerce, struck a bullish tone during remarks about the tech’s future prospects. The council is composed of a mix of public and private sector representatives, including Rivera, the government’s chief innovation officer and its secretary of the Treasury, as well as a mix of entrepreneurs and investors that have moved to Puerto Rico.

Blockchain, he said, “is accelerating economic and social changes worldwide and Puerto Rico wants to be a part of it.”

The creation of the council comes after a number of high-profile blockchain and cryptocurrency entrepreneurs followed investor Brock Pierce to U.S. commonwealth to set up a “crypto utopia” of sorts.

According to Rivera, Puerto Rico already offers a beneficial location for new businesses, a state of affairs that is buoyed by the tax incentives outlined in several legislative acts. These include Act 22, which provides exemptions for individual investors that are residents of the island.

On top of that, Rivera said the government – through the advisory council – will be looking at ways to develop the best possible regulations and legal framework to support blockchain businesses. That said, as a U.S. commonwealth, Puerto Rico has all the protections given by federal government and must also abide by American regulatory frameworks.

Puerto Rico’s interest in attracting blockchain entrepreneurs and investors comes after the island was hit by Hurricane Maria, the tenth-most intense Atlantic hurricane on record.

As such, the government in Puerto Rico would like to diversify its economy – and according to Rivera, officials there see blockchain as one way to do that. And after detailing the openness of the government to the industry, Rivera, pointing to the beautiful landscape and vibrant culture on the island, joked:

“But most importantly, you’ll be doing business in a tropical island.”

Manuel Laboy Rivera at Blockchain Unbound conference via CoinDesk

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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John McAfee: We’ll Screw up the Future, But It’ll Still be Better Than What We Have Today

John McAfee has already established himself as a prominent figure in the cryptocurrency world. With his background in programming and cybersecurity, he seems to be pretty fascinated by the decentralized technology and what it has to offer to the world.

We had a talk with him during the Cruise Asia, that took place Jan. 15- 19, and found out how he researches the coins to promote, whether he has any regrets about them and why Blockchain is the best thing that happened to the humanity.

Crypto Daria: You’ve got 700,000 followers on Twitter. Do you realize how big of an influence you have in the crypto market and do you think it’s positive?

John McAfee: Of course! I mean for the cryptocurrency community that’s a fairly large number of followers. But it’s not just that. I also speak at all the major conferences, I’m close friends with Jihan Wu of BITMAIN – the main manufacturer of, virtually, all the Bitcoin miners, Roger Ver, for instance, or Brock Pierce is my party animal that I party with. I have as much influence in that arena as I do with my followers. In fact, even more. To sit down with Roger Ver and Jihan Wu and talk about Bitcoin Cash – I think vastly is much more influential than tweeting to 700,000 people.

John McAfee

John McAfee speaking in front of the public during the Cruise Asia, January 2018

CD: How do you decide which coin to promote? How do you research them?

JM: First and foremost are the principles able to actually produce what they say. Can you develop the product in a timely fashion? Do you have the team in place that understands the Blockchain, the software, the marketplace? But more importantly is something that I would like to use myself. Like Outings – hell, yes! I would love to use that program. Okay, I’ll pay a dollar to get the info I can get from the app. The same with coins. I would love to have that facility – the KWHCoin. I mean I’ve had a lot of homes that were off the grid. There’s no greater nightmare than having more electricity than you can use and this goes to waste; or not having enough. So to be able to transfer back to the electric company through tokens and someone in a place that has access to let me buy from them. Who wouldn’t want that facility? So if it’s something I personally want – yes, if they can do it, it’s a great idea, if it’s helpful to the society – there is something I would like to pass on to my children. Then, yes. I would talk about it. Because if I don’t talk about it, then who else? Nobody’s reading those white papers.

CD: Do you evaluate coins differently with time?

JM: Yes, of course. Everybody makes mistakes, you know. In the beginning, they said that’s a great idea and then they don’t pull this through.

CD: Has anyone ever tried to pay you for mentioning their project and if yes, what were the projects?

JM: I would say definitely they tried to pay me. I’m not going to talk about my personal finances where I make my money or from who. I set up on stage as it’s my business and it should be everybody’s business. And actually, I think it’s rude to even ask such questions of people. No offense.

CD: Do you feel responsible for the weight of your words and subsequent pump-and-dumps that follow?

JM: Absolutely not. Let’s imagine: if I see something that I think the world needs to know about – I’m gonna say it. No sense in me being the only to know. I don’t want to whisper it to my friends. Isn’t it far worse? The fact that people take that and pump it, and dump it – that’s their business, not mine. I mean look at on the Verge token. I said Verge would probably double in price in the next few months, well it went up fifteen thousand percent.

It wasn’t my fault that people go and buy it at twenty cents. I thought two cents was a lot of money! It’s not my problem, you know, I’m just recommending. Because it [company] does have some privacy things to it [coin] and it has the possibility with the race protocol to actually become a real privacy point. When it’s going to happen now, I don’t know. But it’s sure not worth what it is.

Verge Charts

Coinmarketcap

And for the other people: if people want to be greedy and to look at this arena as simply a way to make money – well then they deserve what they get. They could look underneath this and say: this is a revolution! Unlike anything that the world has ever seen. Then forget the money! Why don’t you look at the utility, the power of the specific token or coin and how it could change your life and the life of your friends, your loved ones and your children. I’m not gonna stop doing that. You can throw as many rotten tomatoes at me, as you want; call me any names you want – names don’t hurt me. You think I’m gonna care what people call me, what they say about me? I could care less.

CD: Of course. Do you have any regrets or disappointments about the coins you’ve mentioned?  

JM: Yes, of course. I regret about FINA coin.

I found out later that one of the founders was a member of a Nigerian criminal organization. It’s hard to know all the facts until someone says “By the way, we resources and found this out.” I immediately tweeted and said that I apologize and I took back my recommendation.

But this is the nature of the business. I mean if we’re in a brand new economy, brand new paradigm if I don’t step in mud bubbles than I’m not doing my job.

CD: What’s your number one piece of advice for the crypto investors?

JM: There is none. Because whatever I recommend today will change tomorrow. There’ll be something that comes and replaces it. I believe that the future of cryptocurrency is in the new emerging coins technologies and creative ideas that are coming out to through the ICOs. And everybody’s overlooking this. People seem to be only concerned with making money – “Is Bitcoin going to rise or fall?” “Is Ethereum going to rise or fall?” “Is there going to be another fork in Bitcoin?”,”What’s that gonna be?” “Is it Bitcoin or a Bitcoin Cash?” Screw that, this has nothing to do with these things. It has to do with what’s coming behind us, what’s emerging from the ground and what is going to change our future. We’re forgetting that these are real, life-changing, culture-changing events, attitudes, products, creations. And we have got to watch them. If not – we’re gonna miss out on something and the good stuff is gonna get swamped and drowned in the garbage. That is the overall sea of ICOs. We already know, what Bitcoin is, we know what Ethereum is. Fine, do what you want with it. Start digging into the new technologies in there. There’s going to be a Henry Ford, there’s gonna be the concept equivalent to the railroad, there’s going to be something that will change our lives in such a beautiful way, that if we miss it, we will regret it for a lifetime.

CD: Are you worried about the recent Bitcoin price dip, given your promise in case it falls?

JM: Not at all. When Jamie Dimon announced that Bitcoin was a fraud, Bitcoin dropped 40 percent in a matter of hours. I didn’t worry then, I’m not worried now. It has its own life.

CD: What made you make that promise in the first place?​

JM: I was on television and it just came out. They said “Will the Bitcoin fall?” And I said: “I’m gonna eat my eat my genitals if it’s not five hundred thousand dollars. And this is back when Bitcoin was four thousand dollars. It’s since gone way beyond what I thought it would go. I thought i was wrong, so my projections are way wrong, I changed it to a million dollars. You will see, it will happen.

CD: In your opinion, what prompted the recent market fall and what to expect next?

JM: The same thing that prompted the original crash of Bitcoin, which was JP Morgan, one of the world’s largest banks and certainly America’s largest bank. All banks all terrified. Everybody’s wallet is a bank now and we won’t need banks anymore. Banks are going to disappear, if they do not do something.

CD: Your Twitter account seems to be a constant victim of hacks. How does it happen?

JM: It’s only been hacked once. I know exactly how it happened, because the people who did it contacted me. They used a new technique called SIM Swapping. At first I thought they didn’t hack my account – I can’t be active. I thought they hacked Twitter, but what they did, they hacked my carrier AT&T, which is the largest carrier.  So what they did, using social engineering, kept calling local offices until they found the sympathetic hero. “Oh, my name is John McAfee, I lost my SIM cards, I have a new one. Can you please change my account to this?” And eventually someone did. My phone stopped working. Then they went into Twitter and say I forgot my password, please, send it to my phone.

And so they sent a code to what is supposed to be to my phone but it’s their phone. They use that code, change my password and they were on for two and a half hours while I struggled to get back in. I finally hacked myself back in and through the mail. I’ve never heard of that technique before. It’s a brand new social engineering technique of hackling. So it was not Twitter, it was AT&T. I complained to AT&T; they did nothing. What I did is that I took off two-factor authentication, if I had not had  two-factor authentication, they could not have hacked me. So now, what used to be the best way to protect yourself, turned out to be the worst, because if you have your phone number in there, then they can get it; they can go in and send that. If you don’t have a phone number, they can’t send the code anywhere, and they’ve got to figure out my password, which is impossible.

CD: How do you perceive the core philosophy behind cryptocurrency?

JM: Well the core philosophy is one of the greatest in the world – “let’s take power away from the centralized agencies!” When power coalesces, when it compresses into a large entity, it always becomes corrupt. And power always corrupts whether you’re an individual or a corporation. So it [the Blockchain technology] takes that away and distributes that power to us. So what this means is that the entire structure of civilization is going to unwind and will reassemble itself in a way that it should have been from the very beginning. We, as people, having our own freedom, our own power. Not having to ask you permission or the government’s permission before I can do something. Like send somebody money or receive money, or buy something as long as I’m not harming you or my neighborhood. Then why the hell should I ask permission from anyone to do anything? So this is what’s happening, we’re entering a permissionless world, where when you reach adulthood, wherever that is, in whatever country and it’s different, in Central America, it’s the age of 12 (*note: in the countries of Central America the legal age varies from 14 to 18), in America it’s 21, when you become an adult, you become your own master. You don’t need to ask anybody’s permission to do anything. This is the change and this is what’s going to take this world and give us finally the opportunity to create Eden, to create perfection. Now we will screw it, we always do, but even in screwing it up – it would be far better than what exists today.

CD: And how do you see the future of the crypto industry?

JM: It’s going to explode. I mean we’re just in the infancy right now. As I mentioned every aspect of life is getting its own coin and it should have its own coin. It needs its own coin. Because every coin has a different function or should have. So it’s going to be like the Internet when it first began. Only a hundred times more profound, more deep and will have an impact that I cannot possibly ignore you foresee even five years out.

CD: Thank you for taking the time!

*Note from the Cointelegraph editorial team

Posted on

New Blockchain-Based Startup Creates New Opportunities for Charity

CharityStars is an online fundraising auction platform for the nonprofit sector that launched a series of auctions with prominent leaders in the Blockchain space.

The auctions which will be closed on Dec. 18, include meetings with Dr. Julian Hosp, co-founder and President of TenX, Ryan Taylor, CEO of Dash, Brock Pierce, chairman of the Bitcoin Foundation, Erik Voorhees, CEO of ShapeShift, and more.

“We believe that joining forces with such reputable leaders will not only draw deserved attention to the charities in need but also highlight the staggering benefits that this emerging technology can bring to the nonprofit sector.”

Francesco Nazari Fusetti, CEO of CharityStars

“As the use of cryptocurrencies and the adoption of Blockchain become more mainstream, the early adopters of this technology have a great deal of responsibility. At the forefront of this revolution the onus is on us to raise awareness, not only of what the technology can achieve but how we must work together as a community to achieve it.”

Erik Voorhees, CEO of ShapeShift

Proceeds from auctions

All proceeds from these auctions will be donated to the Blockchain Education Network (BEN), an international nonprofit organization dedicated to forming a network of students; the Bancor Foundation, which promotes the development and adoption of the Bancor protocol; the World Wide Fund for Nature (WWF) the world largest organization for nature conservation; Save the Children, an international non-governmental organization that promotes children’s rights; and Unsung, an online community in the US that seeks to solve hunger.

“While I always cherish the opportunity to speak at length about such a fascinating industry, the chance to sit down and do so for a good cause is both exciting and inspiring. The use cases of Blockchain are limitless but the charity sector has always been an area in which Blockchain application is particularly beneficial, and I am thrilled to be a part of it.”

Ryan Taylor, CEO of Dash

Payments in crypto

A few weeks ago, CharityStars announced the implementation of BTC and ETH payments on their website, in order to allow their users to bid with these two popular digital currencies, and an auction to meet Cristiano Ronaldo.

The auction winner paid $36,000 worth of Bitcoin to meet Ronaldo and proceeds were donated to the Forever Dream Foundation.

Aidcoin to launch an ICO

CharityStars plans to use the Blockchain to have a more transparent system to provide users a more straightforward process of the raised funds they receive.

Because of this, they created AidCoin – a project backed by CharityStars –  to implement Blockchain in the nonprofit world.

To fund this project CharityStars launched a pre-ICO through the Eidoo ICO Engine, raising 8,333 ETH.

AidCoin is an ERC20 token – based on the Ethereum Blockchain –  that will become a method of giving and paying service fees throughout the nonprofit ecosystem. The online donation market is $15 bln in the US alone.

Also, on Jan. 16, AidCoin will launch its ICO with a price of 1,000 AID = 1 ETH.

Posted on

Blockchain Tech May Allow Developing World to Leapfrog Developed World: Brock Pierce

Brock Pierce is a US entrepreneur, investor and a public speaker, co-founder of Blockchain Capital, chairman of Bitcoin Foundation. He’s also a founder, board member or advisor for several Bitcoin companies.

Brock Pierce talks to Cointelegraph about the matters of Blockchain future development, Bitcoin price and gives some advice of how to deal with the ICOs.

BP: I’ve been in the digital currency space since the late 90’s with video games like World of Warcraft and Second Life. I was the primary market maker with 400,000 people in China playing video games to mine digital currency, which naturally led me to Bitcoin and Blockchain. I’ve been working full time in the space since 2012 and affiliated with a lot of projects.

Bitcoin price performance

The Bitcoin price has actually been pretty resilient in light of all of the recent developments specifically in China and South Korea, as well as the hard fork. I mean it’s very impressive how well the Bitcoin price has been able to hold up, which also means we could see a continued increase in price just due to the increased demand. If you want to follow Bitcoin price information, I recommend Spencer Bogart’s research for Blockchain Capital. I think he does the best work when it comes to Bitcoin price analysis.

CT: What is the ideal price for Bitcoin to strike a balance between growth and stability?

BP: Well, the Bitcoin price is not really connected with the technology.  The Bitcoin price is the primary barometer of sentiment, which actually has nothing to do with the fundamental performance of the technology. The technology itself has pretty consistently been improving- it’s going to continue to do so. But the prices we’ve seen over the years really is completely disconnected because it’s an emotional thing, it’s driven by sort of by market sentiment, so it is very difficult to predict that. I am not a trader, but I keep both Bitcoin and Bitcoin Cash. If you have forked coins, I recommend not selling them because it’s unclear how that development will evolve over time and there may even be a third Bitcoin.

My advice to anyone listening is until you really have a strong opinion about how those markets are going to develop the safest thing to do is hold. Or if you lose confidence – sell, whatever you want to do. The best thing is- don’t listen to anybody else’s advice. I don’t ever tell people what to do with their money or what to invest in. All I do is give people information so that they can make their own informed decision.

CT: How do you approach ICO token phenomenon?

BP: I have been around since day one. I was one of the founding board members of Mastercoin. We were the first ICO in June of 2013; it was J. R. Willett’s idea. You know sometimes I have been overly credited with inventing the ICO. I wasn’t the inventor; I was just one of the founding board members of the first ICO, which is still pretty close. But obviously, I have been in the ICO market and probably the largest investor throughout the first year, certainly one of them. Leading to what I did with B Cap or Blockchain Capital third fund where it was the first ICO of a security, which is where I think the market is going.

I think a year or two out from now security tokens will outnumber utility tokens. Because I think the benefit to market participants and contributors is greater when they can be offered actual rights, when they can actually have ownership, when they can actually have royalties, when they can have dividends, when you can have smart contracts that would allow for projects that are not performing as they should to return money or tokens to their contributors.

I think the market is a little out of control right now. I think that deals are being funded that shouldn’t be funded. I think that deals are getting more capital than they should be receiving. But that is the market. When the ducks are quacking, you feed the ducks.

So I am not blaming anyone for those market conditions but if we want this market to continue to develop without having some sort of crash we need to continue to evolve. There is this Japanese term called Kaizen, which is to continuously improve. Every time you look at a deal figure out how you can do it the best you possibly can. Improve on the work the last person has done.

My thought on the current ICO market is we should be looking to incorporate a smart contract where if a deal brings in $50 mln in contributions, which is probably more than that project needs in the immediate term, that there is some milestone. This is how venture capital historically has worked. It’s milestone based financing, but where they say ‘with this first $5 mln, we are going to accomplish – blank’ and have some sort of KPI associated with it. And if the team fails to hit that mark with that money in the time that’s been allocated those funds theoretically go back to all the original contributors. Essentially it’s in escrow. It’s these types of improvements in the market that I think may allow the market to continue to grow. If we continually improve with the market, the market will continue to perform well.

Some advice for the ICO projects

For anyone in the space whether you are focused on doing an ICO or anything else, I have a very strong principle that I communicate to everyone. I am here to help everyone I possibly can. I really only have one rule and that is: absolutely operate with complete and total integrity always. Never ever ever compromise your integrity. In this space and over time you may make a mistake. You may have projects that don’t work out but as long as you will always operate above board, as long as you always try to do the best you can do and you are always looking out for others and not just yourself the market will reward you with continued opportunity. This is a market that is filled with infinite opportunities at this point. There is going to be so much abundance here that you should never ever ever compromise your integrity. This is one big family and if you are new to this space that might not be immediately obvious, but most of us that have been around the space a long time are looking out for each other, and we are inclusive of newcomers. The only rule with me at least is never ever ever compromise your integrity.

Blockchain implementation in government services

Blockchain technology is being played within every sector. The Blockchain is going to have a larger impact on the world than the Internet has. I could argue is that all it is a secure Internet. It’s the real Internet 2.0 or call it 3.0-Web 3.0.

Governments are no different. This is a technology that’s going to be pervasive in a way that it touches every industry. Governments are recognizing that there is great benefit for them as well. As well as banks, I mean it’s worth talking even about the JP. The JP Morgan and Jamie Dimon type quotes. I see a lot of paper in the sector criticizing the incumbents and generally they are just doing their jobs.

Jamie Dimon is doing his job, his job as the incumbent is to protect the status quo. The fact that he is making statements about Bitcoin in a negative context is actually something very good. He is validating the things we are doing. And you know, Thank you, Jamie!

Governments are doing the same thing all over the world whether it’s looking at putting their national or fiat currency on the Blockchain so that they can get the benefits of things like Bitcoin. The Philippines have talked about this for a while. They could have financial inclusion, ubiquitous financial inclusion across that whole nation. Much in the way that the industrial revolution allowed the developed world to get this advantage over the developing world, I think that Blockchain technology has the potential of allowing the developing world to leapfrog the developed world.  

Because they don’t have the same incumbent infrastructure that’s going to take more time for them and the benefit is greatest.

I get approached by these days because everything in this space is too hot. For many years now by people that are going ‘Brock, Brock why should I want Bitcoin?’ Always argumentative because they read some fake news or something, some sensational headline that has led them to believe they know something on the subject, but they are like ‘Brock why should I want it?’ My answer is always ‘You shouldn’t.’  And then they are all confused like ‘What do you mean I shouldn’t?’ Well, it’s not for you. And then this really gets them upset, ‘What do you mean not for me?!’ I go, ‘Do you have a bank account? And they are like, ‘Yeah!’ I’m guessing you got a piece of plastic in your pocket too that lets you conveniently pay for things. And they’re like, ‘Yeah.” And I got, ‘You’ve got the rule of law that’s here in theory to protect you and in most cases often will. You’ve got faith in the system I guess and the two hundred currencies in the world you’ve got one that everyone wants more of. This isn’t going to change your life in the short-term unless you want to speculate and judging by the things that you’ve said so far you’re not going to be the speculator unless it’s shorting and I probably would advise you against that no matter what your beliefs are.’

South of the border

But the real benefit is South of the border, or it’s in Africa, it’s in Southeast Asia. Much like Africa leapfrog wired telecommunications and went straight to wireless. It’s these parts of the world that stand to benefit the most and where adoption is likely to happen to the greatest extent.

I mean the most advanced payment market in the world is Kenya, and the primary currency of Kenya is now no longer the government-issued one, the Kenya Shilling, it’s a prepaid cellphone minute known as M-Pesa.

CT: For how much will you sell your Bitcoin in five years?

BP: Well the concept of selling cryptocurrency is something I am often asked by people with old world mentalities.

I don’t have any intention of selling my Bitcoin or my cryptos. I got approached by some traditional wealth management type people the other day saying ‘How are you diversifying? How are you getting out of this? What are you doing? What are you doing?’ I am like doing everything as aggressively as I can. He goes well what’s the strategy? I go: I am trying to get rid of my dollars as quickly as I can for more cryptocurrencies. He was like, ‘What?’ trying to understand why that would be the approach.

The reality is that fiat money was designed to go down in value over time. Most cryptocurrencies were designed to go up in value over time.

So really the main asset classes that I find interesting today are Blockchain related things and real estate if I am looking for something more conservative, because it weathers well against currency depreciation in price, and it’s the other thing I like right now. I don’t intend to sell. If I  sell my Bitcoin, it will be for other cryptocurrencies. Thank you.

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