Bitcoin paradise

http://www.economist.com/blogs/schumpeter/2013/12/libertarian-enclaves

by peter123 • 13 years ago

74 69 13 years ago

aantthony• 13 years ago

It wasn't mentioned in the article, but Galt's Gulch Chile was founded by Jeff Berwick the tech entrepreneur who co-founded the Bitcoin ATM project, and also stockhouse.com in the 90's.

dualogy2• 13 years ago

A quirk of Chilean law makes land, mining and water rights independent of each other. Mr Johnson made sure to acquire all three, particularly the water rights. "In the future, wars will be fought over water," he says.

Sounds like he'll have to purchase some nukes next, then ;D

baddox• 13 years ago

For obvious reasons, nuclear weapons aren't the best weapons for securing water rights.

dualogy2• 13 years ago

OK, arms. As non-native speaker wasn't aware "nukes" always refers to nuclear weapons.. TIL!

XorNot• 13 years ago

Actually they are - you ensure no one could successfully start the war for water. Of course, if you need it, then it may be worth rolling the dice regardless.

dragonwriter• 13 years ago

For obvious reasons, nuclear weapons aren't the best weapons for securing water rights.

Not sure why they wouldn't be. Obviously, you don't want to use ground bursts because of the high levels of local fallout, but that's not the only way to use nukes.

exit• 13 years ago

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wish i could bitcoin my way through this paywall.

nohuck132• 13 years ago

"As for Ayn Rand, just how much have her ideas influencedthe community's design? Mr Johnson admits he never finished “Atlas Shrugged”. "I'm not actually much of a reader," he says. "Watched the movie and skimmed the Cliff's Notes, though. Good stuff."

Awesome ;)

haakon• 13 years ago

I was reminded of this quote from a recent episode of The Simpsons: "Conservatives only get more conservative, because every year they get a little further through Atlas Shrugged."

badman_ting• 13 years ago

Maybe after that they'll read about Rand's actual life.

yetanotherphd4• 13 years ago

I don't think this is a bad thing (not saying you were implying that). We probably wouldn't criticize a Black trade union activist for not being well read.

Mr Johnson deserves credit for putting his ideas into practice, which is just as important, if not more important, than theory.

javert7• 13 years ago

Mr Johnson deserves credit for putting his ideas into practice, which is just as important, if not more important, than theory.

You can't separate theory from practice. You need both and they need to be integrated.

In this particular case, we have a guy masquerading as a fan of Ayn Rand and setting up a boondoggle in Chile for greater fools to invest in. He would have done better to actually read and understand the author he attempts to parrot.

conformal• 13 years ago

ken and his staff are really cool easygoing people.

it is great to see an article about them in the economist.

damian2000• 13 years ago

Here's the text of the article for those behind a paywall...

A GROUP of self-described anarchists, libertarians and Ron Paul supporters fleeing the crumbling world economic system have founded Galt's Gulch, a community in Chile inspired by Ayn Rand's “Atlas Shrugged”—and with an economy based entirely on Bitcoin. Or that's the goal, anyway.

"Our farm workers and suppliers still want to get paid in pesos,” Ken Johnson, the project’s founder and managing partner, explains. "But Bitcoin as the John Galt coin? Why shouldn't it be?”

If the world economic system "goes sideways," as Mr Johnson puts it, residents will retreat to their self-sufficient gated community, where they will enjoy a shooting range, equestrian facilities, and spa and fitness center. The 6,874-hectare site (pictured) also includes a 100-hectare farm, although it is not clear who will pick the lettuce when the world ends.

Galt's Gulch Chile—a name impossible for local Spanish-speakers to pronounce—will also boast an innovation centre, where expatriate libertarian dentists and chiropractors may ply their trade. In exchange for Bitcoin, of course.

In the event the world economic system fails to collapse on schedule, however, Mr Johnson has a plan B—his new trademark, Galt's Gulch Organics. "The farm came with 65 hectares of lemons," he says. "The US and Japanese markets pay a premium for organic, non-GMO produce." Plans are in the works to plant herbs, spices, fruit, nuts, and vineyards, and organic certification is not far off.

A quirk of Chilean law makes land, mining and water rights independent of each other. Mr Johnson made sure to acquire all three, particularly the water rights. "In the future, wars will be fought over water," he says. Two rivers border the land, and the community sits atop 56 known water wells. Galt's Gulch bottled mineral water may soon be in the offing. Mr Johnson is also building guest haciendas to house not only prospective buyers, but also, he hopes, tourists.

Set in a secluded valley 17 kilometres from Curacavi, Chile, on the road between Santiago and the luxurious beach resort of Viña del Mar, Galt's Gulch is a mere forty-five minutes by car from the Santiago airport, but, as Mr Johnson says, "it feels like you're at the end of the Earth." Yet his goal is not isolationist, he adds. "We're not trying to hide from the world. In fact we want people to find us.”

Indeed, of the 430 lots for sale, only 12% have sold so far, and Mr Johnson is marketing vigorously to the libertarian and Bitcoin communities. Lots are priced in both dollars and Bitcoin, with big discounts for buyers who pay in that crypto-currency. Many early adopters of Bitcoin find themselves sitting on small fortunes, and Mr Johnson hopes to tempt them to diversify into real estate. So far nine clients have paid in Bitcoin, totaling around $1.5m in revenue.

Mr Johnson, a former California real estate agent and evangelist of water ionizers (devices supposed to slow aging and prevent disease, but derided as snake oil by many scientists) has become something of a celebrity in libertarian circles. Authors such as Ben Swann, Josh Tolley, Luke Rudkowski, Bob Murphy, Angela Keaton, Tatiana Moroz and Wendy McElroy have visited the site of his future utopia, and a television production company is pitching a documentary series on the community.

Most buyers so far, he says, are expats or second-home buyers. For Mr Johnson, the appeal is easy to explain. "It's like California, only forty or fifty years ago. Feels like you've stepped back in time.” Mr Johnson plans to break ground in 2014, and estimates five years to fulfill his vision of a place where he can "live and let live, thrive and let thrive.”

Why does he think his project will succeed where similar schemes have failed? "We're a freedom-minded community, but we're not trying to create a sovereign state," he explains. "We pay our taxes, we obey the law. Our goal is to lessen the effect of the rest of the world without telling the world to go take a flying leap."

As for Ayn Rand, just how much have her ideas influenced the community's design? Mr Johnson admits he never finished “Atlas Shrugged”. "I'm not actually much of a reader," he says. "Watched the movie and skimmed the Cliff's Notes, though. Good stuff."

jahaja8• 13 years ago

Anarchist community inspired by Ayn Rand? Fck me, revisionist history is seemingly having a renaissance with regards to former socialist concepts that is now apparently right-wing - libertarian and anarchist.

yetanotherphd4• 13 years ago

I don't see what bickering over words is going to accomplish. Your post is typical of the far left: do everything you can to appear smarter than your interlocutor, short of actually engaging the issue.

javert7• 13 years ago

Anarchists should have found a name for their movement that did not mean, based on the root words, "without power" or "without government," which is not what they preach.

Libertarian anarchists have been right to claim "anarchism" as their own, since that actually is what they preach.

newobj• 13 years ago

Yep, they're anarchists, working on achieving their organic certification from the government.

nawitus2• 13 years ago

"In the future, wars will be fought over water," he says. Two rivers border the land, and the community sits atop 56 known water wells.

This is a meme invented by people who've read about oil wars. The problem is that water is very cheap to produce with electricity. Desalination plants are efficient and the price of water they produce is competitive. In addition, the price of water per kg is extremely low. This means that transporting water over large distances like oil is transported is probably non-profitable. It simply means that it's cheaper (and cheap) to produce drinking water from salt water. There are not many landlocked countries.

ozziegooen• 13 years ago

Just curious; I've read that energy takes quite a bit of non-salt water to produce. Energy can be used to create clean water by desalinization, but I believe I read that this still creates less clean water than the clean water needed to produce that energy (though this can be done in a very different area. Would anyone here happen to be familiar with the basic numbers here?

nawitus2• 13 years ago

Desalination plants on average use about 15,000 kilowatt- hours of power for every million gallons of fresh water that’s produced

http://www.bloomberg.com/news/2013-05-01/energy-makes-up-hal...

NickM• 13 years ago

I'm not familiar with the exact numbers, but I would be extremely surprised if a solar panel or wind turbine took that much fresh water to manufacture and install. I suspect that the argument you're referencing is more likely geared toward fossil fuels.

3pt14159• 13 years ago

And even if there were land locked countries, natural trade will supply water. When people talk about water wars they envision people dying of thirst, when the reality is that water will go from being fifty cents a thousand litres (!) to a buck fifty a thousand litres and farmers will need to work around it.

nohuck132• 13 years ago

Indeed. The first thing that would happen if water were a lot more scarce is that lots of things would become more expensive, since water is an input to just about everything. Presumably people would change their behaviour in lots of ways short of just up and killing each other. "OMG expensive meat!" is a lot more likely than "OMG war!"

Maybe a biased source, but http://www.ecotechwater.com/Company/watertrivia.html:

How much water does it take to produce one ton of steel? 62,600 gallons

How much water must a dairy cow drink to produce one gallon of milk? 4 gallons

How much water is used during the growing/production of a chicken? 400 gallons

How much water is used during the growing/production of almonds? 12 gallons

How much water is used during the growing/production of french fries? 6 gallons

How much water is used during the growing/production of a single orange? 13.8 gallons

How much water is used during the growing/production of a watermelon? 100 gallons

How much water is used during the growing/production of a loaf of bread? 150 gallons

How much water is used during the growing/production of a tomato? 3 gallons

How much water is used during the growing/production of rice? 35 gallons

How much water us used during the production of an egg? 120 gallons

How much water does it take to process a quarter pound of hamburger? Approximately one gallon.

How much water does it take to make four new tires? 2,072 gallons.

betterunix• 13 years ago

"Our farm workers and suppliers still want to get paid in pesos,”

...and where will you get those Pesos if everyone is paying with Bitcoin? Exchanges, the real basis of the Bitcoin economy. What will happen when the world economic system collapses? Bitcoin will collapse with it.

silverbax88• 13 years ago

I think this is the flaw in most Libertarian logic that is completely missed, because most Libertarians live in first-world countries.

They have this idea that they want to pay no taxes and only pay for what THEY use, and rely on their own hard work and brilliance to succeed. But of course, that ignores the facts that first-world countries have an entire subsystem that supports this (roads, police, laws, enforcement), which makes their success possible.

In reality, Galt's Gulch is running on the backs of local workers, who have access to everything in the community. What do you think will happen if the world was to collapse? That somehow the residents of the Gulch would blissfully go on about their lives in tranquil happiness, smug in their brilliance? Or would the local population, who outnumber them by the millions, are physically and mentally stronger than they are, and who run their precious ecosystem would simply take it from them?

cschneid• 13 years ago

I like that he thinks these two things hold true at the same time:

1) Nations are having wars over water. 2) Water rights matter

fat0wl• 13 years ago

Oscar Bluth, anyone?

johnarras• 13 years ago

Why do people think that they will have access to the Internet and there will be massive amounts of excess computing power to waste if the world economy collapses? Computers and the Internet are luxuries that exist because basic physical needs are met. As soon as the Internet fails for any length of time for a given person, that person will refuse to rely on the Internet for anything until the world economy is back together, if it gets back together. In the event of collapse, it will be necessary to rely on local, physical things rather than the complex, interconnected global system we have now.

orthecreedence• 13 years ago

And without computers, bitcoins will have less worth than sticks and rocks. The community they're talking about can exist, but it's stupid to think it would operate on bitcoin. Isn't that exactly what cash is for? Untraceable, has representation of value but little value itself (besides tinder), easily broken into smaller pieces, etc. Doesn't bitcoin connect them to the very same system they're trying to escape? Cryptocurrency has purpose/value in that it can be easily exchanged with people all over the world fro goods and services. If you're separating from the world, its as valuable as the magnetic strip it's printed on.

Nursie• 13 years ago

Good luck to them. It's not often people get to go somewhere new(ish) and try out a new model of society.

I think a society based on Rand and/or libertarianism is a terrible idea, likely to be brutal and darwinistic and to degenerate into feudalism. I also think that this isn't really a model for a society based on these ideals - lets face it, the people who are going to be going there are a wealthy subset, not representative of much.

But good for them for trying.

collyw2• 13 years ago

Actually it would be nice if we could get all Ayn Rand followers to relocate to their own society. Maybe the rest of the world would be a nicer place then.

javert7• 13 years ago

It's embarassing when libertarians (mis) use terminology taken from Ayn Rand that they don't understand.

vbuterin4• 13 years ago

I don't see the problem here. Atlas Shrugged is a very complex book and has many parts that I find profound (eg. her thoughts on romance, the concept of sanction of the victim and her surprisingly sane views on the relationship between money and human values) and many parts that I find mind-bogglingly stupid (eg. her extreme rejection of anything associated with progressive ideology even when no government is involved, and especially the deduction from A is A to objectivism being true). Taking the parts of a set of ideas the you like, discarding the parts that you do not like, and using the good parts as a core from which you advance your own philosophy with legitimate ideas is not a bad thing; it's how all philosophical progress works.

javert7• 13 years ago

I think we could have a good discussion around a lot of the issues you raise here, but I want to just focus on what I think is the most worth talking about.

and especially the deduction from A is A to objectivism being true

This is a very understandable, but major, misconception. Very understandable because Atlas Shrugged is a novel, not a formal philosophy treatise, so how would you know any better? (Without spending a crap ton of time studying other Objectivist literature, that is, like I did.) Major because Objectivism is induced from reality, not deduced.

For instance, take ethics. The Objectivist ethics looks at the nature of man and then figures out what man needs to have a happy life. Well, how do we know about the nature of man? We don't deduce it from A is A; that would be impossible. Rather, we look at lots and lots of examples of men and determine what is always common vs. what differs from one to the next.

Almost everything in Rand's philosophy is very bottom-up, based on looking at tons and tons of examples out there in reality and then forming a generalization that holds in a specific, delimited context. But that isn't evident from her writing, at least not at first. And our whole intellectual culture today is very top-down. So it's easy to think the Rand is a top-down thinker and not a bottom-up thinker.

By "bottom-up" I mean starting with concretes in reality. "Top-down" is starting from intellectual abstractions, like A is A, or God, or "a society is only as morally good as its worst-off member," or the libertarian non-aggression principle, or "from each according to his ability," and so on.

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